UBS SECURITIES LLC

BrokerCheck Report

UBS SECURITIES LLC

Section Title

Report Summary

Firm History

CRD# 7654

1

10

Firm Profile 2 - 9

Page(s)

Firm Operations 11 - 33

Disclosure Events 34

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UBS SECURITIES LLC

CRD# 7654

SEC# 8-22651

Main Office Location

1285 AVENUE OF THE AMERICASNEW YORK, NY 10019Regulated by FINRA Woodbridge Office

Mailing Address

600 WASHINGTON BLVD10TH FLOORSTAMFORD, CT 06901

This firm is a brokerage firm and an investmentadviser firm. For more information aboutinvestment adviser firms, visit the SEC'sInvestment Adviser Public Disclosure website at:

Business Telephone Number

203-719-3000

https://www.adviserinfo.sec.gov

Report Summary for this Firm

This report summary provides an overview of the brokerage firm. Additional information for this firm can be foundin the detailed report.

Disclosure Events

Brokerage firms are required to disclose certaincriminal matters, regulatory actions, civil judicialproceedings and financial matters in which the firm orone of its control affiliates has been involved.

Are there events disclosed about this firm? Yes

The following types of disclosures have beenreported:

Type Count

Regulatory Event 288

Civil Event 3

Arbitration 3

Firm Profile

This firm is classified as a limited liability company.

This firm was formed in Delaware on 06/29/1998.

Its fiscal year ends in December.

Firm History

Information relating to the brokerage firm's historysuch as other business names and successions(e.g., mergers, acquisitions) can be found in thedetailed report.

Firm Operations

Is this brokerage firm currently suspended with anyregulator? No

This firm conducts 16 types of businesses.

This firm is affiliated with financial or investmentinstitutions.

This firm does not have referral or financialarrangements with other brokers or dealers.

This firm is registered with:

• the SEC• 25 Self-Regulatory Organizations• 52 U.S. states and territories

www.finra.org/brokercheck User Guidance

1©2022 FINRA. All rights reserved. Report about UBS SECURITIES LLC

https://adviserinfo.sec.gov/firm/summary/7654


http://www.finra.org/brokercheck

http://www.finra.org/brokercheck_reports


This firm is classified as a limited liability company.

This firm was formed in Delaware on 06/29/1998.

CRD#

This section provides the brokerage firm's full legal name, "Doing Business As" name, business and mailingaddresses, telephone number, and any alternate name by which the firm conducts business and where such name isused.

Firm Profile

Firm Names and Locations

Its fiscal year ends in December.

UBS SECURITIES LLC

SEC#

7654

8-22651

Main Office Location

Mailing Address

Business Telephone Number

Doing business as UBS SECURITIES LLC

203-719-3000

Regulated by FINRA Woodbridge Office

1285 AVENUE OF THE AMERICASNEW YORK, NY 10019

600 WASHINGTON BLVD10TH FLOORSTAMFORD, CT 06901

Other Names of this Firm

Name Where is it used

BRUNSWICK UBS WARBURG CA, CO, CT, DE, FL,IL, MA, MN, MO, NE,NJ, NY, OH, PA, TX,VA, WI






This section provides information relating to all direct owners and executive officers of the brokerage firm.

Direct Owners and Executive Officers

Firm Profile

Position

Percentage of Ownership

Is this a public reportingcompany?

Position Start Date

Does this owner direct themanagement or policies ofthe firm?

UBS AMERICAS INC

MEMBER, VOTING

50% but less than 75%

No

Domestic Entity

10/2003

Yes

Is this a domestic or foreignentity or an individual?

Legal Name & CRD# (if any):

Position



Position Start Date


CAPANNA, DEREK EMMETT

PRESIDENT

Less than 5%

No

Individual

02/2021

Yes

2401898



Position


Position Start Date

CONNORS, JOHN THOMAS MR.

EXECUTIVE DIRECTOR-CORPORATE LEGAL AND GOVERNANCE

Less than 5%

Individual

04/2014

2433007








Direct Owners and Executive Officers (continued)

Firm Profile




Less than 5%

No

No

Position



Position Start Date


LOFTUS, MICHAEL L

MANAGING ATTORNEY, INVESTMENT BANKING & CAPITAL MARKETS

Less than 5%

No

Individual

02/2018

No

4176467



Position



Position Start Date


MATTONE, RALPH MICHAEL

PRINCIPAL FINANCIAL OFFICER

Less than 5%

No

Individual

12/2016

Yes

1840894



MOLINARO, SAMUEL

2414084








Firm Profile

Position



Position Start Date


GROUP MANAGING DIRECTOR- CHAIRMAN OF THE BOARD

Less than 5%

No

Individual

04/2016

Yes

2414084


Position



Position Start Date


MUNFA, LAUREN K

CHIEF COMPLIANCE OFFICER

Less than 5%

No

Individual

08/2019

No

4431011



Position


Position Start Date


ROY, DYLAN JOSEPH

MANAGING DIRECTOR-TRADING TEAM LEADER

Less than 5%

Individual

09/2015

Yes

2752871









Firm Profile



No

Yes

Position



Position Start Date


UBS AMERICAS HOLDING LLC

SHAREHOLDER

Less than 5%

No

Domestic Entity

08/2015

Yes



Position



Position Start Date


VAN TASSEL, JAMES C

MANAGING DIRECTOR, US EQUITIES RESEARCH

Less than 5%

No

Individual

06/2017

Yes

2558212



VON REDDEN, LISA

Individual

1917499









Firm Profile

Position



Position Start Date


PRINCIPAL OPERATIONS OFFICER

Less than 5%

No

Individual

07/2021

Yes







This section provides information relating to any indirect owners of the brokerage firm.

Indirect Owners

Firm Profile

UBS AMERICAS HOLDING LLC

SHAREHOLDER

UBS AMERICAS INC.

75% or more

No

Domestic Entity

08/2015

Yes



Company through whichindirect ownership isestablished

Relationship to Direct Owner

Relationship Established




UBS GROUP AG

SHAREHOLDER

UBS AG

75% or more

Yes

Foreign Entity

11/2014

Yes









UBS AG

UBS AMERICAS INC.

Foreign Entity









Indirect Owners (continued)

Firm Profile

SHAREHOLDER

UBS AMERICAS INC.

25% but less than 50%

No

11/2000

Yes












Firm History

This section provides information relating to any successions (e.g., mergers, acquisitions) involving the firm.

No information reported.






Firm Operations

RegistrationsThis section provides information about the regulators (Securities and Exchange Commission (SEC), self-regulatoryorganizations (SROs), and U.S. states and territories) with which the brokerage firm is currently registered andlicensed, the date the license became effective, and certain information about the firm's SEC registration.

This firm is currently registered with the SEC, 25 SROs and 52 U.S. states and territories.

SEC Registration Questions

This firm is registered with the SEC as:

A broker-dealer:

A broker-dealer and government securities broker or dealer:

A government securities broker or dealer only:

This firm has ceased activity as a government securities broker or dealer:

Yes

Yes

No

No

Federal Regulator Status Date Effective

SEC Approved 05/15/1978

Self-Regulatory Organization Status Date Effective

FINRA Approved 08/17/1978

BOX Exchange LLC Approved 05/07/2012

Cboe BYX Exchange, Inc. Approved 10/01/2010

Cboe BZX Exchange, Inc. Approved 10/15/2008

Cboe C2 Exchange, Inc. Approved 10/08/2010

Cboe EDGA Exchange, Inc. Approved 04/12/2010

Cboe EDGX Exchange, Inc. Approved 04/12/2010

Cboe Exchange, Inc. Approved 10/01/1998

Investors' Exchange LLC Approved 08/17/2016

Long-Term Stock Exchange, Inc. Approved 08/27/2020

MEMX LLC Approved 09/17/2020

MIAX Emerald, LLC Approved 03/01/2019

MIAX PEARL, LLC Approved 02/06/2017

Miami International Securities Exchange,LLC

Approved 12/07/2012

NYSE American LLC Approved 02/25/1988






NYSE Arca, Inc. Approved 06/30/1998

NYSE Chicago, Inc. Approved 11/20/1998

NYSE National, Inc. Approved 05/18/2018

Nasdaq BX, Inc. Approved 01/29/2012

Nasdaq GEMX, LLC Approved 07/29/2013

Nasdaq ISE, LLC Approved 05/09/2000

Nasdaq MRX, LLC Approved 02/10/2016

Nasdaq PHLX LLC Approved 05/15/1978

Nasdaq Stock Market Approved 07/12/2006

New York Stock Exchange Approved 09/06/1985





Firm Operations

Registrations (continued)

U.S. States &Territories

Status Date Effective

Alabama Approved 02/28/1996

Alaska Approved 10/08/1991

Arizona Approved 11/01/1992

Arkansas Approved 03/01/1996

California Approved 02/29/1996

Colorado Approved 07/22/1991

Connecticut Approved 08/16/1991

Delaware Approved 09/05/1991

District of Columbia Approved 08/18/1991

Florida Approved 09/20/1991

Georgia Approved 07/23/1991

Hawaii Approved 03/01/1996

Idaho Approved 10/01/1991

Illinois Approved 08/08/1991

Indiana Approved 09/26/1991

Iowa Approved 08/07/1991

Kansas Approved 11/15/1991

Kentucky Approved 08/26/1991

Louisiana Approved 10/21/1991

Maine Approved 01/31/1986

Maryland Approved 08/27/1991

Massachusetts Approved 01/07/1991

Michigan Approved 07/02/1991

Minnesota Approved 07/30/1991

Mississippi Approved 12/17/1991

Missouri Approved 01/28/1992

Montana Approved 03/09/1992

Nebraska Approved 03/01/1996

Nevada Approved 11/07/1991

New Hampshire Approved 03/23/1992

New Jersey Approved 08/18/1992

New Mexico Approved 11/18/1988

New York Approved 02/26/1996

U.S. States &Territories

Status Date Effective

North Carolina Approved 08/14/1991

North Dakota Approved 07/31/1992

Ohio Approved 09/03/1985

Oklahoma Approved 03/13/1992

Oregon Approved 11/25/1991

Pennsylvania Approved 08/24/1992

Puerto Rico Approved 06/04/1992

Rhode Island Approved 09/06/1991

South Carolina Approved 08/29/1991

South Dakota Approved 08/28/1991

Tennessee Approved 08/05/1991

Texas Approved 03/22/1996

Utah Approved 10/04/1991

Vermont Approved 07/10/1992

Virginia Approved 08/08/1991

Washington Approved 09/12/1991

West Virginia Approved 08/28/1991

Wisconsin Approved 08/03/1992

Wyoming Approved 10/21/1991






Firm Operations

Types of BusinessThis section provides the types of business, including non-securities business, the brokerage firm is engaged in orexpects to be engaged in.

Other Types of Business

This firm does effect transactions in commodities, commodity futures, or commodity options.This firm does engage in other non-securities business.

Non-Securities Business Description: FOR PURPOSE OF HEDGING OTHER ACTIVITIES, REGISTRANT MAYENGAGE IN FINANCIAL FUTURES TRADING FOR ITS OWN ACCOUNT.TO COMPLY WITH SWAP REGISTRATION REQUIREMENTS ASSOCIATEDWITH DODD FRANK, UBS SECURITIES LLC WAS APPROVED AS A SWAPFIRM ON 12/28/2012

This firm currently conducts 16 types of businesses.

Types of Business

Exchange member engaged in exchange commission business other than floor activities

Broker or dealer making inter-dealer markets in corporation securities over-the-counter

Broker or dealer retailing corporate equity securities over-the-counter

Broker or dealer selling corporate debt securities

Underwriter or selling group participant (corporate securities other than mutual funds)

U S. government securities dealer

U S. government securities broker

Municipal securities dealer

Municipal securities broker

Solicitor of time deposits in a financial institution

Put and call broker or dealer or option writer

Broker or dealer selling securities of non-profit organizations (e.g., churches, hospitals)

Trading securities for own account

Private placements of securities

Broker or dealer selling interests in mortgages or other receivables

Other - APPLICANT WILL ALSO ENGAGE IN THE FOLLOWING ACTIVITIES: (1) PROVIDING ADVICE, INCLUDINGRENDERING FAIRNESS OPINIONS AND PROVIDING VALUATION SERVICES, IN CONNECTION WITHMERGERS, ACQUISITIONS, DIVESTITURES, JOINT VENTURES, LEVERAGED BUYOUTS, RECAPITA






Firm Operations

Clearing Arrangements

This firm does hold or maintain funds or securities or provide clearing services for other broker-dealer(s).

Introducing Arrangements

This firm does not refer or introduce customers to other brokers and dealers.






Firm Operations

Industry Arrangements

This firm does have books or records maintained by a third party.

This firm does not have accounts, funds, or securities maintained by a third party.

This firm does not have customer accounts, funds, or securities maintained by a third party.

This firm does not have individuals who control its management or policies through agreement.

This firm does not have individuals who wholly or partly finance the firm's business.

Control Persons/Financing

Name: BROADRIDGE FINANCIAL SOLUTIONS INC.

Business Address: 1981 MARCUS AVENUELAKE SUCCESS, NY 11042

Effective Date: 08/17/1978

Description: UBS SECURITIES LLC (THE "FIRM") HAS A MASTER SERVICESAGREEMENT WITH BROADRIDGE FINANCIAL SOLUTIONS, INC. (BFS),HEADQUARTERED IN LAKE SUCCESS, NEW YORK. THE FIRM ISCURRENTLY USING BFS'S INVESTOR COMMUNICATION SOLUTION ANDSECURITIES PROCESSING SOLUTION. THE FOLLOWING LIST IS NOTALL INCLUSIVE, BUT SHOWS SOME OF THE SERVICES WE USE: TRADECAPTURE / PROCESSING; INTERFACES (NSCC, OCC, DTC, ETC);CONFIRMATIONS; STATEMENTS; ASSET SERVICING; CASHIERING;MARGIN; CASH MANAGEMENT; PROXY MATERIALS, ETC.






Firm Operations

Organization AffiliatesThis section provides information on control relationships the firm has with other firms in the securities, investmentadvisory, or banking business.

This firm is, directly or indirectly:

· in control of· controlled by· or under common control withthe following partnerships, corporations, or other organizations engaged in the securities or investmentadvisory business.

Yes

No

No

04/16/2021

1285 AVENEUE OF THE AMERICAS10TH FLOORNEW YORK, NY 10019

313696

UBS ASSET MANAGERS OF PUERTO RICO is under common control with the firm.

UBS AG INDIRECTLY CONTROLS UBS ASSET MANAGERS OF PUERTO RICO.Description:

Investment AdvisoryActivities:

Securities Activities:

Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

Yes

No

No

07/10/1998

1285 AVENUE OF THE AMERICAS20TH FLOORNEW YORK, NY 10019

109213

UBS FUND ADVISOR, L.L.C. is under common control with the firm.

UBS AG OWNS 100% OF UBS AMERICAS INC WHICH OWNS UBS FUDAVISOR LLC 100%

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:






Firm Operations

Organization Affiliates (continued)UBS AG OWNS 100% OF UBS AMERICAS INC WHICH OWNS UBS FUDAVISOR LLC 100%

Description:

Yes

No

No

04/09/2004

600 WASHINGTON BLVDSTAMFORD, CT 06901

131034

UBS HEDGE FUND SOLUTIONS is under common control with the firm.

UBS ASSET MANAGEMENT (AMERICAS) INC OWNS UBS HEDGE FUNDSOLUTIONS LLC 100%. UBS AMERICAS INC OWNS UBS ASSETMANAGEMENT (AMERICAS) INC100%.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

Yes

No

No

11/03/2000

10 STATE HOUSE SQUAREHARTFORD, CT 06103-3604

107758

UBS REALTY INVESTORS LLC is under common control with the firm.

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS REALTY INVESTORS LLCDescription:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

Yes

05/28/2013

ONE RAFFLES QUAY#50-01 NORTH TOWERSINGAPORE, SINGAPORE 048583

UBS FUTURES SINGAPORE LTD. is under common control with the firm.

Foreign Entity:

Effective Date:

Business Address:






Firm Operations

Organization Affiliates (continued)

No

Yes

SINGAPORE

Yes

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS FUTURES SINGAPORE LTD.Description:



Country:

Foreign Entity:

Yes

No

No

11/03/2000

1285 AVENUE OF THE AMERICAS12TH FLOORNEW YORK, NY 10019

106838

UBS ASSET MANAGEMENT (AMERICAS) INC. is under common control with the firm.

UBS ASSET MANAGEMENT (AMERICAS) INC FORMERLY BRINSONPARTNERS IS A FEDERALLY COVERED INVESTMENT ADVISOR AND UNDERCOMMON CONTROL WITH THE APPLICANT.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

No

Yes

No

11/03/2016

315 DEADERICK STREETNASHVILLE, TN 37211-4155

UBS BUSINESS SOLUTIONS US LLC is under common control with the firm.

UBS AG OWNS 100% OF UBS AMERICAS HOLDING LLC WHICH OWNS 100%OF UBS BUSINESS SOLUTIONS US LLC.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:






Firm Operations


Yes

Yes

MALAYSIA

Yes

09/19/2005

LEVEL 7, WISMA HONG LEONG18 JALAN PERAKKUALA LUMPUR, MALAYSIA 50450

UBS SECURITIES MALAYSIA SDN BHD is under common control with the firm.

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS SECURITIES MALAYSIA SDNBHD (ID#916)

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

Yes

Yes

CANADA

Yes

12/23/2004

154 UNIVERSITY AVENUESUITE 800TORONTO, CANADA M5H 3Z4

UBS INVESTMENT MANAGEMENT CANADA INC. is under common control with the firm.

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS INVESTMENT MANAGEMENTCANADA INC.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

No

No

03/16/2016

242 TRUMBULL STREETHARTFORD, CT

107754

UBS FARMLAND INVESTORS LLC is under common control with the firm.


Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:






Firm Operations


Yes

No

UBS REALTY INVESTORS LLC DIRECTLY OR INDIRECTLY OWNS 90% OFUBS FARMLAND INVESTORS LLC AND UBS AMERICAS INC OWNS 10%. UBSAMERICAS IS WHOLLY OWNED BY UBS AG.

Description:



No

Yes

MEXICO

Yes

08/10/2009

CAMPOS ELISEOS 345-19EDIFICIO OMEGACOL. POLANCO, MEXICO 11560 D.F.

UBS BANK MEXICO S.A.INSTITUCION DE BANCA MULTIPLE, UBS GRUPO FINANCIERO is under commoncontrol with the firm.

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS BANK MEXICO S.A.INSTITUCION DE BANCA MULTIPLE, UBS GRUPO FINANCIERO

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

No

Yes

MEXICO

Yes

08/10/2009

CAMPOS ELISEOS 345-19EDIFICIO OMEGACOL. POLANCO, MEXICO 11560 D.F.

UBS CASA DE BOLSA S.A. DE C.V.,UBS GRUPO FINANCIERO is under common control with the firm.

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS CASA DE BOLSA S.A. DEC.V., UBS GRUPO FINANCIERO

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

VIA SANTA MARGHERITA 16MILANO, ITALY

UBS ITALIA SIM SPA is under common control with the firm.

Business Address: 21©2022 FINRA. All rights reserved. Report about UBS SECURITIES LLC





Firm Operations


No

Yes

ITALY

Yes

11/01/2007

VIA SANTA MARGHERITA 16MILANO, ITALY

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS ITALIA SIM SPA FORMERLYUBS CORPORATE FINANCE ITALIA SPA (ID#1171)

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

No

Yes

LUXEMBOURG

Yes

12/01/2016

36-38 GRANDE-RUELUXEMBOURG, LUXEMBOURG

UBS EUROPE SE is under common control with the firm.

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS EUROPE SE(ID# 2010)Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

No

Yes

CANADA

Yes

04/01/1989

161 BAY STREETSUITE 4100TORONTO ONT, CANADA M5H 2S1

UBS SECURITIES CANADA INC is under common control with the firm.

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS BUNTING WARBURG INC. (ID# 529)

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:






Firm Operations

Organization Affiliates (continued)UBS AG DIRECTLY OR INDIRECTLY OWNS UBS BUNTING WARBURG INC. (ID# 529)

Description:

Yes

Yes

BAHAMAS

Yes

07/01/1998

P. O. BOX N-7757UBS HOUSE EAST BAY STREETNASSAU, BAHAMAS

UBS (BAHAMAS) LTD. is under common control with the firm.

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS (BAHAMAS) LTD.(ID # 430)

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

Yes

Yes

SPAIN

Yes

02/04/1992

FORTUNY 18 SECOND FLOORMADRID, SPAIN 28010

UBS SECURITIES ESPAÑA SOCIEDAD DE VALORES SA is under common control with the firm.

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS SECURITIES ESPAÑASOCIEDAD DE VALORES SA

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

Yes

NEW ZEALAND

Yes

06/29/1998

LEVEL 23 STOCK EXCHANGE HOUSE119 QUEEN STREETAUKLAND, NEW ZEALAND

UBS NEW ZEALAND LIMITED is under common control with the firm.


Country:

Foreign Entity:

Effective Date:

Business Address:






Firm Operations


Yes

Yes

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS NEW ZEALAND EQUITIESLTD. (ID # 934)

Description:



No

Yes

HONG KONG

Yes

10/31/1986

25TH FLOOR ONE EXCHANGE SQUARECONNAUGHT PLACE CENTRALHONG KONG, CHINA

UBS SECURITIES HONG KONG LIMITED is under common control with the firm.

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS WARBURG HONG KONGLIMITED (ID # 926)

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

No

Yes

TAIWAN

Yes

01/07/1995

15F, #167, TUN HWA NORTH ROADTAIPEI, TAIWAN, ROC 105

UBS ASSET MANAGEMENT (TAIWAN) LTD. is under common control with the firm.

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS ASSET MANAGEMENT(TAIWAN) LTD.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

LEVEL 25 GOVERNOR PHILLIP TOWER1 FARRER PLACESYDNEY, NSW, AUSTRALIA 2000

UBS SECURITIES AUSTRALIA LTD is under common control with the firm.

Business Address:






Firm Operations


Yes

Yes

AUSTRALIA

Yes

06/29/1998

LEVEL 25 GOVERNOR PHILLIP TOWER1 FARRER PLACESYDNEY, NSW, AUSTRALIA 2000

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS WARBURG AUSTRALIAEQUITIES LTD (ID # 958)

Description:



Country:

Foreign Entity:

Effective Date:

No

Yes

ARGENTINA

Yes

06/24/1997

25 DE MAYO NO555, 15TH FLOORBUENOS AIRES, ARGENTINA C1002ABK

UBS TRADING S.A. is under common control with the firm.

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS WARBURG TRADING S.A.(ID # 1871)

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

No

Yes

THAILAND

Yes

11/12/1998

93/1 DIETHELM TOWER A, 2ND FLOORWIRELESS ROAD, PATHUMWANBANGKOK, THAILAND 10330

UBS SECURITIES (THAILAND) LTD is under common control with the firm.

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS WARBURG SECURITIES CO.,LTD (ID# 940)

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:






Firm Operations


Yes

Yes

ISRAEL

Yes

08/03/1997

21 SDEROT SHAUL HAMELECHTEL AVIV, ISRAEL 64367

UBS SECURITIES ISRAEL LIMITED is under common control with the firm.

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS WARBURG (ISRAEL) LTD.(ID# 2149)

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

No

Yes

PHILIPPINES

Yes

10/02/1996

19/F TOWER ONE AYALA TRIANGLEAYALA AVENUEMAKATI, PHILIPPINES 1254

UBS SECURITIES PHILIPPINES INC is under common control with the firm.

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS WARBURG SECURITIESPHILIPPINES, INC. (ID# 939)

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

Yes

Yes

FRANCE

Yes

04/14/1988

65, RUE DE COURCELLESPARIS, FRANCE 75008

UBS SECURITIES FRANCE SA is under common control with the firm.



Country:

Foreign Entity:

Effective Date:

Business Address:






Firm Operations

Organization Affiliates (continued)Yes

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS WARBURG (FRANCE) SA (ID# 915)

Description:


No

Yes

No

01/17/1999

10 STATE HOUSE SQUARE15TH FLOORHARTFORD, CT 06103-3604

41848

UBS FUND SERVICES (USA) LLC is under common control with the firm.

UBS AMERICAS HOLDING LLC OWNS 100% OF UBS AMERICAS INC. THAT INTURN OWNS 100% OF ARI ACQUISITION CORP. AND 26.125% OF UBSREALTY INVESTORS LLC. ARI ACQUISITION CORP. OWNS 73.875% OF UBSREALTY INVESTORS LLC. IN TURN, UBS REALTY INVESTORS LLC OWNS99% OF THE APPLICANT AND ARI ACQUISITION CORP. OWNS 1% OF THEAPPLICANT.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

No

Yes

RUSSIA

Yes

11/24/1997

52/4 KOSMODAMIANSKAYA NABAREZHNAYAMOSCOW, RUSSIA 113054

CJSC UBS SECURITIES is under common control with the firm.

UBS AG DIRECTLY OR INDIRECTLY OWNS CJSC UBS SECURITIESDescription:



Country:

Foreign Entity:

Effective Date:

Business Address:

64 WIERDA VALLEYSANDTON, SOUTH AFRICA

UBS SOUTH AFRICA (PROPRIETARY) LIMITED is under common control with the firm.

Business Address:






Firm Operations


No

Yes

SOUTH AFRICA

Yes

08/11/1995

64 WIERDA VALLEYSANDTON, SOUTH AFRICA

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS SOUTH AFRICA(PROPRIETARY) LIMITED

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

Yes

No

CANADA

Yes

07/04/1951

154 UNIVERSITY AVENUETORONTO, ONTARIO, CANADA M5H 3Z4

UBS BANK (CANADA) is under common control with the firm.

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS BANK (CANADA)(ID#429)Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

Yes

Yes

HONG KONG

Yes

12/23/1982

1 25TH FLOOR ONE EXCHANGE SQUARE28 CONNAUGHT PLACE CENTRALHONG KONG, CHINA

UBS SECURITIES ASIA LIMITED is under common control with the firm.

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS WARBURG ASIA LIMITED(ID# 919)

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:






Firm Operations


Yes

Yes

INDIA

Yes

02/15/1996

2/F, HOECHST HOUSENARIMAN POINTMUMBAI, INDIA

UBS SECURITIES INDIA PRIVATE LIMITED is under common control with the firm.

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS WARBURG SECURITIESINDIA PRIVATE LIMITED (ID# 2263)

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

No

Yes

SINGAPORE

Yes

06/28/1998

5 TEMASEK BOULEVARD#18-00 SUNTEC TOWER FIVESINGAPORE, SINGAPORE 038985

UBS CUSTODY SERVICES SINGAPORE PTE. LTD. is under common control with the firm.

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS CUSTODY SERVICESSINGAPORE PTE. LTD.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

Yes

INDONESIA

Yes

06/03/1996

SUITE 1606, WISMA GKBIJI. JEND. SUIDRMAN NO. 28JAKARTA, INDONESIA 10210

PT UBS SECURITIES INDONESIA is under common control with the firm.


Country:

Foreign Entity:

Effective Date:

Business Address:






Firm Operations


No

Yes

UBS AG DIRECTLY OR INDIRECTLY OWNS PT UBS WARBUR INDONESIA(ID # 840)

Description:



Yes

Yes

PRINCIPAUTE DE MONACO

Yes

04/15/1975

2 AVENUE DE GRANDE-BRETAGNEMONTE CARLO, PRINCIPAUTE DE MONACO

UBS (MONACO) S.A is under common control with the firm.

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS (MONACO) S.A (ID#438)Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

Yes

Yes

NEW ZEALAND

Yes

06/29/1998

LEVEL 23 STOCK EXCHANGE HOUSE119 QUEEN STREETAUKLAND, NEW ZEALAND

UBS SECURITIES NEW ZEALAND LIMITED is under common control with the firm.

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS WARBURG NEW ZEALANDLIMITED (ID # 932)

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

06/28/1998


UBS O'CONNOR LLC is under common control with the firm.

Effective Date:

Business Address:






Firm Operations


Yes

No

No

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS O'CONNOR.(ID #3738)Description:



Country:

Foreign Entity:

Yes

Yes

No

04/08/2002


583

UBS ASSET MANAGEMENT (US) INC. is under common control with the firm.

UBS AMERICAS HOLDING LLC OWNS 100% OF UBS AMERICAS INC. THAT INTURN OWNS 100% OF APPLICANT.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

No

Yes

UNITED KINGDOM

Yes

02/14/2003

1 FINSBURY AVENUELONDON, UNITED KINGDOM EC2M 2PA

UBS LIMITED is under common control with the firm.

UBS AMERICAS INC.,DIRECTLY OR INDIRECTLY OWNS 100% OF THE STOCKOF UBS LIMITED FORMERLY KNOWN AS UBS INTERNATIONAL (UK) LTD,FORMERLY KNOWN AS UBS WARBURG LTD.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:






Firm Operations


No

Yes

No

11/03/2000


UBS AMERICAS INC. is under common control with the firm.

UBS AG DIRECTLY OR INDIRECTLY OWNS UBS AMERICAS, INC.(ID # 4181)

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

Yes

Yes

No

11/03/2000


8174

UBS FINANCIAL SERVICES INC. is under common control with the firm.

UBS AMERICAS HOLDING LLC OWNS 100% OF UBS AMERICAS INC. THAT INTURN OWNS 100% OF APPLICANT.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

This firm is directly or indirectly, controlled by the following:

· bank holding company· national bank· state member bank of the Federal Reserve System· state non-member bank· savings bank or association· credit union· or foreign bank






Firm Operations


Effective Date:

Business Address:

Description: APPLICANT IS 68% OWNED BY UBS AMERICAS INC., A DELAWARECORPORATION. UBS AMERICAS INC. IS WHOLLY OWNED BY UBS AG, ASWISS BANK. APPLICANT IS 32% OWNED DIRECTLY BY UBS AG. UBS AG ISNOW MAJORITY OWNED BY UBS GROUP AG, A SWISS CORPORATION.

UBS GROUP AG is a Bank Holding Company and controls the firm.

11/28/2014

BAHNHOFSTRASSE 45ZURICH, SWITZERLAND CH-8001

Effective Date:

Business Address:

Description: APPLICANT IS 100% OWNED BY UBS AMERICAS INC., A DELAWARECORPORATION. UBS AMERICAS INC. IS OWNED BY UBS AG, A SWISS BANK.

UBS AG is a Foreign Bank and controls the firm.

06/29/1998

BAHNHOFSTRASSE 45ZURICH, SWITZERLAND 8021






Disclosure Events

All firms registered to sell securities or provide investment advice are required to disclose regulatory actions, criminal orcivil judicial proceedings, and certain financial matters in which the firm or one of its control affiliates has been involved.For your convenience, below is a matrix of the number and status of disclosure events involving this brokerage firm orone of its control affiliates. Further information regarding these events can be found in the subsequent pages of thisreport.

Final On AppealPending

Regulatory Event 0 288 0

Civil Event 0 3 0

Arbitration N/A 3 N/A






Disclosure Event Details

What you should know about reported disclosure events:

1. BrokerCheck provides details for any disclosure event that was reported in CRD. It also includessummary information regarding FINRA arbitration awards in cases where the brokerage firm wasnamed as a respondent.

2. Certain thresholds must be met before an event is reported to CRD, for example: o A law enforcement agency must file formal charges before a brokerage firm is required to disclose a

particular criminal event.3. Disclosure events in BrokerCheck reports come from different sources:

o Disclosure events for this brokerage firm were reported by the firm and/or regulators. When the firmand a regulator report information for the same event, both versions of the event will appear in theBrokerCheck report. The different versions will be separated by a solid line with the reporting sourcelabeled.

4. There are different statuses and dispositions for disclosure events: o A disclosure event may have a status of pending, on appeal, or final.

§ A "pending" event involves allegations that have not been proven or formally adjudicated.§ An event that is "on appeal" involves allegations that have been adjudicated but are currently

being appealed.§ A "final" event has been concluded and its resolution is not subject to change.

o A final event generally has a disposition of adjudicated, settled or otherwise resolved.§ An "adjudicated" matter includes a disposition by (1) a court of law in a criminal or civil matter,

or (2) an administrative panel in an action brought by a regulator that is contested by the partycharged with some alleged wrongdoing.

§ A "settled" matter generally involves an agreement by the parties to resolve the matter.Please note that firms may choose to settle customer disputes or regulatory matters forbusiness or other reasons.

§ A "resolved" matter usually involves no payment to the customer and no finding ofwrongdoing on the part of the individual broker. Such matters generally involve customerdisputes.

5. You may wish to contact the brokerage firm to obtain further information regarding any of thedisclosure events contained in this BrokerCheck report.

Regulatory - Final

This type of disclosure event involves (1) a final, formal proceeding initiated by a regulatory authority (e.g., a statesecurities agency, self-regulatory organization, federal regulator such as the U.S. Securities and Exchange Commission,foreign financial regulatory body) for a violation of investment-related rules or regulations; or (2) a revocation orsuspension of the authority of a brokerage firm or its control affiliate to act as an attorney, accountant or federalcontractor.

Disclosure 1 of 288

Reporting Source: Regulator

Allegations: UBS SECURITIES LLC VIOLATED SEA RULE 15C3-5 AND BZX RULE 3.2 INTHAT THE FIRM'S FINANCIAL RISK MANAGEMENT CONTROLS WERE NOTREASONABLY DESIGNED TO PREVENT THE ENTRY OF ERRONEOUSORDERS ON BZX, REJECTING ORDERS THAT EXCEED APPROPRIATEPRICE OR SIZE PARAMETERS, ON AN ORDER-BY-ORDER BASIS OR OVER ASHORT PERIOD OF TIME.

Current Status: Final






Initiated By: CBOE BZX EXCHANGE, INC.

Principal Sanction(s)/ReliefSought:

Civil and Administrative Penalt(ies) /Fine(s)

Other Sanction(s)/ReliefSought:

Date Initiated: 11/05/2021

Docket/Case Number: FILE NO. USRI-7757-05

Principal Product Type: Equity Listed (Common & Preferred Stock)

Other Product Type(s):

Allegations: UBS SECURITIES LLC VIOLATED SEA RULE 15C3-5 AND BZX RULE 3.2 INTHAT THE FIRM'S FINANCIAL RISK MANAGEMENT CONTROLS WERE NOTREASONABLY DESIGNED TO PREVENT THE ENTRY OF ERRONEOUSORDERS ON BZX, REJECTING ORDERS THAT EXCEED APPROPRIATEPRICE OR SIZE PARAMETERS, ON AN ORDER-BY-ORDER BASIS OR OVER ASHORT PERIOD OF TIME.

Resolution Date: 11/08/2021

Resolution:

Other Sanctions Ordered:

Sanction Details: A CENSURE AND A MONETARY FINE OF $24,000.

Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?

No

Sanctions Ordered: CensureMonetary/Fine $24,000.00

Consent

iReporting Source: Firm

Allegations: UBS SECURITIES LLC VIOLATED SEC RULE 15C3-5 AND BZX RULE 3.2 INTHAT THE FIRM'S FINANCIAL RISKMANAGEMENT CONTROLS WERE NOTREASONABLY DESIGNED TO PREVENT THE ENTRY OFERRONEOUSORDERS ON BZX, REJECTING ORDERS THAT EXCEEDAPPROPRIATE PRICE OR SIZE PARAMETERS, ON AN ORDER-BY-ORDERBASIS OR OVER A SHORT PERIOD OF TIME.












Docket/Case Number: MATTER NO. USRI-7757-05UBS SECURITIES LLC




Resolution:


Sanction Details: A CENSURE AND A MONETARY FINE OF $24,000.


Consent

Disclosure 2 of 288

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Initiated By: CBOE BYX EXCHANGE, INC.








Allegations: UBS SECURITIES LLC VIOLATED SEA RULE 15C3-5 AND BYX RULE 3.2 INTHAT THE FIRM'S FINANCIAL RISK MANAGEMENT CONTROLS WERE NOTREASONABLY DESIGNED TO PREVENT THE ENTRY OF ERRONEOUSORDERS, BY REJECTING ORDERS THAT EXCEED APPROPRIATE SIZEPARAMETERS, ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIODOF TIME.









Resolution:


Sanction Details: A CENSURE AND A MONETARY FINE IN THE AMOUNT OF $24,000.


No


Consent


Initiated By: CBOE BYX EXCHANGE, INC.





Docket/Case Number: UBS SECURITIES LLC; FILE NO.USRI-7757-06



Allegations: UBS SECURITIES LLC VIOLATED SEA RULE 15C3-5 AND BYX RULE 3.2 INTHAT THE FIRM'S FINANCIAL RISKMANAGEMENT CONTROLS WERE NOTREASONABLY DESIGNED TO PREVENT THE ENTRY OF ERRONEOUSORDERS, BY REJECTING ORDERS THAT EXCEED APPROPRIATE SIZEPARAMETERS, ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIODOF TIME.



Resolution:


Consent







Sanction Details: THE MATTER WAS RESOLVED BY SETTLEMENT ON NOVEMBER 8, 2021PURSUANT TO WHICH UBS AGREED TO THE IMPOSITION OF A CENSUREAND A $24,000 FINE.

Firm Statement THE MATTER WAS RESOLVED BY SETTLEMENT ON NOVEMBER 8, 2021PURSUANT TO WHICH UBS AGREED TO THE IMPOSITION OF A CENSUREAND A $24,000 FINE.


Disclosure 3 of 288

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Initiated By: CBOE EDGX EXCHANGE, INC.








Allegations: UBS SECURITIES LLC VIOLATED SEA RULE 15C3-5 AND EDGX RULE 3.2 INTHAT THE FIRM'S FINANCIAL RISK MANAGEMENT CONTROLS WERE NOTREASONABLY DESIGNED TO PREVENT THE ENTRY OF ERRONEOUSORDERS ON EDGX, BY REJECTING ORDERS THAT EXCEED APPROPRIATEPRICE OR SIZE PARAMETERS, ON AN ORDER-BY-ORDER BASIS OR OVER ASHORT PERIOD OF TIME.



Resolution:


No

Consent







Sanction Details: A CENSURE AND A MONETARY FINE IN THE AMOUNT OF $72,000.











Allegations: UBS SECURITIES LLC VIOLATED SEC RULE 15C3-5 AND EDGX RULE 3.2 INTHAT THE FIRM'S FINANCIAL RISKMANAGEMENT CONTROLS WERE NOTREASONABLY DESIGNED TO PREVENT THE ENTRY OFERRONEOUSORDERS ON EDGX, BY REJECTING ORDERS THAT EXCEEDAPPROPRIATE PRICE OR SIZE PARAMETERS, ON ANORDER-BY-ORDERBASIS OR OVER A SHORT PERIOD OF TIME.



Resolution:


Sanction Details: A CENSURE AND A MONETARY FINE IN THE AMOUNT OF $72000.00


Consent

Disclosure 4 of 288

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Reporting Source: Firm

Allegations: WITHOUT ADMITTING OR DENYING ANY VIOLATION OF EXCHANGE RULES,UBS SECURITIES LLC CONSENTED TO A FINDING BY THE CHICAGOMERCANTILE EXCHANGE THAT THE SETTLEMENT OF A CLIENT'S PENDINGFX MARGIN TRANSACTIONS OUTSIDE OF EXPECTED TIMEFRAMESVIOLATED CBOT RULES 930.E.1., 930.E.2. AND 930.F. AND THE FIRM'SFAILURE TO MAINTAIN ACCURATE WRITTEN RECORDS FOR CERTAINPERFORMANCE BOND CALLS VIOLATED CBOT RULE 930.E.3.







Initiated By: CHICAGO MERCANTILE EXCHANGE





Docket/Case Number: 21-CH-2109

Principal Product Type: Futures - Commodity


Allegations: WITHOUT ADMITTING OR DENYING ANY VIOLATION OF EXCHANGE RULES,UBS SECURITIES LLC CONSENTED TO A FINDING BY THE CHICAGOMERCANTILE EXCHANGE THAT THE SETTLEMENT OF A CLIENT'S PENDINGFX MARGIN TRANSACTIONS OUTSIDE OF EXPECTED TIMEFRAMESVIOLATED CBOT RULES 930.E.1., 930.E.2. AND 930.F. AND THE FIRM'SFAILURE TO MAINTAIN ACCURATE WRITTEN RECORDS FOR CERTAINPERFORMANCE BOND CALLS VIOLATED CBOT RULE 930.E.3.


Resolution:


Sanction Details: THE MATTER WAS RESOLVED WITH A SETTLEMENT OFFER THAT WASAPPROVED BY THE CME ON 8/20/2021, IN WHICH UBS SECURITIES LLCAGREED TO PAY A PENALTY OF $75,000.

Firm Statement THE MATTER WAS RESOLVED WITH A SETTLEMENT OFFER THAT WASAPPROVED BY THE CME ON 8/20/2021, IN WHICH UBS SECURITIES LLCAGREED TO PAY A PENALTY OF $75,000.

Sanctions Ordered: Monetary/Fine $75,000.00

Consent

Disclosure 5 of 288

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Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO A SUMMARY FINE FOR FAILURE TO COMPLY WITH THE EUROPEANUNION'S MARKETS IN FINANCIAL INSTRUMENTS REGULATIONTRANSACTION REPORTING REQUIREMENTS. THE FINDINGS STATED THATTHE FIRM DID NOT UPDATE ITS ATTESTATION STATUS IN THE ICE FUTURESEUROPE ATTESTATION PORTAL WHEN THE EXCHANGE'S CIRCULAR 20/055WAS ISSUED IN APRIL 2020 AND WAITED UNTIL THE ISSUANCE OF AFORMAL INVESTIGATION BY ICE FUTURES EUROPE TO COMPLETE THEATTESTATION.







Initiated By: ICE FUTURES EUROPE





Docket/Case Number: SNC0018135



WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO A SUMMARY FINE FOR FAILURE TO COMPLY WITH THE EUROPEANUNION'S MARKETS IN FINANCIAL INSTRUMENTS REGULATIONTRANSACTION REPORTING REQUIREMENTS. THE FINDINGS STATED THATTHE FIRM DID NOT UPDATE ITS ATTESTATION STATUS IN THE ICE FUTURESEUROPE ATTESTATION PORTAL WHEN THE EXCHANGE'S CIRCULAR 20/055WAS ISSUED IN APRIL 2020 AND WAITED UNTIL THE ISSUANCE OF AFORMAL INVESTIGATION BY ICE FUTURES EUROPE TO COMPLETE THEATTESTATION.


Resolution:


Sanction Details: THE FIRM WAS FINED $6940.47, WHICH WAS PAID ON JULY 12, 2021.


Settled

Disclosure 6 of 288

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Initiated By: NYSE AMERICAN LLC



Docket/Case Number: 2021070724901

Principal Product Type: No Product


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOESTABLISH A SYSTEM OF COMPLIANCE AND SUPERVISORY CONTROLSREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TONYSE AMERICAN RULE 935NY.










Resolution:


Sanction Details: THE FIRM WAS FINED $3,500.

Regulator Statement THE MATTER WAS RESOLVED AS A MINOR RULE VIOLATION.


No


Other







Docket/Case Number: NO. 2021070724901

Principal Product Type: Options


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE MINOR RULE VIOLATION AND FINE AND THE ENTRY OF FINDINGSTHAT PRIOR TO DECEMBER 28, 2020, RESPONDENT FAILED TO ESTABLISHA SYSTEM OF COMPLIANCE AND SUPERVISORY CONTROLS REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TO NYSEAMERICAN RULE 935NY.


Resolution: Other








Sanction Details: THE FIRM WAS FINED $3,500.

Firm Statement THE FIRM WAS FINED $3,500.


Disclosure 7 of 288

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Initiated By: CBOE FUTURES EXCHANGE, LLC





Docket/Case Number: CFE 20-0002 USFI 725/516



Allegations: WITHOUT ADMITTING OR DENYING ANY VIOLATION, UBS SECURITIES LLCCONSENTED TO A FINDING BY THE CBOE FUTURES EXCHANGE THAT THEFIRM DID NOT MAINTAIN AND COULD NOT PROVIDE TO CFE AUDIT TRAILDATA FOR JANUARY 23, 2018, ONE OF TEN DAYS REQUESTED, AND THAT,DATA FOR TWO OF THE DAYS REVIEWED, MARCH 1, 2018 AND MARCH 14,2018, DID NOT INCLUDE ALL REQUIRED ELEMENTS, IN VIOLATION OF CFERULES 403(C) AND 502.



Resolution:


Sanction Details: THE MATTER WAS RESOLVED WITH LETTER OF CONSENT THAT WASAPPROVED BY THE CFE ON 11/4/2020, IN WHICH UBS SECURITIES LLCAGREED TO PAY A PENALTY OF $37,500.


Consent

i44©2022 FINRA. All rights reserved. Report about UBS SECURITIES LLC





Disclosure 8 of 288


Initiated By: MIAMI INTERNATIONAL SECURITIES EXCHANGE, LLC







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITSSUPERVISORY SYSTEM, INCLUDING ITS WSPS, APPLICABLE TO ITSHANDLING OF MANUAL OPTIONS ORDERS WERE NOT REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH, AND TO DETECT ANDPREVENT VIOLATIONS OF, THE APPLICABLE SECURITIES LAWS,REGULATIONS, AND RECORDKEEPING REQUIREMENTS OF MIAX. THEFINDINGS STATED THAT IN PARTICULAR, WHILE THE WSPS STATE THAT AREVIEW OF OPTIONS ORDERS IS TO BE CONDUCTED, THEY DO NOT SETFORTH THE PROCEDURE BY WHICH THE REVIEW IS TO OCCUR.SIMILARLY, WHILE THE WSPS STATE THAT THE REVIEW SHOULD VERIFYTHAT REQUIRED INFORMATION IS RECORDED, INCLUDING ACCURATETIMESTAMPS, THEY DO NOT SET FORTH HOW THIS VERIFICATION SHOULDOCCUR, OR HOW THE REVIEWER WOULD CONFIRM THAT THEINFORMATION IN A RECORD IS ACCURATE. FURTHER, THE WSPS DO NOTSPECIFY THE NUMBER OF OPTIONS ORDERS THAT ARE SUBJECT TOSUPERVISORY REVIEW, AND THE FREQUENCY WITH WHICH THE FIRMCONDUCTS ITS REVIEW (I.E. ONCE A MONTH), IS UNREASONABLE IN LIGHTOF THE FIRM'S MANUAL OPTIONS ORDER FLOW.



Resolution:


No

Consent






Other Sanctions Ordered: UNDERTAKING

Sanction Details: THE FIRM WAS CENSURED, FINED $2,857, AND SHALL UNDERTAKE TOADDRESS THE DEFICIENCIES DISCUSSED IN THIS LETTER OF CONSENT.


No



Initiated By: MIAMI INTERNATIONAL SECURITIES EXCHANGE, LLC




CENSURE AND AN UNDERTAKING REQUIRING THE FIRM TO ADDRESS THEDEFICIENCIES





Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT, FROMFEBRUARY 12, 2018 THROUGH DECEMBER 22, 2020, ITS WRITTENSUPERVISORY PROCEDURES WERE NOT REASONABLY DESIGNED TOPREVENT VIOLATIONS OF APPLICABLE LAWS AND REGULATIONSREQUIRING THE FIRM THE KEEP AND MAINTAIN ACCURATE TIME STAMPSFOR ORDER TICKETS RELATING TO MANUAL OPTIONS ORDERS SENT TOFLOOR BROKERS.



Resolution:

Other Sanctions Ordered: UNDERTAKING TO ADDRESS DEFICIENCIES


Consent







Sanction Details: THE FIRM WAS FINED $2,857 AND CENSURED, AND AGREED TO ANUNDERTAKING TO ADDRESS THE DEFICIENCIES DISCUSSED IN THELETTER OF CONSENT. THIS MATTER WAS PART OF A SINGLESETTLEMENT NEGOTIATED WITH FINRA ENFORCEMENT ON BEHALF OFMIAMI INTERNATIONAL SECURITIES EXCHANGE, LLC OPTIONS MARKETAND OTHER OPTIONS EXCHANGES.

Disclosure 9 of 288

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Initiated By: MIAX PEARL, LLC







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITSSUPERVISORY SYSTEM, INCLUDING ITS WSPS, APPLICABLE TO ITSHANDLING OF MANUAL OPTIONS ORDERS WERE NOT REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH, AND TO DETECT ANDPREVENT VIOLATIONS OF, THE APPLICABLE SECURITIES LAWS,REGULATIONS, AND RECORDKEEPING REQUIREMENTS OF MIAX PEARL.THE FINDINGS STATED THAT IN PARTICULAR, WHILE THE WSPS STATETHAT A REVIEW OF OPTIONS ORDERS IS TO BE CONDUCTED, THEY DONOT SET FORTH THE PROCEDURE BY WHICH THE REVIEW IS TO OCCUR.SIMILARLY, WHILE THE WSPS STATE THAT THE REVIEW SHOULD VERIFYTHAT REQUIRED INFORMATION IS RECORDED, INCLUDING ACCURATETIMESTAMPS, THEY DO NOT SET FORTH HOW THIS VERIFICATION SHOULDOCCUR, OR HOW THE REVIEWER WOULD CONFIRM THAT THEINFORMATION IN A RECORD IS ACCURATE. FURTHER, THE WSPS DO NOTSPECIFY THE NUMBER OF OPTIONS ORDERS THAT ARE SUBJECT TOSUPERVISORY REVIEW, AND THE FREQUENCY WITH WHICH THE FIRMCONDUCTS ITS REVIEW (I.E. ONCE A MONTH), IS UNREASONABLE IN LIGHTOF THE FIRM'S MANUAL OPTIONS ORDER FLOW.









Resolution:


Sanction Details: THE FIRM WAS CENSURED, FINED $2,857, AND SHALL UNDERTAKE TOADDRESS THE DEFICIENCIES DISCUSSED IN THIS LETTER OF CONSENT.


No


Consent


Initiated By: MIAX PEARL, LLC




CENSURE AND AN UNDERTAKING REQUIRING THE FIRM TO ADDRESS THEDEFICIENCIES.







Resolution: Consent48©2022 FINRA. All rights reserved. Report about UBS SECURITIES LLC






Resolution:


Sanction Details: THE FIRM WAS FINED $2,857 AND CENSURED, AND AGREED TO ANUNDERTAKING TO ADDRESS THE DEFICIENCIES DISCUSSED IN THELETTER OF CONSENT. THIS MATTER WAS PART OF A SINGLE SETTLEMENTNEGOTIATED WITH FINRA ENFORCEMENT ON BEHALF OF MIAX PEARL,LLC OPTIONS MARKET AND OTHER OPTIONS EXCHANGES.


Consent

Disclosure 10 of 288

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Initiated By: BOX EXCHANGE LLC







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOESTABLISH, MAINTAIN, AND ENFORCE WSPS REASONABLY DESIGNED TOPREVENT AND DETECT VIOLATIONS OF APPLICABLE SECURITIES LAWSAND REGULATIONS, AND APPLICABLE EXCHANGE RULES. THE FINDINGSSTATED THAT, WHILE THE WSPS STATE THAT A REVIEW OF OPTIONSORDERS IS TO BE CONDUCTED, THEY DO NOT SET FORTH THEPROCEDURE BY WHICH THE REVIEW IS TO OCCUR. SIMILARLY, WHILE THEWSPS STATE THAT THE REVIEW SHOULD VERIFY THAT REQUIREDINFORMATION IS RECORDED, INCLUDING ACCURATE TIMESTAMPS, THEYDO NOT SET FORTH HOW THIS VERIFICATION SHOULD OCCUR, OR HOWTHE REVIEWER WOULD CONFIRM THAT THE INFORMATION IN A RECORDIS ACCURATE. FURTHER, THE WSPS DO NOT SPECIFY THE NUMBER OFOPTIONS ORDERS THAT ARE SUBJECT TO SUPERVISORY REVIEW, ANDTHE FREQUENCY WITH WHICH THE FIRM CONDUCTS ITS REVIEW, ISUNREASONABLE IN LIGHT OF THE FIRM'S MANUAL OPTIONS ORDER FLOW.









Resolution:


Sanction Details: THE FIRM WAS CENSURED, FINED $2,857, AND REQUIRED TO UNDERTAKETO ADDRESS THE DEFICIENCIES DISCUSSED IN THIS LETTER OFCONSENT.


No


Consent


Initiated By: BOX EXCHANGE LLC




CENSURE AND AN UNDERTAKING REQUIRING THE FIRM TO ADDRESS THEDEFICIENCIES













Resolution:

Other Sanctions Ordered: AN UNDERTAKING REQUIRING THE FIRM TO ADDRESS THE DEFICIENCIES.

Sanction Details: THE FIRM WAS FINED $2,857 AND CENSURED, AND AGREED TO ANUNDERTAKING TO ADDRESS THE DEFICIENCIES DISCUSSED IN THELETTER OF CONSENT. THIS MATTER WAS PART OF A SINGLE SETTLEMENTNEGOTIATED WITH FINRA ENFORCEMENT ON BEHALF OF THE BOXEXCHANGE OPTIONS MARKET AND OTHER OPTIONS EXCHANGES.

Firm Statement NOTE: THAT EVEN THOUGH THE BOX SETTLEMENT AGREEMENT WASSIGNED IN SEPTEMBER, THEY HELD IT AND DID NOT ISSUE IT UNTIL LATEDECEMBER (12/22/2020) BECAUSE IT WAS CONTINGENT ON THE MIAX ANDPEARL SETTLEMENTS ALSO BEING APPROVED.


Consent


i


Initiated By: CBOE C2 EXCHANGE, INC.




UNDERTAKING


Docket/Case Number: STAR NO. 20180571696-05 / FILE NO. USE-1905-02



Allegations: THE FIRM FAILED TO ESTABLISH, MAINTAIN AND ENFORCE WSPS, AND ASYSTEM FOR APPLYING SUCH PROCEDURES, REASONABLY DESIGNED TOASSURE COMPLIANCE WITH APPLICABLE FEDERAL SECURITIES LAWSAND C2 RULES IN VIOLATION OF C2 RULE 4.24, AND SUBSEQUENTLY C2RULE 8.16.



Resolution:


No

Consent






Other Sanctions Ordered: AN UNDERTAKING REQUIRING THE FIRM TO ADDRESS THE DEFICIENCIESDISCUSSED IN PARAGRAPH 10 OF THE LETTER OF CONSENT.

Sanction Details: A CENSURE, A MONETARY FINE IN THE AMOUNT OF $5,000 AND ANUNDERTAKING REQUIRING THE FIRM TO ADDRESS THE DEFICIENCIESDISCUSSED IN PARAGRAPH 10 OF THE LETTER OF CONSENT.


No



Initiated By: CBOE C2 EXCHANGE, INC.






Docket/Case Number: 20180571696-05



Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT, FROMFEBRUARY 12, 2018 THROUGH SEPTEMBER 8, 2020, ITS WRITTENSUPERVISORY PROCEDURES WERE NOT REASONABLY DESIGNED TOPREVENT VIOLATIONS OF APPLICABLE LAWS AND REGULATIONSREQUIRING THE FIRM THE KEEP AND MAINTAIN ACCURATE TIME STAMPSFOR ORDER TICKETS RELATING TO MANUAL OPTIONS ORDERS SENT TOFLOOR BROKERS.



Resolution:


Acceptance, Waiver & Consent(AWC)







Sanction Details: THE FIRM WAS FINED $5,000 AND CENSURED, AND AGREED TO ANUNDERTAKING TO ADDRESS THE DEFICIENCIES DISCUSSED IN THELETTER OF CONSENT. THIS MATTER WAS PART OF A SINGLE SETTLEMENTNEGOTIATED WITH FINRA ENFORCEMENT ON BEHALF OF CBOE C2EXCHANGE, INC AND OTHER OPTIONS EXCHANGES.



i






UNDERTAKING





Allegations: THE FIRM FAILED TO ESTABLISH, MAINTAIN AND ENFORCE WSPS, AND ASYSTEM FOR APPLYING SUCH PROCEDURES, REASONABLY DESIGNED TOASSURE COMPLIANCE WITH APPLICABLE FEDERAL SECURITIES LAWSAND EDGX RULES IN VIOLATION OF EDGX RULES 5.1 AND 5.3.



Resolution:



No


Consent







Sanction Details: A CENSURE, A MONETARY FINE IN THE AMOUNT OF $5,000, AND ANUNDERTAKING REQUIRING THE FIRM TO ADDRESS THE DEFICIENCIESDISCUSSED IN PARAGRAPH 9 OF THE LETTER OF CONSENT.














Resolution:

Other Sanctions Ordered: UNDERTAKING TO ADDRESS DEFICENSIES.

Sanction Details: THE FIRM WAS FINED $5,000 AND CENSURED, AND AGREED TO ANUNDERTAKING TO ADDRESS THE DEFICIENCIES DISCUSSED IN THELETTER OF CONSENT. THIS MATTER WAS PART OF A SINGLE SETTLEMENTNEGOTIATED WITH FINRA ENFORCEMENT ON BEHALF OF CBOE EDGXEXCHANGE, INC. AND OTHER OPTIONS EXCHANGES.




i












UNDERTAKING





Allegations: THE FIRM FAILED TO ESTABLISH, MAINTAIN AND ENFORCE WSPS, AND ASYSTEM FOR APPLYING SUCH PROCEDURES, REASONABLY DESIGNED TOASSURE COMPLIANCE WITH APPLICABLE FEDERAL SECURITIES LAWSAND BZX RULES IN VIOLATION OF BZX RULES 5.1 AND 5.3.



Resolution:


Sanction Details: A CENSURE, A MONETARY FINE OF $5,000 AND AN UNDERTAKINGREQUIRING THE FIRM TO ADDRESS THE DEFICIENCIES DISCUSSED INPARAGRAPH 9 OF THE LETTER OF CONSENT.


No


Consent


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT, FROMFEBRUARY 12, 2018 THROUGH SEPTEMBER 8, 2020, ITS WRITTENSUPERVISORY PROCEDURES WERE NOT REASONABLY DESIGNED TOPREVENT VIOLATIONS OF APPLICABLE LAWS AND REGULATIONSREQUIRING THE FIRM THE KEEP AND MAINTAIN ACCURATE TIME STAMPSFOR ORDER TICKETS RELATING TO MANUAL OPTIONS ORDERS SENT TOFLOOR BROKERS
















Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT, FROMFEBRUARY 12, 2018 THROUGH SEPTEMBER 8, 2020, ITS WRITTENSUPERVISORY PROCEDURES WERE NOT REASONABLY DESIGNED TOPREVENT VIOLATIONS OF APPLICABLE LAWS AND REGULATIONSREQUIRING THE FIRM THE KEEP AND MAINTAIN ACCURATE TIME STAMPSFOR ORDER TICKETS RELATING TO MANUAL OPTIONS ORDERS SENT TOFLOOR BROKERS


Resolution:

Other Sanctions Ordered: AN UNDERTAKING REQUIRING THE FIRM TO ADDRESS THE DEFICIENCIES.

Sanction Details: THE FIRM WAS FINED $5,000 AND CENSURED, AND AGREED TO ANUNDERTAKING TO ADDRESS THE DEFICIENCIES DISCUSSED IN THELETTER OF CONSENT. THIS MATTER WAS PART OF A SINGLE SETTLEMENTNEGOTIATED WITH FINRA ENFORCEMENT ON BEHALF OF CBOE BZXEXCHANGE, INC. AND OTHER OPTIONS EXCHANGES.




i


Allegations: THE FIRM FAILED TO RECORD ACCURATE ORDER TRANSMISSION TIMESFOR APPROXIMATELY 16 OF THE 20 SAMPLED MANUAL CUSTOMEROPTIONS ORDERS THAT WERE ROUTED TO AND EXECUTED ON CBOE INVIOLATION OF CBOE RULES 4.2 AND 15.1 AND SECTION 17(A) OF THEEXCHANGE ACT AND RULE 17A-3 THEREUNDER.

IN VIOLATION OF CBOE RULE 4.24, AND SUBSEQUENTLY CBOE RULE 8.16,THE FIRM FAILED TO ESTABLISH, MAINTAIN AND ENFORCE WSPS, AND ASYSTEM FOR APPLYING SUCH PROCEDURES, REASONABLY DESIGNED TOPREVENT AND DETECT VIOLATIONS OF CBOE RULE 15.1 AND SECTION17(A) OF THE EXCHANGE ACT AND RULE 17A-3 THEREUNDER.







Initiated By: CBOE EXCHANGE, INC.




UNDERTAKING





THE FIRM FAILED TO RECORD ACCURATE ORDER TRANSMISSION TIMESFOR APPROXIMATELY 16 OF THE 20 SAMPLED MANUAL CUSTOMEROPTIONS ORDERS THAT WERE ROUTED TO AND EXECUTED ON CBOE INVIOLATION OF CBOE RULES 4.2 AND 15.1 AND SECTION 17(A) OF THEEXCHANGE ACT AND RULE 17A-3 THEREUNDER.

IN VIOLATION OF CBOE RULE 4.24, AND SUBSEQUENTLY CBOE RULE 8.16,THE FIRM FAILED TO ESTABLISH, MAINTAIN AND ENFORCE WSPS, AND ASYSTEM FOR APPLYING SUCH PROCEDURES, REASONABLY DESIGNED TOPREVENT AND DETECT VIOLATIONS OF CBOE RULE 15.1 AND SECTION17(A) OF THE EXCHANGE ACT AND RULE 17A-3 THEREUNDER.


Resolution:

Other Sanctions Ordered: AN UNDERTAKING REQUIRING THE FIRM TO ADDRESS THE DEFICIENCIESDISCUSSED IN PARAGRAPH 15 OF THIS LETTER OF CONSENT

Sanction Details: A CENSURE, A MONETARY FINE IN THE AMOUNT OF $155,000, AND ANUNDERTAKING REQUIRING THE FIRM TO ADDRESS THE DEFICIENCIESDISCUSSED IN PARAGRAPH 15 OF THIS LETTER OF CONSENT.


No


Consent


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT, FROMFEBRUARY 12, 2018 THROUGH SEPTEMBER 8, 2020, (1) ITS WRITTEN SUPERVISORY PROCEDURES WERE NOT REASONABLYDESIGNED TO PREVENT VIOLATIONS OF APPLICABLE LAWS ANDREGULATIONS REQUIRING THE FIRM THE KEEP AND MAINTAIN ACCURATETIME STAMPS FOR ORDER TICKETS RELATING TO MANUAL OPTIONSORDERS SENT TO FLOOR BROKERS, AND (2) IT DID NOT COMPLY WITHLAWS AND REGULATIONS REQUIRING IT TO KEEP ACCURATE TIMESTAMPS ON ORDER TICKETS RELATING TO MANUAL OPTIONS ORDERSSENT TO FLOOR BROKERS.











CENSURE AND AN UNDERTAKING TO ADDRESS DEFICICENCIES.





WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT, FROMFEBRUARY 12, 2018 THROUGH SEPTEMBER 8, 2020, (1) ITS WRITTEN SUPERVISORY PROCEDURES WERE NOT REASONABLYDESIGNED TO PREVENT VIOLATIONS OF APPLICABLE LAWS ANDREGULATIONS REQUIRING THE FIRM THE KEEP AND MAINTAIN ACCURATETIME STAMPS FOR ORDER TICKETS RELATING TO MANUAL OPTIONSORDERS SENT TO FLOOR BROKERS, AND (2) IT DID NOT COMPLY WITHLAWS AND REGULATIONS REQUIRING IT TO KEEP ACCURATE TIMESTAMPS ON ORDER TICKETS RELATING TO MANUAL OPTIONS ORDERSSENT TO FLOOR BROKERS.


Resolution:

Other Sanctions Ordered: CENSURE AND AN UNDERTAKING TO ADDRESS DEFICICENCIES.

Sanction Details: THE FIRM WAS FINED $155,000 AND CENSURED, AND AGREED TO ANUNDERTAKING TO ADDRESS THE DEFICIENCIES DISCUSSED IN THELETTER OF CONSENT. THIS MATTER WAS PART OF A SINGLE SETTLEMENTNEGOTIATED WITH FINRA ENFORCEMENT ON BEHALF OF CBOEEXCHANGE INC. AND OTHER OPTIONS EXCHANGES.




i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITSSUPERVISORY SYSTEM, INCLUDING ITS WRITTEN SUPERVISORYPROCEDURES (WSPS), APPLICABLE TO ITS HANDLING OF MANUALOPTIONS ORDERS, WERE NOT REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH, AND TO DETECT AND PREVENT VIOLATIONS OF, THEAPPLICABLE SECURITIES LAWS, REGULATIONS, AND RECORDKEEPINGREQUIREMENTS OF THE NASDAQ OPTIONS MARKET LLC. THE FINDINGSSTATED THAT WHILE THE WSPS STATE THAT A REVIEW OF OPTIONSORDERS IS TO BE CONDUCTED, THEY DO NOT SET FORTH THEPROCEDURE BY WHICH THE REVIEW IS TO OCCUR. SIMILARLY, WHILE THEWSPS STATE THAT THE REVIEW SHOULD VERIFY THAT REQUIREDINFORMATION IS RECORDED, INCLUDING ACCURATE TIMESTAMPS, THEYDO NOT SET FORTH HOW THIS VERIFICATION SHOULD OCCUR, OR HOWTHE REVIEWER WOULD CONFIRM THAT THE INFORMATION IN A RECORDIS ACCURATE. FURTHER, THE WSPS DO NOT SPECIFY THE NUMBER OFOPTIONS ORDERS THAT ARE SUBJECT TO SUPERVISORY REVIEW, ANDTHE FREQUENCY WITH WHICH THE FIRM CONDUCTS ITS REVIEW (I.E.ONCE A MONTH), IS UNREASONABLE IN LIGHT OF THE FIRM'S MANUALOPTIONS ORDER FLOW.







Initiated By: NASDAQ OPTIONS MARKET







WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITSSUPERVISORY SYSTEM, INCLUDING ITS WRITTEN SUPERVISORYPROCEDURES (WSPS), APPLICABLE TO ITS HANDLING OF MANUALOPTIONS ORDERS, WERE NOT REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH, AND TO DETECT AND PREVENT VIOLATIONS OF, THEAPPLICABLE SECURITIES LAWS, REGULATIONS, AND RECORDKEEPINGREQUIREMENTS OF THE NASDAQ OPTIONS MARKET LLC. THE FINDINGSSTATED THAT WHILE THE WSPS STATE THAT A REVIEW OF OPTIONSORDERS IS TO BE CONDUCTED, THEY DO NOT SET FORTH THEPROCEDURE BY WHICH THE REVIEW IS TO OCCUR. SIMILARLY, WHILE THEWSPS STATE THAT THE REVIEW SHOULD VERIFY THAT REQUIREDINFORMATION IS RECORDED, INCLUDING ACCURATE TIMESTAMPS, THEYDO NOT SET FORTH HOW THIS VERIFICATION SHOULD OCCUR, OR HOWTHE REVIEWER WOULD CONFIRM THAT THE INFORMATION IN A RECORDIS ACCURATE. FURTHER, THE WSPS DO NOT SPECIFY THE NUMBER OFOPTIONS ORDERS THAT ARE SUBJECT TO SUPERVISORY REVIEW, ANDTHE FREQUENCY WITH WHICH THE FIRM CONDUCTS ITS REVIEW (I.E.ONCE A MONTH), IS UNREASONABLE IN LIGHT OF THE FIRM'S MANUALOPTIONS ORDER FLOW.


Resolution:


Sanction Details: THE FIRM WAS CENSURED, FINED $2,857 AND REQUIRED TO ADDRESSTHE DEFICIENCIES DISCUSSED IN THE LETTER OF CONSENT.ACCEPTANCE OF THIS AWC IS CONDITIONED UPON ACCEPTANCE OFSIMILAR SETTLEMENT AGREEMENTS IN RELATED MATTERS BETWEEN THEFIRM AND EACH OF THE FOLLOWING SELF-REGULATORY ORGANIZATIONS:(I) BOX EXCHANGE, LLC; (II) MIAMI INTERNATIONAL SECURITIESEXCHANGE; (III) MIAX PEARL, LLC; (IV) NASDAQ GEMX, LLC; (V) NASDAQISE, LLC; (VI) NASDAQ PHLX, LLC; (VII) CBOE EXCHANGE, INC.; (VIII) CBOEC2 EXCHANGE, INC.; (IX) CBOE BZX EXCHANGE, INC.; AND (X) CBOE EDGXEXCHANGE, INC.


No








THE FIRM WAS CENSURED, FINED $2,857 AND REQUIRED TO ADDRESSTHE DEFICIENCIES DISCUSSED IN THE LETTER OF CONSENT.ACCEPTANCE OF THIS AWC IS CONDITIONED UPON ACCEPTANCE OFSIMILAR SETTLEMENT AGREEMENTS IN RELATED MATTERS BETWEEN THEFIRM AND EACH OF THE FOLLOWING SELF-REGULATORY ORGANIZATIONS:(I) BOX EXCHANGE, LLC; (II) MIAMI INTERNATIONAL SECURITIESEXCHANGE; (III) MIAX PEARL, LLC; (IV) NASDAQ GEMX, LLC; (V) NASDAQISE, LLC; (VI) NASDAQ PHLX, LLC; (VII) CBOE EXCHANGE, INC.; (VIII) CBOEC2 EXCHANGE, INC.; (IX) CBOE BZX EXCHANGE, INC.; AND (X) CBOE EDGXEXCHANGE, INC.











Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THEENTRY OF FINDINGS THAT, FROM FEBRUARY 12, 2018 THROUGHSEPTEMBER 15, 2020, ITS WRITTENSUPERVISORY PROCEDURES WERE NOT REASONABLY DESIGNED TOPREVENT VIOLATIONS OF APPLICABLELAWS AND REGULATIONS REQUIRING THE FIRM THE KEEP AND MAINTAINACCURATE TIME STAMPS FOR ORDERTICKETS RELATING TO MANUAL OPTIONS ORDERS SENT TO FLOORBROKERS.



Resolution:


Sanction Details: THE FIRM WAS FINED $2,857 AND CENSURED, AND AGREED TO ANUNDERTAKING TO ADDRESS THEDEFICIENCIES DISCUSSED IN THE LETTER OF CONSENT. THIS MATTERWAS PART OF A SINGLESETTLEMENT NEGOTIATED WITH FINRA ENFORCEMENT ON BEHALF OFNASDAQ OPTIONS MARKET AND OTHER OPTIONSEXCHANGES.








THE FIRM WAS FINED $2,857 AND CENSURED, AND AGREED TO ANUNDERTAKING TO ADDRESS THEDEFICIENCIES DISCUSSED IN THE LETTER OF CONSENT. THIS MATTERWAS PART OF A SINGLESETTLEMENT NEGOTIATED WITH FINRA ENFORCEMENT ON BEHALF OFNASDAQ OPTIONS MARKET AND OTHER OPTIONSEXCHANGES.


i


Initiated By: NASDAQ GEMX, LLC







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITSSUPERVISORY SYSTEM, INCLUDING ITS WRITTEN SUPERVISORYPROCEDURES (WSPS), APPLICABLE TO ITS HANDLING OF MANUALOPTIONS ORDERS, WERE NOT REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH, AND TO DETECT AND PREVENT VIOLATIONS OF, THEAPPLICABLE SECURITIES LAWS, REGULATIONS, AND RECORDKEEPINGREQUIREMENTS OF GEMX. THE FINDINGS STATED THAT WHILE THE WSPSSTATE THAT A REVIEW OF OPTIONS ORDERS IS TO BE CONDUCTED, THEYDO NOT SET FORTH THE PROCEDURE BY WHICH THE REVIEW IS TOOCCUR. SIMILARLY, WHILE THE WSPS STATE THAT THE REVIEW SHOULDVERIFY THAT REQUIRED INFORMATION IS RECORDED, INCLUDINGACCURATE TIMESTAMPS, THEY DO NOT SET FORTH HOW THISVERIFICATION SHOULD OCCUR, OR HOW THE REVIEWER WOULDCONFIRM THAT THE INFORMATION IN A RECORD IS ACCURATE. FURTHER,THE WSPS DO NOT SPECIFY THE NUMBER OF OPTIONS ORDERS THATARE SUBJECT TO SUPERVISORY REVIEW, AND THE FREQUENCY WITHWHICH THE FIRM CONDUCTS ITS REVIEW (I.E. ONCE A MONTH), ISUNREASONABLE IN LIGHT OF THE FIRM'S MANUAL OPTIONS ORDER FLOW.



Resolution: Acceptance, Waiver & Consent(AWC)








Sanction Details: THE FIRM WAS CENSURED, FINED $2,857 AND REQUIRED TO ADDRESSTHE DEFICIENCIES DISCUSSED IN THE LETTER OF CONSENT.ACCEPTANCE OF THIS AWC IS CONDITIONED UPON ACCEPTANCE OFSIMILAR SETTLEMENT AGREEMENTS IN RELATED MATTERS BETWEEN THEFIRM AND EACH OF THE FOLLOWING SELF-REGULATORY ORGANIZATIONS:(I) BOX EXCHANGE, LLC; (II) MIAMI INTERNATIONAL SECURITIESEXCHANGE; (III) MIAX PEARL, LLC; (IV) NASDAQ OPTIONS MARKET LLC; (V)NASDAQ ISE, LLC; (VI) NASDAQ PHLX, LLC; (VII) CBOE EXCHANGE, INC.;(VIII) CBOE C2 EXCHANGE, INC.; (IX) CBOE BZX EXCHANGE, INC.; AND (X)CBOE EDGX EXCHANGE, INC.


No



Initiated By: NASDAQ GEMX, LLC















CENSUREUNDERTAKING TO ADDRESS DEFICIENCES.


Resolution:


Sanction Details: THE FIRM WAS FINED $2,857 AND CENSURED, AND AGREED TO ANUNDERTAKING TO ADDRESS THE DEFICIENCIES DISCUSSED IN THELETTER OF CONSENT. THIS MATTER WAS PART OF A SINGLE SETTLEMENTNEGOTIATED WITH FINRA ENFORCEMENT ON BEHALF OF NASDAQ GEMXAND OTHER OPTIONS EXCHANGES.




i


Initiated By: NASDAQ ISE, LLC



Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITSSUPERVISORY SYSTEM, INCLUDING ITS WRITTEN SUPERVISORYPROCEDURES (WSPS), APPLICABLE TO ITS HANDLING OF MANUALOPTIONS ORDERS, WERE NOT REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH, AND TO DETECT AND PREVENT VIOLATIONS OF, THEAPPLICABLE SECURITIES LAWS, REGULATIONS, AND RECORDKEEPINGREQUIREMENTS OF ISE. THE FINDINGS STATED THAT WHILE THE WSPSSTATE THAT A REVIEW OF OPTIONS ORDERS IS TO BE CONDUCTED, THEYDO NOT SET FORTH THE PROCEDURE BY WHICH THE REVIEW IS TOOCCUR. SIMILARLY, WHILE THE WSPS STATE THAT THE REVIEW SHOULDVERIFY THAT REQUIRED INFORMATION IS RECORDED, INCLUDINGACCURATE TIMESTAMPS, THEY DO NOT SET FORTH HOW THISVERIFICATION SHOULD OCCUR, OR HOW THE REVIEWER WOULDCONFIRM THAT THE INFORMATION IN A RECORD IS ACCURATE. FURTHER,THE WSPS DO NOT SPECIFY THE NUMBER OF OPTIONS ORDERS THATARE SUBJECT TO SUPERVISORY REVIEW, AND THE FREQUENCY WITHWHICH THE FIRM CONDUCTS ITS REVIEW (I.E. ONCE A MONTH), ISUNREASONABLE IN LIGHT OF THE FIRM'S MANUAL OPTIONS ORDER FLOW.












Resolution:


Sanction Details: THE FIRM WAS CENSURED, FINED $2,857 AND REQUIRED TO ADDRESSTHE DEFICIENCIES DISCUSSED IN THE LETTER OF CONSENT.ACCEPTANCE OF THIS AWC IS CONDITIONED UPON ACCEPTANCE OFSIMILAR SETTLEMENT AGREEMENTS IN RELATED MATTERS BETWEEN THEFIRM AND EACH OF THE FOLLOWING SELF-REGULATORY ORGANIZATIONS:(I) BOX EXCHANGE, LLC; (II) MIAMI INTERNATIONAL SECURITIESEXCHANGE; (III) MIAX PEARL, LLC; (IV) NASDAQ GEMX, LLC; (V) NASDAQPHLX, LLC; (VI) THE NASDAQ OPTIONS MARKET LLC; (VII) CBOEEXCHANGE, INC.; (VIII) CBOE C2 EXCHANGE, INC.; (IX) CBOE BZXEXCHANGE, INC.; AND (X) CBOE EDGX EXCHANGE, INC.


No











Initiated By: NASDAQ ISE, LLC










Resolution:


Sanction Details: THE FIRM WAS FINED $2,857 AND CENSURED, AND AGREED TO ANUNDERTAKING TO ADDRESS THE DEFICIENCIES DISCUSSED IN THELETTER OF CONSENT. THIS MATTER WAS PART OF A SINGLE SETTLEMENTNEGOTIATED WITH FINRA ENFORCEMENT ON BEHALF OF NASDAQ ISEAND OTHER OPTIONS EXCHANGES.




i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITSSUPERVISORY SYSTEM, INCLUDING ITS WRITTEN SUPERVISORYPROCEDURES (WSPS), APPLICABLE TO ITS HANDLING OF MANUALOPTIONS ORDERS, WERE NOT REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH, AND TO DETECT AND PREVENT VIOLATIONS OF, THEAPPLICABLE SECURITIES LAWS, REGULATIONS, AND RECORDKEEPINGREQUIREMENTS OF PHLX. WHILE THE WSPS STATE THAT A REVIEW OFOPTIONS ORDERS IS TO BE CONDUCTED, THEY DO NOT SET FORTH THEPROCEDURE BY WHICH THE REVIEW IS TO OCCUR. SIMILARLY, WHILE THEWSPS STATE THAT THE REVIEW SHOULD VERIFY THAT REQUIREDINFORMATION IS RECORDED, INCLUDING ACCURATE TIMESTAMPS, THEYDO NOT SET FORTH HOW THIS VERIFICATION SHOULD OCCUR, OR HOWTHE REVIEWER WOULD CONFIRM THAT THE INFORMATION IN A RECORDIS ACCURATE. FURTHER, THE WSPS DO NOT SPECIFY THE NUMBER OFOPTIONS ORDERS THAT ARE SUBJECT TO SUPERVISORY REVIEW, ANDTHE FREQUENCY WITH WHICH THE FIRM CONDUCTS ITS REVIEW (I.E.ONCE A MONTH), IS UNREASONABLE IN LIGHT OF THE FIRM'S MANUALOPTIONS ORDER FLOW.







Initiated By: NASDAQ PHLX LLC







WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITSSUPERVISORY SYSTEM, INCLUDING ITS WRITTEN SUPERVISORYPROCEDURES (WSPS), APPLICABLE TO ITS HANDLING OF MANUALOPTIONS ORDERS, WERE NOT REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH, AND TO DETECT AND PREVENT VIOLATIONS OF, THEAPPLICABLE SECURITIES LAWS, REGULATIONS, AND RECORDKEEPINGREQUIREMENTS OF PHLX. WHILE THE WSPS STATE THAT A REVIEW OFOPTIONS ORDERS IS TO BE CONDUCTED, THEY DO NOT SET FORTH THEPROCEDURE BY WHICH THE REVIEW IS TO OCCUR. SIMILARLY, WHILE THEWSPS STATE THAT THE REVIEW SHOULD VERIFY THAT REQUIREDINFORMATION IS RECORDED, INCLUDING ACCURATE TIMESTAMPS, THEYDO NOT SET FORTH HOW THIS VERIFICATION SHOULD OCCUR, OR HOWTHE REVIEWER WOULD CONFIRM THAT THE INFORMATION IN A RECORDIS ACCURATE. FURTHER, THE WSPS DO NOT SPECIFY THE NUMBER OFOPTIONS ORDERS THAT ARE SUBJECT TO SUPERVISORY REVIEW, ANDTHE FREQUENCY WITH WHICH THE FIRM CONDUCTS ITS REVIEW (I.E.ONCE A MONTH), IS UNREASONABLE IN LIGHT OF THE FIRM'S MANUALOPTIONS ORDER FLOW.


Resolution:


Sanction Details: THE FIRM WAS CENSURED, FINED $2,857 AND REQUIRED TO ADDRESSTHE DEFICIENCIES DISCUSSED IN THE LETTER OF CONSENT.ACCEPTANCE OF THIS AWC IS CONDITIONED UPON ACCEPTANCE OFSIMILAR SETTLEMENT AGREEMENTS IN RELATED MATTERS BETWEEN THEFIRM AND EACH OF THE FOLLOWING SELF-REGULATORY ORGANIZATIONS:(I) BOX EXCHANGE, LLC; (II) MIAMI INTERNATIONAL SECURITIESEXCHANGE; (III) MIAX PEARL, LLC; (IV) NASDAQ GEMX, LLC; (V) NASDAQISE, LLC; (VI) THE NASDAQ OPTIONS MARKET LLC; (VII) CBOE EXCHANGE,INC.; (VIII) CBOE C2 EXCHANGE, INC.; (IX) CBOE BZX EXCHANGE, INC.; AND(X) CBOE EDGX EXCHANGE, INC.


No



iReporting Source:
















Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THEENTRY OF FINDINGS THAT, FROM FEBRUARY 12, 2018 THROUGHSEPTEMBER 15, 2020, ITS WRITTENSUPERVISORY PROCEDURES WERE NOT REASONABLY DESIGNED TOPREVENT VIOLATIONS OF APPLICABLELAWS AND REGULATIONS REQUIRING THE FIRM THE KEEP AND MAINTAINACCURATE TIME STAMPS FOR ORDERTICKETS RELATING TO MANUAL OPTIONS ORDERS SENT TO FLOORBROKERS.



Resolution:

Other Sanctions Ordered: UNDERTAKING TO ADDRESS DEFICICENCIES.

Sanction Details: THE FIRM WAS FINED $2,857 AND CENSURED, AND AGREED TO ANUNDERTAKING TO ADDRESS THEDEFICIENCIES DISCUSSED IN THE LETTER OF CONSENT. THIS MATTERWAS PART OF A SINGLESETTLEMENT NEGOTIATED WITH FINRA ENFORCEMENT ON BEHALF OFNASDAQ PHLX LLC AND OTHER OPTIONSEXCHANGES.




i







Initiated By: NYSE ARCA, INC.


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT BUSTEDAND ADJUSTED TRADES IN A MANNER THAT CIRCUMVENTED EXCHANGERULES. THE FINDINGS STATED THAT THE FIRM INSTRUCTED FLOORBROKERS TO EXECUTE TRADES WITH THE KNOWLEDGE THAT THE PRICEAGREED TO BY ITS CUSTOMER WAS OUT OF RANGE, WITH THE INTENTIONOF NULLIFYING THAT EXECUTION AND RE-TRADING THE ORDER IF ANDWHEN THE PRICE DID COME BACK IN RANGE. THIS APPROACH ISDISRUPTIVE TO THE MARKET, COULD RESULT IN POTENTIAL PRIORITYAND TRADE-THROUGH VIOLATIONS AND INTERFERES WITH THE ABILITYOF OTHER MARKET PARTICIPANTS TO PARTICIPATE ON TRADES. THEFINDINGS ALSO STATED THAT THE FIRM FAILED TO COMPLY WITH ITS DUEDILIGENCE AND BEST EXECUTION OBLIGATIONS WITH RESPECT TO ITSHANDLING OF CUSTOMER ORDERS. FIRM TRADERS EXECUTED TRADES,PROVIDING PRICES THAT WERE WORSE FOR THE CUSTOMERS,RESULTING IN CUSTOMER HARM. THE FINDINGS ALSO INCLUDED THATTHE FIRM FAILED TO CREATE, MAINTAIN, AND PRESERVE ACCURATERECORDS OF CANCELLATIONS OR ADJUSTMENTS TO CUSTOMERORDERS AND FAILED TO CREATE, MAINTAIN, AND PRESERVE ACCURATERECORDS OF ORDER RECEIPT AND ORDER TRANSMISSION TIMES FORORDERS MANUALLY ROUTED FOR EXECUTION. NYSE ARCA, INC. FOUNDTHAT THE FIRM FAILED TO ESTABLISH AND MAINTAIN ADEQUATESUPERVISORY SYSTEMS AND WSPS THAT WERE REASONABLY DESIGNEDTO ENSURE COMPLIANCE WITH ITS BUST AND ADJUST OR BESTEXECUTION OBLIGATIONS. THE FIRM DID NOT DOCUMENT ANY ASPECT OFANY BUSTED AND ADJUSTED TRADE, INCLUDING THE BUST/ADJUSTINSTRUCTION AND THE CUSTOMER AGREEMENT, NOR DID ITS WSPSADDRESS BUST AND ADJUST REQUIREMENTS. ADDITIONALLY, THE FIRMDID NOT HAVE ANY REVIEWS IN PLACE RELATED TO COMPLIANCE WITHITS BUST/ADJUST OBLIGATIONS. THE FIRM ALSO FAILED TO ESTABLISHAND MAINTAIN A SUPERVISORY SYSTEM AND PROCEDURES REASONABLYDESIGNED TO ENSURE COMPLIANCE WITH ITS BEST EXECUTIONOBLIGATIONS. THE FIRM'S BEST EXECUTION REVIEW ONLY COVERED ITSELECTRONIC ORDERS IN THE AGGREGATE, AND DID NOT HAVE SYSTEMSOR WSPS THAT REVIEWED ANY MANUAL OPTIONS ORDERS, INCLUDINGTHE ORDER'S IN THIS MATTER. THE FIRM FAILED TO ESTABLISH ANDMAINTAIN A SUPERVISORY SYSTEM AND PROCEDURES REASONABLYDESIGNED TO ENSURE THE CREATION AND RETENTION OF ACCURATERECORDS FOR ITS MANUAL OPTIONS ORDERS, INCLUDING ACCURATERECORDS OF ALL ORDER MODIFICATIONS AND CANCELLATIONS, THETIME AT WHICH THE ORDERS WERE RECEIVED, AND THE TIME AT WHICHTHE ORDERS WERE TRANSMITTED FOR EXECUTION.














Resolution:


Sanction Details: THE FIRM WAS CENSURED, FINED $490,000 AND IS REQUIRED TO PROVIDEA CERTIFICATION THAT IT HAS TAKEN REASONABLE STEPS TO ENSURETHE ACCURATE RECORDING OF: (1) THE TIMES THAT VERBAL ORDERSARE RECEIVED FROM CLIENTS; (2) THE TIMES THAT ORDERS ARESUBMITTED TO THE FLOOR FOR EXECUTION; AND (3) ANYCANCELLATIONS OF ORDERS AND NEW EXECUTIONS.

Regulator Statement IN CONNECTION WITH NYSE REGULATION'S INVESTIGATION, THE FIRMOFFERED THE CUSTOMERS WHO WERE IMPACTED BY THEAFOREMENTIONED TRADES RESTITUTION IN THE AMOUNT OF $43,544.


No




Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND THE ENTRY OF FINDINGS THAT IT BUSTED ANDADJUSTED TRADES IN A MANNER THAT CIRCUMVENTED EXCHANGERULES. THE FINDINGS STATED THAT THE FIRM INSTRUCTED FLOORBROKERS TO EXECUTE TRADES WITH THE KNOWLEDGE THAT THE PRICEAGREED TO BY ITS CUSTOMER WAS OUT OF RANGE, WITH THE INTENTIONOF NULLIFYING THAT EXECUTION AND RE-TRADING THE ORDER IF ANDWHEN THE PRICE DID COME BACK IN RANGE. THE FINDINGS ALSOSTATED THAT THE FIRM FAILED TO COMPLY WITH ITS DUE DILIGENCE ANDBEST EXECUTION OBLIGATIONS WITH RESPECT TO ITS HANDLING OFCUSTOMER ORDERS (RESULTING IN CUSTOMER HARM). THE FINDINGSALSO INCLUDED THAT THE FIRM FAILED TO CREATE, MAINTAIN, ANDPRESERVE ACCURATE RECORDS OF CANCELLATIONS OR ADJUSTMENTSTO (I) CUSTOMER ORDERS; (II) ORDER RECEIPT; AND (III) ORDERTRANSMISSION TIMES FOR ORDERS MANUALLY ROUTED FOREXECUTION. THE FINDINGS INCLUDED THAT THE FIRM FAILED TOESTABLISH AND MAINTAIN ADEQUATE SUPERVISORY SYSTEMS ANDWRITTEN SUPERVISORY PROCEDUES THAT WERE REASONABLYDESIGNED TO ENSURE COMPLIANCE WITH ITS BUST AND ADJUST ORBEST EXECUTION OBLIGATIONS. ADDITIONALLY THE FINDINGS INCLUDEDTHAT THE FIRM FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORYSYSTEM AND PROCEDURES REASONABLY DESIGNED TO ENSURE THECREATION AND RETENTION OF ACCURATE RECORDS FOR ITS MANUALOPTIONS ORDERS, INCLUDING ACCURATE RECORDS OF ALL ORDERMODIFICATIONS AND CANCELLATIONS, THE TIME AT WHICH THE ORDERSWERE RECEIVED, AND THE TIME AT WHICH THE ORDERS WERETRANSMITTED FOR EXECUTION.












Docket/Case Number: 2017-04-00071



WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND THE ENTRY OF FINDINGS THAT IT BUSTED ANDADJUSTED TRADES IN A MANNER THAT CIRCUMVENTED EXCHANGERULES. THE FINDINGS STATED THAT THE FIRM INSTRUCTED FLOORBROKERS TO EXECUTE TRADES WITH THE KNOWLEDGE THAT THE PRICEAGREED TO BY ITS CUSTOMER WAS OUT OF RANGE, WITH THE INTENTIONOF NULLIFYING THAT EXECUTION AND RE-TRADING THE ORDER IF ANDWHEN THE PRICE DID COME BACK IN RANGE. THE FINDINGS ALSOSTATED THAT THE FIRM FAILED TO COMPLY WITH ITS DUE DILIGENCE ANDBEST EXECUTION OBLIGATIONS WITH RESPECT TO ITS HANDLING OFCUSTOMER ORDERS (RESULTING IN CUSTOMER HARM). THE FINDINGSALSO INCLUDED THAT THE FIRM FAILED TO CREATE, MAINTAIN, ANDPRESERVE ACCURATE RECORDS OF CANCELLATIONS OR ADJUSTMENTSTO (I) CUSTOMER ORDERS; (II) ORDER RECEIPT; AND (III) ORDERTRANSMISSION TIMES FOR ORDERS MANUALLY ROUTED FOREXECUTION. THE FINDINGS INCLUDED THAT THE FIRM FAILED TOESTABLISH AND MAINTAIN ADEQUATE SUPERVISORY SYSTEMS ANDWRITTEN SUPERVISORY PROCEDUES THAT WERE REASONABLYDESIGNED TO ENSURE COMPLIANCE WITH ITS BUST AND ADJUST ORBEST EXECUTION OBLIGATIONS. ADDITIONALLY THE FINDINGS INCLUDEDTHAT THE FIRM FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORYSYSTEM AND PROCEDURES REASONABLY DESIGNED TO ENSURE THECREATION AND RETENTION OF ACCURATE RECORDS FOR ITS MANUALOPTIONS ORDERS, INCLUDING ACCURATE RECORDS OF ALL ORDERMODIFICATIONS AND CANCELLATIONS, THE TIME AT WHICH THE ORDERSWERE RECEIVED, AND THE TIME AT WHICH THE ORDERS WERETRANSMITTED FOR EXECUTION.


Resolution:


Sanction Details: THE FIRM WAS CENSURED, FINED $490,000, AND IS REQUIRED TOPROVIDE A CERTIFICATION WITHIN 180 DAYS THAT IT HAS TAKENREASONABLE STEPS TO ENSURE THE ACCURATE RECORDING OF: (1) THETIMES THAT VERBAL ORDERS ARE RECEIVED FROM CLIENTS; (2) THETIMES THAT ORDERS ARE SUBMITTED TO THE EXCHANGE FLOOR FOREXECUTION; AND (3) ANY CANCELLATIONS OF ORDERS AND NEWEXECUTIONS.








THE FIRM WAS CENSURED, FINED $490,000, AND IS REQUIRED TOPROVIDE A CERTIFICATION WITHIN 180 DAYS THAT IT HAS TAKENREASONABLE STEPS TO ENSURE THE ACCURATE RECORDING OF: (1) THETIMES THAT VERBAL ORDERS ARE RECEIVED FROM CLIENTS; (2) THETIMES THAT ORDERS ARE SUBMITTED TO THE EXCHANGE FLOOR FOREXECUTION; AND (3) ANY CANCELLATIONS OF ORDERS AND NEWEXECUTIONS.

Firm Statement IN CONNECTION WITH THIS MATTER, THE FIRM OFFERED THECUSTOMERS WHO WERE ALLEGEDLY IMPACTED BY THEAFOREMENTIONED TRADES RESTITUTION IN THE AMOUNT OF $43,544.


i







Docket/Case Number: 2018.06.0007



Allegations: BETWEEN JANUARY 1, 2018 AND AUGUST 21, 2018, THE FIRM FAILED TOPROVIDE INFORMATION IN ITS LOPR SUBMISSIONS THAT MATCHED THEOPTIONS CLEARING CORP. OPTIONS CONTRACTS IN 12,097 INSTANCES.FROM JANUARY 1, 2018 THROUGH JUNE 28, 2019, THE FIRM FAILED TOESTABLISH, MAINTAIN, AND ENFORCE ADEQUATE WRITTEN SUPERVISORYPROCEDURES RELATING TO LOPR REPORTING ON THE PHLX.



Resolution:


No









Sanction Details: IMPOSED $15,000 FINE TO BE LEVIED AGAINST THE FIRM WITHIN 30 DAYS.







CENSURE


Docket/Case Number: 2018.06.0007



Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, UBS SECURITIES LLC("UBS" OR THE "FIRM") CONSENTED TO THE SANCTIONS AND TO THEENTRY OF FINDINGS THAT BETWEEN JANUARY 1, 2018 AND AUGUST 21,2018 (THE "REVIEW PERIOD"), THE FIRM FAILED TO PROVIDEINFORMATION IN ITS LOPR SUBMISSIONS THAT MATCHED THE OPTIONSCLEARING CORP. ("OCC") OPTIONS CONTRACTS POSITIONS IN 12,097INSTANCES, IN VIOLATION OF PHLX RULE 1003(A). THE FINDINGS ALSOSTATED THAT FROM JANUARY 1, 2018 THROUGH JUNE 28, 2019 (THE "SUPERVISORY REVIEW PERIOD"), THE FIRM FAILED TO ESTABLISHADEQUATE SUPERVISORY SYSTEMS AND CONTROLS THAT WEREREASONABLY DESIGNED TO PREVENT AND DETECT, INSOFAR ASPRACTICABLE, VIOLATIONS OF THE PHLX CONCERNING LOPRREPORTING, IN VIOLATION OF PHLX RULE 748.



Resolution:


Sanction Details: A CENSURE AND A FINE IN THE AMOUNT OF $15,000.00 (CONSISTING OF A$12,500 FINE FOR OPTIONS REPORTING VIOLATIONS AND A $2,500 FINEFOR SUPERVISION VIOLATIONS)








A CENSURE AND A FINE IN THE AMOUNT OF $15,000.00 (CONSISTING OF A$12,500 FINE FOR OPTIONS REPORTING VIOLATIONS AND A $2,500 FINEFOR SUPERVISION VIOLATIONS)


i


Initiated By: NEW YORK STOCK EXCHANGE


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, UBS SECURITIES LLC("UBS" OR THE "FIRM") CONSENTED TO THE SANCTIONS AND TO THEENTRY OF FINDINGS THAT THE FIRM SUBMITTED MILLIONS OFTRANSACTIONS WITH DISCONTINUED ACCOUNT TYPE INDICATOR ("ATIS")FOR COMPARISON AND/OR SETTLEMENT.THE FINDINGS STATED THAT THE SUBMISSION OF ACCURATE ATIS ISIMPORTANT BECAUSE, AMONG OTHER REASONS, NYSE AND FINRA USEAUDIT TRAIL DATA IN THE SURVEILLANCE REVIEW PROCESS, ANDINACCURACIES IN THAT DATA CAN HAMPER THE ABILITY TO DETECTPOTENTIALLY VIOLATIVE CONDUCT OR CREATE FALSE POSITIVE ALERTSREQUIRING THE UNNECESSARY EXPENDITURE OF RESOURCES.THROUGH INFORMATION MEMO 02-59 (DECEMBER 17, 2002), NYSEPROVIDED TO MEMBER FIRMS A LIST OF ATIS THAT FIRMS WEREREQUIRED TO USE IN ORDER TO COMPLY WITH NYSE RULE 132. NYSEISSUED UPDATED GUIDANCE ON THE USE OF ATIS IN, INTER ALIA, NYSEINFORMATION MEMOS 12-25 (OCTOBER 9, 2012) AND 16-2 (FEBRUARY 29,2016) ("IM 16- 2"). IM 16-2 SET FORTH "THE DEFINITIVE SOURCE FORDEFINITIONS OF ACCOUNT TYPE INDICATORS FOR REPORTINGREQUIREMENTS MANDATED UNDER EXCHANGE RULES." PURSUANT TOTHE MEMO, THE NUMBER OF ACCEPTABLE ATIS WAS REDUCED TO FOUR,AND MEMBER FIRMS WERE REQUIRED TO DISCONTINUE THE USE OF ATI "Y" (AMONG OTHER DISCONTINUED ATIS) AS OF AUGUST 1, 2016. UBSWAS AWARE OF THE CHANGES IM 16-2 REQUIRED AND EFFECTEDCHANGES TO ITS INTERNAL TRADING INFRASTRUCTURE TO ACHIEVECOMPLIANCE WITH NYSE RULE 132. HOWEVER, THE FIRM ALSO ENABLEDCERTAIN CUSTOMERS TO ROUTE ORDERS TO THE EXCHANGE VIASPONSORED THIRD-PARTY PLATFORMS AND FAILED TO ENSURE THATSAID PLATFORMS PERFORMED UPDATES TO THEIR TRADING PLATFORMSTO ACHIEVE COMPLIANCE WITH NYSE RULE 132. AS A RESULT, UBSSUBMITTED APPROXIMATELY 42.5 MILLION ORDERS WITH THE ATI "Y" INVIOLATION OF NYSE RULES 132 AND 7.33.THE FINDINGS ALSO STATED THAT IN ADDITION, THE FIRM FAILED TOIMPLEMENT ADEQUATE SUPERVISORY SYSTEMS AND CONTROLS,INCLUDING A SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW,REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULE 132AND 7.33 PERTAINING TO THE SUBMISSION OF ATI CODES.











Principal Product Type: Other

Other Product Type(s): UNSPECIFIED SECURITIES


Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $125,000.


No






Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, UBS SECURITIES LLC("UBS" OR THE "FIRM") CONSENTED TO THE SANCTIONS AND TO THEENTRY OF FINDINGS THAT THE FIRM SUBMITTED MILLIONS OFTRANSACTIONS WITH DISCONTINUED ACCOUNT TYPE INDICATOR ("ATI")FOR COMPARISON AND/OR SETTLEMENT. SPECIFICALLY THE FINDINGSSTATED THAT THE FIRM SUBMITTED APPROXIMATELY 42.5 MILLIONORDERS WITH THE ATI "Y" IN VIOLATION OF NYSE RULES 132 AND 7.33.THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO IMPLEMENTADEQUATE SUPERVISORY SYSTEMS AND CONTROLS, INCLUDING ASEPARATE SYSTEM OF FOLLOW-UP AND REVIEW, REASONABLY DESIGNEDTO ACHIEVE COMPLIANCE WITH NYSE RULE 132 AND 7.33 PERTAINING TOTHE SUBMISSION OF ATI CODES.














Resolution:






i


Initiated By: CME CLEARING HOUSE



Allegations: DURING THE COURSE OF A ROUTINE RISK EXAMINATION BY CMECLEARING HOUSE, THE FIRM APPEARED TO BE RECORDING CERTAINFOREIGN CURRENCY WIRES AS PENDING FOR PURPOSES OFCOMPUTING PERFORMANCE BOND EQUITY WITHOUT SUFFICIENT BASISTHAT THE WIRES HAD BEEN INITIATED FOR IMMEDIATE SETTLEMENT.ADDITIONALLY, DURING THE COURSE OF THE EXAMINATION THE FIRM DIDNOT PROVIDE ALL REQUESTED DOCUMENTS IN A TIMELY MANNER. THESECME CLEARING HOUSE RISK COMMITTEE DETERMINED THAT THERE WASA REASONABLE BASIS TO BELIEVE THAT VIOLATIONS OF CBOT RULES930.E (PERFORMANCE BONDS), 930.F (RELEASE OF EXCESSPERFORMANCE BOND), 971.A (SEGREGATION, SECURED AND CLEAREDSWAPS CUSTOMER ACCOUNT REQUIREMENTS), 980.A (REQUIREDRECORDS) AND 980.B (INTERNAL ACCOUNTING CONTROLS) HADOCCURRED.













Resolution:

Other Sanctions Ordered: NONE

Sanction Details: FINE OF $100,000.00

Firm Statement PER THE NOTICE OF FINAL DECISION, THE FIRM'S SETTLEMENT OFFER OFA $100,000 FINE WAS ACCEPTED AND WILL BE AUTO-DEBITED FROM THEFIRM'S CME CLEARING BANK ACCOUNT ON THE 25TH OF THE MONTH.


Settled


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Initiated By: ONECHICAGO, LLC


Docket/Case Number: ONE-2018-82

Allegations: AS PART OF A ROUTINE ANNUAL AUDIT TRAIL REVIEW, CD SENT UBS ANINQUIRY REQUESTING AUDIT TRAIL INFORMATION ON SEVERAL TRADESAND VARIOUS WRITTEN SUPERVISORY PROCEDURES ON NOVEMBER 2,2018. UBS PROVIDED AN INITIAL RESPONSE ON NOVEMBER 30, 2018,SEVERAL REQUESTED ITEMS WERE NOT PROVIDED IN THE INITIALRESPONSE, WHICH WERE RE-REQUESTED BY CD ON DECEMEBER 7, 2018.AFTER SUBSTANTIAL DELAY AND MULTIPLE FOLLOW UP REQUESTS, UBSPROVIDED THREE OF THE REQUESTED ITEMS ON MAY 17, 2019 AND AFOURTH ITEM ON MAY 23, 2019. UBS WAS UNABLE TO PROVIDE ONE OFTHE REQUESTED DOCUMENTS.

UPON INVESTIGATING THE ACTIVITY, CD DETERMINED THAT THERE WAS AREASONABLE BASIS TO BELIEVE THAT A VIOLATION WITHIN THEEXCHANGE'S JURISDICTION HAD OCCURRED. AS A RESULT, ON JUNE 2,2019, CD ISSUED A NOTICE OF CHARGES TO UBS CHARGING A VIOLATIONOF RULES 403(C) (ORDER ENTRY), AND 502 (INSPECTION AND DELIVERY).














Resolution:

Other Sanctions Ordered: NONE.

Sanction Details: $7,500.00 FINE.

Firm Statement PER THE ORDER APPROVING SETTLEMENT OFFER, RESPONDENT SHALLPAY A MONETARY PENALTY IN THE AMOUNT OF SEVEN THOUSAND FIVEHUNDRED U.S. DOLLARS ($7,500) TO THE EXCHANGE WITHIN 30 DAYS OFTHE DATE THAT IT BECOMES PAYABLE.


Order


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Initiated By: CBOE FUTURES EXCHANGE, LLC





Docket/Case Number: CFE 18-0007



Allegations: ON VARIOUS DATES THROUGHOUT 2017, UBS MADE ERRONEOUSADJUSTMENTS TO OI CAUSING OVERALL EXCHANGE OPEN INTEREST INTHE EXPIRING VX CONTRACT TO BE INACCURATELY REPORTED.


Resolution: Decision77©2022 FINRA. All rights reserved. Report about UBS SECURITIES LLC






Resolution:




Decision


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Docket/Case Number: 19-0006/ 20160485982



Allegations: UBS SECURITIES LLC: (I) ON FIVE SETTLEMENT DATES, ENTEREDSTRATEGY ORDERS FOR PARTICIPATION IN THE SOQ AFTER THE 8:15 A.M.CUT-OFF TIME; (II) ENTERED A SELL-SIDE STRATEGY ORDER PRIOR TOTHE 8:15 A.M. CUT-OFF TIME FOR PARTICIPATION IN THE SOQ ANDSUBSEQUENTLY CANCELLED THAT ORDER AFTER THE 8:15 A.M. CUT-OFFTIME; (III) ENTERED SELL-SIDE STRATEGY ORDERS PRIOR TO THE 8:15A.M. CUT-OFF FOR PARTICIPATION IN THE SOQ, AND SUBSEQUENTLYCHANGED THESE STRATEGY ORDERS AFTER THE 8:15 A.M. CUT-OFF TIMETHROUGH ITS ENTRY OF SELL ORDERS; AND (IV) FAILED TO ESTABLISHAND MAINTAIN WRITTEN SUPERVISORY PROCEDURES TO ASSURECOMPLIANCE WITH EXCHANGE RULE 6.2B. VIOLATION OF EXCHANGERULES 4.24 AND 6.2B. UBS WAS CENSURED AND FINED $135,000.



Resolution:

Other Sanctions Ordered: UBS WAS CENSURED AND FINED $135,000.


Consent






Other Sanctions Ordered: UBS WAS CENSURED AND FINED $135,000.

Sanction Details: UBS WAS CENSURED AND FINED $135,000.






CENSURE


Docket/Case Number: 19-0006 (STAR NO. 20160485982)

Principal Product Type: Index Option(s)


Allegations: FROM ON OR ABOUT SEPTEMBER 16, 2015 THROUGH JANUARY 20, 2016,THE FIRM ENTERED A NUMBER OF STRATEGY ORDERS FORPARTICIPATION IN THE SPECIAL OPENING QUOTATION ("SOQ") AFTER THE8:15 A.M. CUT-OFF TIME. ON OR ABOUT SEPTEMBER 16, 2015, THE FIRMENTERED A SELL-SIDE STRATEGY ORDER PRIOR TO THE 8:15 A.M. CUT-OFF TIME FOR PARTICIPATION IN THE SOQ AND SUBSEQUENTLYCANCELLED THAT ORDER AFTER THE 8:15 A.M. CUT-OFF TIME. ON ORABOUT MARCH 16, 2016, THE FIRM ENTERED SELL-SIDE STRATEGYORDERS PRIOR TO THE 8:15 A.M. CUT-OFF FOR PARTICIPATION IN THESOQ, AND SUBSEQUENTLY CHANGED THESE STRATEGY ORDERS AFTERTHE 8:15 A.M. CUT-OFF TIME THROUGH ITS ENTRY OF SELL ORDERS.FROM ON OR ABOUT SEPTEMBER 16, 2015 THROUGH ON OR ABOUTMARCH 16, 2016, UBS FAILED TO ESTABLISH AND MAINTAIN WRITTENSUPERVISORY PROCEDURES TO ASSURE COMPLIANCE WITH EXCHANGERULE 6.2B.



Resolution:


Sanction Details: A $135.000 FINE AND A CENSURE.


Decision







i









Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, UBS SECURITIES LLC(THE "FIRM", "UBS" OR "RESPONDENT") CONSENTED TO THE SANCTIONSAND TO THE ENTRY OF FINDINGS THAT THE FIRM MANUALLY HANDLEDTHOUSANDS OF OPTIONS ORDERS THAT IT RECEIVED FROMINSTITUTIONAL CUSTOMERS AND FAILED TO PROVIDE FOR AREASONABLE SUPERVISORY SYSTEM TO ACHIEVE COMPLIANCE WITH ITSBEST EXECUTION OBLIGATIONS WHEN MANUALLY EXECUTING AND/ORFACILITATING OPTIONS ORDERS. UBS ALSO FAILED TO ESTABLISH,MAINTAIN, AND ENFORCE WRITTEN SUPERVISORY PROCEDURES ("WSPS")THAT WERE REASONABLY DESIGNED TO PREVENT AND DETECTVIOLATIONS OF ITS BEST EXECUTION OBLIGATIONS. THE FINDINGSSTATED THAT THE FIRM HAD IN PLACE THREE SETS OF PROCEDURESTHAT DESCRIBED ITS OBLIGATIONS TO SEEK BEST EXECUTION FOR ITSCUSTOMERS' EQUITIES AND OPTIONS ORDERS. THESE PROCEDURESESTABLISHED BEST EXECUTION REVIEWS OF ORDERS THAT THE FIRMROUTED THROUGH ITS SMART ORDER ROUTERS. HOWEVER, THE FIRM'SSUPERVISORY SYSTEM, INCLUDING ITS WSPS, DID NOT ESTABLISH AREVIEW OF OPTIONS ORDERS THAT WERE MANUALLY HANDLED ANDEXECUTED BY THE FIRM'S TRADERS. AS A RESULT, RESPONDENT'S WPSSAND ITS SUPERVISORY SYSTEM FOR REVIEWING MANUALLY EXECUTEDAND/OR FACILITATED OPTIONS ORDERS WERE NOT REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH THE APPLICABLE RULE.



Resolution:


No










No







CENSURE





Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, UBS SECURITIES LLC(THE "FIRM") CONSENTED TO THE SANCTIONS AND TO THE ENTRY OFFINDINGS THAT BETWEEN OCTOBER 2015 AND DECEMBER 2018 (THE "REVIEW PERIOD"), THE FIRM'S WRITTEN SUPERVISORY PROCEDURESAND ITS SUPERVISORY SYSTEM FOR REVIEWING MANUALLY EXECUTEDAND/OR FACILITIATED OPTIONS ORDERS WERE NOT REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH PHLX RULE 764.



Resolution:












i


Initiated By: FINRA




Principal Product Type: Penny Stock(s)


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT DID NOTESTABLISH AND IMPLEMENT ANTI-MONEY LAUNDERING (AML) PROGRAMSREASONABLY DESIGNED TO DETECT AND CAUSE THE REPORTING OFPOTENTIALLY SUSPICIOUS ACTIVITY IN CONNECTION WITH LOW-PRICEDEQUITY SECURITIES (PENNY STOCK) TRANSACTIONS THROUGH ANOMNIBUS ACCOUNT FOR CUSTOMER TRADES ROUTED TO THE FIRM FOREXECUTION. THE FINDINGS STATED THAT THE FIRM FACILITATED THEPURCHASE OR SALE OF OVER 30 BILLION LOW-PRICED SHARES VALUEDAT OVER $545 MILLION FOR UNDISCLOSED CUSTOMERS THROUGH THEOMNIBUS ACCOUNT. FOR THESE TRANSACTIONS, THE FIRM FAILED TOCOLLECT BASIC INFORMATION SUCH AS THE IDENTITY OF THE STOCK'SBENEFICIAL OWNER, THE BENEFICIAL OWNER'S RELATIONSHIP WITH THEISSUER, OR HOW THE SELLER OBTAINED THE STOCK. THE FIRM DID NOTHAVE A SYSTEM REASONABLY DESIGNED TO DETECT AND CAUSE THEREPORTING OF SUSPICIOUS MICROCAP ACTIVITY IN THE OMNIBUSACCOUNT, SUCH AS THE ILLEGAL DISTRIBUTION OF UNREGISTEREDSECURITIES OR OTHER FRAUDULENT ACTIVITY. AT TIMES, THE FIRMFACILITATED PENNY STOCK TRANSACTIONS THROUGH THE OMNIBUSACCOUNT THAT INCLUDED THE PURCHASE OR SALE OF PENNY STOCKSWHEN SOME OF THE SECURITIES APPEARED TO HAVE BEEN SUBJECT TO "PUMP AND DUMP" SCHEMES OR OTHER FORMS OF POTENTIALMANIPULATION OR FRAUD. THE FIRM DID NOT REASONABLY REVIEWTRANSACTIONS IN THESE SECURITIES FOR SUSPICIOUS ACTIVITY. THEFINDINGS ALSO STATED THE FIRM DID NOT CONDUCT REQUIREDPERIODIC RISK-BASED DUE DILIGENCE REVIEWS OF CORRESPONDENTACCOUNTS FOR CERTAIN FOREIGN FINANCIAL INSTITUTIONS (FFIS)REASONABLY DESIGNED TO DETECT AND REPORT KNOWN ORSUSPECTED MONEY-LAUNDERING ACTIVITY.






https://www.finra.org/rules-guidance/oversight-enforcement/finra-disciplinary-actions?search=2012034427001





Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $500,000. FINES PAID IN FULL ONDECEMBER 24, 2018.


No




Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT DID NOTESTABLISH AND IMPLEMENT ANTI-MONEY LAUNDERING (AML) PROGRAMSREASONABLY DESIGNED TO DETECT AND CAUSE THE REPORTING OFPOTENTIALLY SUSPICIOUS ACTIVITY IN CONNECTION WITH LOW-PRICEDEQUITY SECURITIES (PENNY STOCK) TRANSACTIONS THROUGH ANOMNIBUS ACCOUNT FOR CUSTOMER TRADES ROUTED TO THE FIRM FOREXECUTION. THE FINDINGS STATED THAT THE FIRM FACILITATED THEPURCHASE OR SALE OF OVER 30 BILLION LOW-PRICED SHARES VALUEDAT OVER $545 MILLION FOR UNDISCLOSED CUSTOMERS THROUGH THEOMNIBUS ACCOUNT. FOR THESE TRANSACTIONS, THE FIRM FAILED TOCOLLECT BASIC INFORMATION SUCH AS THE IDENTITY OF THE STOCK'SBENEFICIAL OWNER, THE BENEFICIAL OWNER'S RELATIONSHIP WITH THEISSUER, OR HOW THE SELLER OBTAINED THE STOCK. THE FIRM DID NOTHAVE A SYSTEM REASONABLY DESIGNED TO DETECT AND CAUSE THEREPORTING OF SUSPICIOUS MICROCAP ACTIVITY IN THE OMNIBUSACCOUNT, SUCH AS THE ILLEGAL DISTRIBUTION OF UNREGISTEREDSECURITIES OR OTHER FRAUDULENT ACTIVITY. AT TIMES, THE FIRMFACILITATED PENNY STOCK TRANSACTIONS THROUGH THE OMNIBUSACCOUNT THAT INCLUDED THE PURCHASE OR SALE OF PENNY STOCKSWHEN SOME OF THE SECURITIES APPEARED TO HAVE BEEN SUBJECT TO "PUMP AND DUMP" SCHEMES OR OTHER FORMS OF POTENTIALMANIPULATION OR FRAUD. THE FIRM DID NOT REASONABLY REVIEWTRANSACTIONS IN THESE SECURITIES FOR SUSPICIOUS ACTIVITY. THEFINDINGS ALSO STATED THE FIRM DID NOT CONDUCT REQUIREDPERIODIC RISK-BASED DUE DILIGENCE REVIEWS OF CORRESPONDENTACCOUNTS FOR CERTAIN FOREIGN FINANCIAL INSTITUTIONS (FFIS)REASONABLY DESIGNED TO DETECT AND REPORT KNOWN ORSUSPECTED MONEY-LAUNDERING ACTIVITY.







Initiated By: FINRA





Principal Product Type: Penny Stock(s)


WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT DID NOTESTABLISH AND IMPLEMENT ANTI-MONEY LAUNDERING (AML) PROGRAMSREASONABLY DESIGNED TO DETECT AND CAUSE THE REPORTING OFPOTENTIALLY SUSPICIOUS ACTIVITY IN CONNECTION WITH LOW-PRICEDEQUITY SECURITIES (PENNY STOCK) TRANSACTIONS THROUGH ANOMNIBUS ACCOUNT FOR CUSTOMER TRADES ROUTED TO THE FIRM FOREXECUTION. THE FINDINGS STATED THAT THE FIRM FACILITATED THEPURCHASE OR SALE OF OVER 30 BILLION LOW-PRICED SHARES VALUEDAT OVER $545 MILLION FOR UNDISCLOSED CUSTOMERS THROUGH THEOMNIBUS ACCOUNT. FOR THESE TRANSACTIONS, THE FIRM FAILED TOCOLLECT BASIC INFORMATION SUCH AS THE IDENTITY OF THE STOCK'SBENEFICIAL OWNER, THE BENEFICIAL OWNER'S RELATIONSHIP WITH THEISSUER, OR HOW THE SELLER OBTAINED THE STOCK. THE FIRM DID NOTHAVE A SYSTEM REASONABLY DESIGNED TO DETECT AND CAUSE THEREPORTING OF SUSPICIOUS MICROCAP ACTIVITY IN THE OMNIBUSACCOUNT, SUCH AS THE ILLEGAL DISTRIBUTION OF UNREGISTEREDSECURITIES OR OTHER FRAUDULENT ACTIVITY. AT TIMES, THE FIRMFACILITATED PENNY STOCK TRANSACTIONS THROUGH THE OMNIBUSACCOUNT THAT INCLUDED THE PURCHASE OR SALE OF PENNY STOCKSWHEN SOME OF THE SECURITIES APPEARED TO HAVE BEEN SUBJECT TO "PUMP AND DUMP" SCHEMES OR OTHER FORMS OF POTENTIALMANIPULATION OR FRAUD. THE FIRM DID NOT REASONABLY REVIEWTRANSACTIONS IN THESE SECURITIES FOR SUSPICIOUS ACTIVITY. THEFINDINGS ALSO STATED THE FIRM DID NOT CONDUCT REQUIREDPERIODIC RISK-BASED DUE DILIGENCE REVIEWS OF CORRESPONDENTACCOUNTS FOR CERTAIN FOREIGN FINANCIAL INSTITUTIONS (FFIS)REASONABLY DESIGNED TO DETECT AND REPORT KNOWN ORSUSPECTED MONEY-LAUNDERING ACTIVITY.


Resolution:






i


Allegations: THE FIRM: (I) TENDERED SHARES FOR THE PARTIAL TENDER OFFER INSEASPAN CORPORATION IN EXCESS OF ITS NET LONG POSITION; (II)TENDERED SHARES FOR THE PARTIAL TENDER OFFER IN NABIPHARMACEUTICALS IN EXCESS OF ITS NET LONG POSITION; (III)TENDERED SHARES FOR THE PARTIAL TENDER OFFER IN HEALTHSOUTHCORP. IN EXCESS OF ITS NET LONG POSITION; (IV) TENDERED SHARESFOR THE PARTIAL TENDER OFFER IN ELIZABETH ARDEN, INC. IN EXCESSOF ITS NET LONG POSITION; (V) TENDERED SHARES FOR THE PARTIALTENDER OFFER IN GENERAL ELECTRIC COMPANY IN EXCESS OF ITS NETLONG POSITION; (VI) TENDERED SHARES FOR THE PARTIAL TENDEROFFER IN YAHOO, INC. IN EXCESS OF ITS NET LONG POSITION; (VII)FAILED TO ESTABLISH, MAINTAIN AND ENFORCE WRITTEN SUPERVISORYPROCEDURES TO ASSURE COMPLIANCE WITH RULE 14E-4,PROMULGATED UNDER THE EXCHANGE ACT.; AND (VIII) FAILED TOADEQUATELY ENFORCE ITS WRITTEN SUPERVISORY PROCEDURES TOASSURE COMPLIANCE WITH RULE 14E-4, PROMULGATED UNDER THEEXCHANGE ACT. VIOLATIONS OF EXCHANGE RULES 4.2, 4.13 AND 4.24.













Docket/Case Number: 17-0059/ 20150453500, 20170558985 AND 20170559013



THE FIRM: (I) TENDERED SHARES FOR THE PARTIAL TENDER OFFER INSEASPAN CORPORATION IN EXCESS OF ITS NET LONG POSITION; (II)TENDERED SHARES FOR THE PARTIAL TENDER OFFER IN NABIPHARMACEUTICALS IN EXCESS OF ITS NET LONG POSITION; (III)TENDERED SHARES FOR THE PARTIAL TENDER OFFER IN HEALTHSOUTHCORP. IN EXCESS OF ITS NET LONG POSITION; (IV) TENDERED SHARESFOR THE PARTIAL TENDER OFFER IN ELIZABETH ARDEN, INC. IN EXCESSOF ITS NET LONG POSITION; (V) TENDERED SHARES FOR THE PARTIALTENDER OFFER IN GENERAL ELECTRIC COMPANY IN EXCESS OF ITS NETLONG POSITION; (VI) TENDERED SHARES FOR THE PARTIAL TENDEROFFER IN YAHOO, INC. IN EXCESS OF ITS NET LONG POSITION; (VII)FAILED TO ESTABLISH, MAINTAIN AND ENFORCE WRITTEN SUPERVISORYPROCEDURES TO ASSURE COMPLIANCE WITH RULE 14E-4,PROMULGATED UNDER THE EXCHANGE ACT.; AND (VIII) FAILED TOADEQUATELY ENFORCE ITS WRITTEN SUPERVISORY PROCEDURES TOASSURE COMPLIANCE WITH RULE 14E-4, PROMULGATED UNDER THEEXCHANGE ACT. VIOLATIONS OF EXCHANGE RULES 4.2, 4.13 AND 4.24.


Resolution:

Other Sanctions Ordered: A $100,000 FINE, A CENSURE AND $134,850 DISGORGEMENT.

Sanction Details: A $100,000 FINE, A CENSURE AND $134,850 DISGORGEMENT.

Sanctions Ordered: CensureMonetary/Fine $100,000.00Disgorgement/Restitution

Consent


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, UBS SECURITIES LLC("UBS" OR THE "FIRM"), A CHICAGO BOARD OPTIONS EXCHANGE ("CBOE")TPH ORGANIZATION, CONSENTED TO THE SANCTIONS AND ENTRY OFFINDINGS DESCRIBED BELOW. IN THIS MATTER, THE FIRM WASCENSURED, FINED $100,000, AND DISGORGED $134,850 FOR THEFOLLOWING CONDUCT: (1) ON SIX OCCASIONS FROM JANUARY 11, 2012TO JUNE 16, 2017, THE FIRM TENDERED SHARES FOR THE PARTIALTENDER OFFER IN CERTAIN STOCKS IN EXCESS OF ITS NET LONGPOSITION; (2) FROM DECEMBER 13, 2011 THROUGH APRIL 7, 2014, THEFIRM FAILED TO ESTABLISH AND MAINTAIN WRITTEN SUPERVISORYPROCEDURES REASONABLY DESIGNED TO PREVENT AND DETECTVIOLATIONS OF RULE 14E-4; AND (3) DURING THE PERIODS OF (I) AUGUST27, 2014 THROUGH OCTOBER 1, 2014, (II) OCTOBER 19, 2015 THROUGHNOVEMBER 16, 2015, AND (III) MAY 16, 2017 THROUGH JUNE 16, 2017, THEFIRM FAILED TO ADEQUATELY ENFORCE ITS WRITTEN SUPERVISORYPROCEDURES TO ASSURE COMPLIANCE WITH RULE 14E-4.







Initiated By: CHICAGO BOARD OF OPTIONS EXCHANGE




DISGORGEMENT




Other Product Type(s): PARTIAL TENDER OFFERS

WITHOUT ADMITTING OR DENYING THE FINDINGS, UBS SECURITIES LLC("UBS" OR THE "FIRM"), A CHICAGO BOARD OPTIONS EXCHANGE ("CBOE")TPH ORGANIZATION, CONSENTED TO THE SANCTIONS AND ENTRY OFFINDINGS DESCRIBED BELOW. IN THIS MATTER, THE FIRM WASCENSURED, FINED $100,000, AND DISGORGED $134,850 FOR THEFOLLOWING CONDUCT: (1) ON SIX OCCASIONS FROM JANUARY 11, 2012TO JUNE 16, 2017, THE FIRM TENDERED SHARES FOR THE PARTIALTENDER OFFER IN CERTAIN STOCKS IN EXCESS OF ITS NET LONGPOSITION; (2) FROM DECEMBER 13, 2011 THROUGH APRIL 7, 2014, THEFIRM FAILED TO ESTABLISH AND MAINTAIN WRITTEN SUPERVISORYPROCEDURES REASONABLY DESIGNED TO PREVENT AND DETECTVIOLATIONS OF RULE 14E-4; AND (3) DURING THE PERIODS OF (I) AUGUST27, 2014 THROUGH OCTOBER 1, 2014, (II) OCTOBER 19, 2015 THROUGHNOVEMBER 16, 2015, AND (III) MAY 16, 2017 THROUGH JUNE 16, 2017, THEFIRM FAILED TO ADEQUATELY ENFORCE ITS WRITTEN SUPERVISORYPROCEDURES TO ASSURE COMPLIANCE WITH RULE 14E-4.


Resolution:

Other Sanctions Ordered: A DISGORGEMENT OF $134,850.00

Sanction Details: FINE OF $100,000.00 AND DISGORGEMENT OF $134,850.00

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS, UBS SECURITIES LLC("UBS" OR THE "FIRM"), A CHICAGO BOARD OPTIONS EXCHANGE ("CBOE")TPH ORGANIZATION, CONSENTED TO THE SANCTIONS AND ENTRY OFFINDINGS DESCRIBED BELOW. IN THIS MATTER, THE FIRM WASCENSURED, FINED $100,000, AND DISGORGED $134,850 FOR THEFOLLOWING CONDUCT: (1) ON SIX OCCASIONS FROM JANUARY 11, 2012TO JUNE 16, 2017, THE FIRM TENDERED SHARES FOR THE PARTIALTENDER OFFER IN CERTAIN STOCKS IN EXCESS OF ITS NET LONGPOSITION; (2) FROM DECEMBER 13, 2011 THROUGH APRIL 7, 2014, THEFIRM FAILED TO ESTABLISH AND MAINTAIN WRITTEN SUPERVISORYPROCEDURES REASONABLY DESIGNED TO PREVENT AND DETECTVIOLATIONS OF RULE 14E-4; AND (3) DURING THE PERIODS OF (I) AUGUST27, 2014 THROUGH OCTOBER 1, 2014, (II) OCTOBER 19, 2015 THROUGHNOVEMBER 16, 2015, AND (III) MAY 16, 2017 THROUGH JUNE 16, 2017, THEFIRM FAILED TO ADEQUATELY ENFORCE ITS WRITTEN SUPERVISORYPROCEDURES TO ASSURE COMPLIANCE WITH RULE 14E-4.


Decision






WITHOUT ADMITTING OR DENYING THE FINDINGS, UBS SECURITIES LLC("UBS" OR THE "FIRM"), A CHICAGO BOARD OPTIONS EXCHANGE ("CBOE")TPH ORGANIZATION, CONSENTED TO THE SANCTIONS AND ENTRY OFFINDINGS DESCRIBED BELOW. IN THIS MATTER, THE FIRM WASCENSURED, FINED $100,000, AND DISGORGED $134,850 FOR THEFOLLOWING CONDUCT: (1) ON SIX OCCASIONS FROM JANUARY 11, 2012TO JUNE 16, 2017, THE FIRM TENDERED SHARES FOR THE PARTIALTENDER OFFER IN CERTAIN STOCKS IN EXCESS OF ITS NET LONGPOSITION; (2) FROM DECEMBER 13, 2011 THROUGH APRIL 7, 2014, THEFIRM FAILED TO ESTABLISH AND MAINTAIN WRITTEN SUPERVISORYPROCEDURES REASONABLY DESIGNED TO PREVENT AND DETECTVIOLATIONS OF RULE 14E-4; AND (3) DURING THE PERIODS OF (I) AUGUST27, 2014 THROUGH OCTOBER 1, 2014, (II) OCTOBER 19, 2015 THROUGHNOVEMBER 16, 2015, AND (III) MAY 16, 2017 THROUGH JUNE 16, 2017, THEFIRM FAILED TO ADEQUATELY ENFORCE ITS WRITTEN SUPERVISORYPROCEDURES TO ASSURE COMPLIANCE WITH RULE 14E-4.


i


Initiated By: ONECHICAGO, LLC







Other Product Type(s): SPREAD TRADES

Allegations: ONECHICAGO ALLEGED THAT THE FIRM VIOLATED EXCHANGE RULE 611(B)ON 13 OCCASIONS BETWEEN DECEMBER 2014 AND JUNE 2016 BYPLACING PRINCIPAL ORDERS ON THE ONECHICAGO SYSTEM PRIOR TOENTERING A CUSTOMER ORDER THAT THE FIRM HAD IN HAND AT THETIME. A VIOLATION OF RULE 502 WAS ALSO ALLEGED BASED UPON THEFIRM'S INABILITY TO PROVIDE CERTAIN COMMUNICATIONS RECORDSRELATED TO SEVERAL OF THE TRADES.



Resolution:


Sanction Details: FINE OF $35,000, PAYMENT DUE BY MAY 11, 2018.

Firm Statement FINE OF $35,000, PAYMENT DUE BY MAY 11, 2018.


Settled


i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT FORSETTLEMENT DATES OCTOBER 15, 2014 AND DECEMBER 31, 2014, DUE TOA SYSTEM ISSUE, THE FIRM REPORTED 1,580 SHORT INTERESTPOSITIONS TOTALING 262,260,266 SHARES, WHEN THE TOTAL SHARESFOR THOSE 1,580 SHORT INTEREST POSITIONS WAS 270,763,348 SHARES,AND FAILED TO REPORT FIVE SHORT INTEREST POSITIONS TOTALING16,344 SHARES.







Initiated By: FINRA







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT FORSETTLEMENT DATES OCTOBER 15, 2014 AND DECEMBER 31, 2014, DUE TOA SYSTEM ISSUE, THE FIRM REPORTED 1,580 SHORT INTERESTPOSITIONS TOTALING 262,260,266 SHARES, WHEN THE TOTAL SHARESFOR THOSE 1,580 SHORT INTEREST POSITIONS WAS 270,763,348 SHARES,AND FAILED TO REPORT FIVE SHORT INTEREST POSITIONS TOTALING16,344 SHARES.


Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $7,500. FINES PAID IN FULL ONAPRIL 10, 2018.


No




Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRMCONSENTED TO THE SANCTIONS AND TO THE ENTRY OFFINDINGS THAT FOR SETTLEMENT DATES OCTOBER 15,2014 AND DECEMBER 31, 2014, DUE TO A SYSTEM ISSUE,THE FIRM UNDER-REPORTED THE VOLUME OF SHARES ASSOCIATED WITH1580 SHORT INTEREST POSITIONS AND FAILED TO REPORT ANADDITIONAL FIVE SHORT INTEREST POSITIONS.








Initiated By: FINRA







WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRMCONSENTED TO THE SANCTIONS AND TO THE ENTRY OFFINDINGS THAT FOR SETTLEMENT DATES OCTOBER 15,2014 AND DECEMBER 31, 2014, DUE TO A SYSTEM ISSUE,THE FIRM UNDER-REPORTED THE VOLUME OF SHARES ASSOCIATED WITH1580 SHORT INTEREST POSITIONS AND FAILED TO REPORT ANADDITIONAL FIVE SHORT INTEREST POSITIONS.


Resolution:






i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THE FIRMFAILED TO REPORT TO TRACE CORPORATE DEBT TRANSACTIONS INTRACE-ELIGIBLE SECURITIES WITHIN THE TIME REQUIRED BY FINRA RULE6730(A). THE FINDINGS STATED THAT THE FIRM FAILED TO REPORT TOTRACE THE CORRECT TIME OF TRADE EXECUTION FOR 39TRANSACTIONS IN TRACE-ELIGIBLE AGENCY DEBT SECURITIES ANDFAILED TO REPORT 18 OF THOSE TRANSACTIONS TO TRACE WITHIN THETIME REQUIRED BY FINRA RULE 6730(A). THE FINDINGS ALSO STATEDTHAT THE FIRM FAILED TO SHOW THE CORRECT TIME OF EXECUTION ONTHE MEMORANDUM OF BROKERAGE ORDERS. THE FINDINGS ALSOINCLUDED THAT THE FIRM FAILED TO PROVIDE DOCUMENTARY EVIDENCE,DURING AN AGENCY DEBT SECURITIES REVIEW PERIOD, THAT ITPERFORMED THE SUPERVISORY REVIEWS SET FORTH IN ITS WRITTENSUPERVISORY PROCEDURES (WSPS) CONCERNING TRACE REPORTINGACCURACIES INVOLVING EXECUTION TIME.








Initiated By: FINRA





Principal Product Type: Debt - Corporate

Other Product Type(s): AGENCY DEBT SECURITIES

WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THE FIRMFAILED TO REPORT TO TRACE CORPORATE DEBT TRANSACTIONS INTRACE-ELIGIBLE SECURITIES WITHIN THE TIME REQUIRED BY FINRA RULE6730(A). THE FINDINGS STATED THAT THE FIRM FAILED TO REPORT TOTRACE THE CORRECT TIME OF TRADE EXECUTION FOR 39TRANSACTIONS IN TRACE-ELIGIBLE AGENCY DEBT SECURITIES ANDFAILED TO REPORT 18 OF THOSE TRANSACTIONS TO TRACE WITHIN THETIME REQUIRED BY FINRA RULE 6730(A). THE FINDINGS ALSO STATEDTHAT THE FIRM FAILED TO SHOW THE CORRECT TIME OF EXECUTION ONTHE MEMORANDUM OF BROKERAGE ORDERS. THE FINDINGS ALSOINCLUDED THAT THE FIRM FAILED TO PROVIDE DOCUMENTARY EVIDENCE,DURING AN AGENCY DEBT SECURITIES REVIEW PERIOD, THAT ITPERFORMED THE SUPERVISORY REVIEWS SET FORTH IN ITS WRITTENSUPERVISORY PROCEDURES (WSPS) CONCERNING TRACE REPORTINGACCURACIES INVOLVING EXECUTION TIME.


Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $55,000. FINES PAID IN FULL ONJANUARY 16, 2018.


No




Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF THE FINDINGS THAT IT FAILEDTO REPORT 6,844 CORPORATE DEBT TRANSACTIONS TO TRACE WITHINTHE TIME REQUIRED BY FINRA RULE 6730(A) BETWEEN 11/1/2015 AND8/31/2016. THE FINDINGS ALSO STATED THAT IN 2Q 2016, THE FIRM FAILEDTO REPORT TO TRACE THE CORRECT TIME OF EXECUTION FOR 39TRANSACTIONS AGENCY DEBT SECURITIES AND FAILED TO REPORT 18 OFTHOSE TRANSACTIONS WITHIN THE TIME REQUIRED BY FINRA RULE6730(A). FOR THOSE 39 TRANSCATIONS, THE FIRM'S BOOKS ANDRECORDS FAILED TO SHOW THE CORRECT TIME OF EXECUTION ON THEMEMORANDUM OF BROKERAGE ORDERS AND THE FIRM WAS NOT ABLETO PROVIDE EVIDENCE THAT IT PERFORMED THE RELEVANT REVIEW SETFORTH IN ITS WRITTEN SUPERVISORY PROCEDURES.








Initiated By: FINRA






Other Product Type(s): AGENCY DEBT SECURITIES

WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF THE FINDINGS THAT IT FAILEDTO REPORT 6,844 CORPORATE DEBT TRANSACTIONS TO TRACE WITHINTHE TIME REQUIRED BY FINRA RULE 6730(A) BETWEEN 11/1/2015 AND8/31/2016. THE FINDINGS ALSO STATED THAT IN 2Q 2016, THE FIRM FAILEDTO REPORT TO TRACE THE CORRECT TIME OF EXECUTION FOR 39TRANSACTIONS AGENCY DEBT SECURITIES AND FAILED TO REPORT 18 OFTHOSE TRANSACTIONS WITHIN THE TIME REQUIRED BY FINRA RULE6730(A). FOR THOSE 39 TRANSCATIONS, THE FIRM'S BOOKS ANDRECORDS FAILED TO SHOW THE CORRECT TIME OF EXECUTION ON THEMEMORANDUM OF BROKERAGE ORDERS AND THE FIRM WAS NOT ABLETO PROVIDE EVIDENCE THAT IT PERFORMED THE RELEVANT REVIEW SETFORTH IN ITS WRITTEN SUPERVISORY PROCEDURES.


Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $55,000.00.




i


Allegations: UBS SECURITIES LLC ("UBS"), AN EXCHANGE TPH ORGANIZATION, WASCENSURED, FINED $125,000 AND DISGORGEMENT OF $7,085 FOR THEFOLLOWING CONDUCT. UBS: (I) IN ANTICIPATION OF PARTICIPATING ON ACUSTOMER ORDER FOR WHICH IT WAS SOLICITED TO SELL 5,000 CBSJAN19, 2013 42 CALL OPTION CONTRACTS, PURCHASED APPROXIMATELY3,764 CONTRACTS (OF WHICH APPROXIMATELY 1,119 CONTRACTS WEREBOUGHT ON CBOE) OF MULTIPLE CBS CALL OPTION CONTRACTS PRIORTO ALL TERMS OF THE CUSTOMER ORDER BEING PROPERLY DISCLOSEDTO THE TRADING CROWD; AND (II) FAILED TO ADEQUATELY SUPERVISE TOASSURE COMPLIANCE WITH EXCHANGE RULES, INCLUDING EXCHANGERULE 6.9(E). (EXCHANGE RULES 4.1 - JUST AND EQUITABLE PRINCIPLESOF TRADE, 4.2 - ADHERENCE TO LAW, AND 6.9 - SOLICITEDTRANSACTIONS)








Initiated By: CHICAGO BOARD OPTIONS EXCHANGE





Docket/Case Number: 17-0048/20150451921



UBS SECURITIES LLC ("UBS"), AN EXCHANGE TPH ORGANIZATION, WASCENSURED, FINED $125,000 AND DISGORGEMENT OF $7,085 FOR THEFOLLOWING CONDUCT. UBS: (I) IN ANTICIPATION OF PARTICIPATING ON ACUSTOMER ORDER FOR WHICH IT WAS SOLICITED TO SELL 5,000 CBSJAN19, 2013 42 CALL OPTION CONTRACTS, PURCHASED APPROXIMATELY3,764 CONTRACTS (OF WHICH APPROXIMATELY 1,119 CONTRACTS WEREBOUGHT ON CBOE) OF MULTIPLE CBS CALL OPTION CONTRACTS PRIORTO ALL TERMS OF THE CUSTOMER ORDER BEING PROPERLY DISCLOSEDTO THE TRADING CROWD; AND (II) FAILED TO ADEQUATELY SUPERVISE TOASSURE COMPLIANCE WITH EXCHANGE RULES, INCLUDING EXCHANGERULE 6.9(E). (EXCHANGE RULES 4.1 - JUST AND EQUITABLE PRINCIPLESOF TRADE, 4.2 - ADHERENCE TO LAW, AND 6.9 - SOLICITEDTRANSACTIONS)


Resolution:

Other Sanctions Ordered: A DISGORGEMENT OF $7,085

Sanction Details: A $125,000 FINE AND DISGORGEMENT OF $7,085


Decision & Order of Offer of Settlement





Allegations: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, UBS AGREED TOSUBMIT TO FINDINGS THAT: (I) IN ANTICIPATION OF PARTICIPATING ON ACUSTOMER ORDER FOR WHICH IT WAS SOLICITED TO SELL 5,000 CBSJAN19, 2013 42 CALL OPTION CONTRACTS, SOLD APPROXIMATELY 3,764CONTRACTS (OF WHICH APPROXIMATELY 1,119 CONTRACTS WERE SOLDON CBOE) OF MULTIPLE CBS CALL OPTION CONTRACTS WHILE INPOSSESSION OF NON-PUBLIC INFORMATION AND PRIOR TO ALL TERMS OFTHE CUSTOMER ORDER BEING PROPERLY DISCLOSED TO THE TRADINGCROWD; IN VIOLATION OF EXCHANGE RULES 4.1 AND 6.9; AND (II) FAILEDTO ADEQUATELY SUPERVISE TO ASSURE COMPLIANCE WITH EXCHANGERULES, INCLUDING EXCHANGE RULE 6.9(E), IN VIOLATION OF EXCHANGERULE 4.2.










DISGORGEMENT





Resolution:

Other Sanctions Ordered: $7,085

Sanction Details: FINE OF $125,000 AND DISGORGEMENT OF $7,085.00


Decision


i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT HEDGED ITSANTICIPATED FACILITATION OF A CUSTOMER'S BLOCK ORDER TO SELLCALL OPTIONS AND BUY STOCK OF A CERTAIN COMPANY BEFOREDISCLOSING ALL MATERIAL TERMS AND CONDITIONS OF THE CUSTOMERORDER TO THE TRADING CROWD.

THE FINDINGS STATED THAT SPECIFICALLY, A FORMER FIRM TRADER (THE "FIRM TRADER") SOLD MORE EQUITY THAN NEEDED TO HEDGE THEDISCLOSED PORTION OF AN ORDER, AND THEREBY IMPROPERLY PRE-HEDGED AN IMMINENT, BUT UNDISCLOSED PARTIAL ORDER. WHEN ANAMEX TRADING PERMIT (ATP) HOLDER ENGAGES IN ANTICIPATORYHEDGING OR OTHERWISE USES UNDISCLOSED INFORMATION ABOUT ANIMMINENT OPTION TRANSACTION, TO TRADE THE RELEVANT OPTION OR ARELATED INSTRUMENT, IT CAN DISADVANTAGE MARKET PARTICIPANTSWHO ARE UNAWARE OF THE INFORMATION OR WHO REFRAIN FROMTRADING BASED ON IT. THE FIRM TRADER, BASED ON HIS KNOWLEDGEOF THE TERMS AND CONDITIONS OF A BLOCK ORDER, EFFECTEDTRANSACTIONS AS HEDGES PRIOR TO THE TERMS AND CONDITIONS OFTHE FULL BLOCK ORDER BEING DISCLOSED.














WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT HEDGED ITSANTICIPATED FACILITATION OF A CUSTOMER'S BLOCK ORDER TO SELLCALL OPTIONS AND BUY STOCK OF A CERTAIN COMPANY BEFOREDISCLOSING ALL MATERIAL TERMS AND CONDITIONS OF THE CUSTOMERORDER TO THE TRADING CROWD.

THE FINDINGS STATED THAT SPECIFICALLY, A FORMER FIRM TRADER (THE "FIRM TRADER") SOLD MORE EQUITY THAN NEEDED TO HEDGE THEDISCLOSED PORTION OF AN ORDER, AND THEREBY IMPROPERLY PRE-HEDGED AN IMMINENT, BUT UNDISCLOSED PARTIAL ORDER. WHEN ANAMEX TRADING PERMIT (ATP) HOLDER ENGAGES IN ANTICIPATORYHEDGING OR OTHERWISE USES UNDISCLOSED INFORMATION ABOUT ANIMMINENT OPTION TRANSACTION, TO TRADE THE RELEVANT OPTION OR ARELATED INSTRUMENT, IT CAN DISADVANTAGE MARKET PARTICIPANTSWHO ARE UNAWARE OF THE INFORMATION OR WHO REFRAIN FROMTRADING BASED ON IT. THE FIRM TRADER, BASED ON HIS KNOWLEDGEOF THE TERMS AND CONDITIONS OF A BLOCK ORDER, EFFECTEDTRANSACTIONS AS HEDGES PRIOR TO THE TERMS AND CONDITIONS OFTHE FULL BLOCK ORDER BEING DISCLOSED.


Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $30,000.PURSUANT TO NYSE MKT RULE 9310(A)(1)(B), THIS AWC BECAME FINAL ONJULY 10, 2017, SINCE NO REVIEW WAS REQUESTED BY A DIRECTOR OR AMEMBER OF THE COMMITTEE FOR REVIEW.


No




Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT HEDGED ITSANTICIPATED FACILITATION OF A CUSTOMER'S BLOCK ORDER TO SELLCALL OPTIONS AND BUY STOCK OF A CERTAIN COMPANY BEFOREDISCLOSING ALL MATERIAL TERMS AND CONDITIONS OF THE CUSTOMERORDER TO THE TRADING CROWD. THE FINDINGS STATED THATSPECIFICALLY, A FORMER FIRM TRADER (THE "FIRM TRADER") SOLD MOREEQUITY THAN NEEDED TO HEDGE THE DISCLOSED PORTION OF ANORDER, AND THEREBY IMPROPERLYPRE-HEDGED AN IMMINENT, BUT UNDISCLOSED PARTIAL ORDER.











CENSURE





WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT HEDGED ITSANTICIPATED FACILITATION OF A CUSTOMER'S BLOCK ORDER TO SELLCALL OPTIONS AND BUY STOCK OF A CERTAIN COMPANY BEFOREDISCLOSING ALL MATERIAL TERMS AND CONDITIONS OF THE CUSTOMERORDER TO THE TRADING CROWD. THE FINDINGS STATED THATSPECIFICALLY, A FORMER FIRM TRADER (THE "FIRM TRADER") SOLD MOREEQUITY THAN NEEDED TO HEDGE THE DISCLOSED PORTION OF ANORDER, AND THEREBY IMPROPERLYPRE-HEDGED AN IMMINENT, BUT UNDISCLOSED PARTIAL ORDER.


Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $30,000. PURSUANT TO NYSE MKTRULE 9310(A)(1) (B), THIS AWC BECAME FINAL ON JULY 10, 2017.




i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOACCURATELY RECORD THE TIME OF ORDER RECEIPT AT ITS TAXABLEFIXED INCOME (TFI) DESK AND THE TIME OF EXECUTION FOR MANUALLYHANDLED NON-CONVERTIBLE PREFERRED CUSTOMER ORDERS. THEFINDINGS STATED THAT THE FIRM FAILED TO ACCURATELY REPORT THETIME OF ORDER RECEIPT AT THE TFI DESK AND THE TIME OF EXECUTIONFOR MANUALLY HANDLED NON-CONVERTIBLE PREFERRED ORDERS TOTHE ORDER AUDIT TRAIL SYSTEM (OATS). THE FINDINGS ALSO STATEDTHAT THE FIRM FAILED TO REPORT THE ACCURATE TIME OF EXECUTIONTO EITHER THE FINRA/NASDAQ TRADE REPORTING FACILITY (FNTRF) ORTHE OVER-THE-COUNTER REPORTING FACILITY (OTCRF) FOR MANUALLYHANDLED NON-CONVERTIBLE PREFERRED TRADES. THE FIRMMOREOVER FAILED TO REPORT MANUALLY HANDLED NON-CONVERTIBLEPREFERRED TRANSACTIONS TO THE TRF WITHIN 30 SECONDS OFEXECUTION. THE FINDINGS ALSO INCLUDED THAT THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TOAPPLICABLE SECURITIES LAWS AND REGULATIONS, AND/OR FINRA RULESRELATED TO RECORDKEEPING, OATS REPORTING AND TRADEREPORTING.







Initiated By: FINRA






Other Product Type(s): NON-CONVERTIBLE PREFERRED SECURITIES

WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOACCURATELY RECORD THE TIME OF ORDER RECEIPT AT ITS TAXABLEFIXED INCOME (TFI) DESK AND THE TIME OF EXECUTION FOR MANUALLYHANDLED NON-CONVERTIBLE PREFERRED CUSTOMER ORDERS. THEFINDINGS STATED THAT THE FIRM FAILED TO ACCURATELY REPORT THETIME OF ORDER RECEIPT AT THE TFI DESK AND THE TIME OF EXECUTIONFOR MANUALLY HANDLED NON-CONVERTIBLE PREFERRED ORDERS TOTHE ORDER AUDIT TRAIL SYSTEM (OATS). THE FINDINGS ALSO STATEDTHAT THE FIRM FAILED TO REPORT THE ACCURATE TIME OF EXECUTIONTO EITHER THE FINRA/NASDAQ TRADE REPORTING FACILITY (FNTRF) ORTHE OVER-THE-COUNTER REPORTING FACILITY (OTCRF) FOR MANUALLYHANDLED NON-CONVERTIBLE PREFERRED TRADES. THE FIRMMOREOVER FAILED TO REPORT MANUALLY HANDLED NON-CONVERTIBLEPREFERRED TRANSACTIONS TO THE TRF WITHIN 30 SECONDS OFEXECUTION. THE FINDINGS ALSO INCLUDED THAT THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TOAPPLICABLE SECURITIES LAWS AND REGULATIONS, AND/OR FINRA RULESRELATED TO RECORDKEEPING, OATS REPORTING AND TRADEREPORTING.


Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $50,000. FINE PAID IN FULL ON JUNE2, 2017.


No




Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOACCURATELY RECORD THE TIME OF ORDER RECEIPT AT ITS TAXABLEFIXED INCOME (TFI) DESK AND THE TIME OF EXECUTION FOR MANUALLYHANDLED NON-CONVERTIBLE PREFERRED CUSTOMER ORDERS. THEFINDINGS STATED THAT THE FIRM FAILED TO ACCURATELY REPORT THETIME OF ORDER RECEIPT AT THE TFI DESK AND THE TIME OF EXECUTIONFOR MANUALLY HANDLED NON-CONVERTIBLE PREFERRED ORDERS TOTHE ORDER AUDIT TRAIL SYSTEM (OATS). THE FINDINGS ALSO STATEDTHAT THE FIRM FAILED TO REPORT THE ACCURATE TIME OF EXECUTIONTO EITHER THE FINRA/NASDAQ TRADE REPORTING FACILITY (FNTRF) ORTHE OVER-THE-COUNTER REPORTING FACILITY (OTCRF) FOR MANUALLYHANDLED NON-CONVERTIBLE PREFERRED TRADES. THE FIRMMOREOVER FAILED TO REPORT MANUALLY HANDLED NON-CONVERTIBLEPREFERRED TRANSACTIONS TO THE TRF WITHIN 30 SECONDS OFEXECUTION. THE FINDINGS ALSO INCLUDED THAT THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TOAPPLICABLE SECURITIES LAWS AND REGULATIONS, AND/OR FINRA RULESRELATED TO RECORDKEEPING, OATS REPORTING AND TRADEREPORTING.








Initiated By: FINRA







Other Product Type(s): NON-CONVERTIBLE PREFERRED SECURITIES

WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOACCURATELY RECORD THE TIME OF ORDER RECEIPT AT ITS TAXABLEFIXED INCOME (TFI) DESK AND THE TIME OF EXECUTION FOR MANUALLYHANDLED NON-CONVERTIBLE PREFERRED CUSTOMER ORDERS. THEFINDINGS STATED THAT THE FIRM FAILED TO ACCURATELY REPORT THETIME OF ORDER RECEIPT AT THE TFI DESK AND THE TIME OF EXECUTIONFOR MANUALLY HANDLED NON-CONVERTIBLE PREFERRED ORDERS TOTHE ORDER AUDIT TRAIL SYSTEM (OATS). THE FINDINGS ALSO STATEDTHAT THE FIRM FAILED TO REPORT THE ACCURATE TIME OF EXECUTIONTO EITHER THE FINRA/NASDAQ TRADE REPORTING FACILITY (FNTRF) ORTHE OVER-THE-COUNTER REPORTING FACILITY (OTCRF) FOR MANUALLYHANDLED NON-CONVERTIBLE PREFERRED TRADES. THE FIRMMOREOVER FAILED TO REPORT MANUALLY HANDLED NON-CONVERTIBLEPREFERRED TRANSACTIONS TO THE TRF WITHIN 30 SECONDS OFEXECUTION. THE FINDINGS ALSO INCLUDED THAT THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TOAPPLICABLE SECURITIES LAWS AND REGULATIONS, AND/OR FINRA RULESRELATED TO RECORDKEEPING, OATS REPORTING AND TRADEREPORTING.


Resolution:






i


Allegations: UBS SECURITIES LLC, AN EXCHANGE TPH ORGANIZATION WASCENSURED AND FINED BY CBOE AND THE OTHER OPTION EXCHANGESIDENTIFIED BELOW IN THE AMOUNT OF $37,500, OF WHICH $12,500 SHALLBE PAID TO CBOE FOR FAILING TO CREATE AND MAINTAIN ACCURATEBOOKS AND RECORDS AS PRESCRIBED BY RULE 17A-3 AND,ACCORDINGLY, AS REQUIRED BY EXCHANGE RULE 15.1. (EXCHANGERULES 4.2 - ADHERENCE TO LAW AND 15.1 - MAINTENANCE, RETENTIONAND FURNISHING OF BOOKS, RECORDS AND OTHER INFORMATION;SECTION 17(A) OF THE EXCHANGE ACT AND RULE 17A-3 - RECORDS TO BEMADE BY CERTAIN EXCHANGE MEMBERS, BROKERS AND DEALERS)













Docket/Case Number: 17-0014/ 20150443191-02



Allegations: UBS SECURITIES LLC, AN EXCHANGE TPH ORGANIZATION WASCENSURED AND FINED BY CBOE AND THE OTHER OPTION EXCHANGESIDENTIFIED BELOW IN THE AMOUNT OF $37,500, OF WHICH $12,500 SHALLBE PAID TO CBOE FOR FAILING TO CREATE AND MAINTAIN ACCURATEBOOKS AND RECORDS AS PRESCRIBED BY RULE 17A-3 AND,ACCORDINGLY, AS REQUIRED BY EXCHANGE RULE 15.1. (EXCHANGERULES 4.2 - ADHERENCE TO LAW AND 15.1 - MAINTENANCE, RETENTIONAND FURNISHING OF BOOKS, RECORDS AND OTHER INFORMATION;SECTION 17(A) OF THE EXCHANGE ACT AND RULE 17A-3 - RECORDS TO BEMADE BY CERTAIN EXCHANGE MEMBERS, BROKERS AND DEALERS)


Resolution:


Sanction Details: UBS SECURITIES LLC, WAS CENSURED AND FINED BY CBOE, PHLX ANDNYSE MKT IN THE AMOUNT OF $37,500, OF WHICH $12,500 SHALL BE PAIDTO CBOE.


Consent


Allegations: CHICAGO BOARD OPTIONS EXCHANGE ALLEGED THAT THE FIRM FAILEDTO SHOW THE CORRECT TIME OF ENTRY ON THE MEMORANDUM OF 20BROKERAGE ORDERS ROUTED TO FLOOR BROKERS ON THE CBOE (THEEXCHANGE), AND ALSO FAILED TO SHOW THE CORRECT TIME THE ORDERWAS RECEIVED ON THE MEMORANDUM FOR 12 OF THE ABOVEBROKERAGE ORDERS, AS WELL AS ANOTHER BROKERAGE ORDERROUTED TO THE EXCHANGE. AS A RESULT, CBOE ALLEGED THAT THE FIRMVIOLATED SECURITIES EXCHANGE ACT OF 1934 RULE 17A-3(A)(6)(I).







Initiated By: CBOE




CENSURE





CHICAGO BOARD OPTIONS EXCHANGE ALLEGED THAT THE FIRM FAILEDTO SHOW THE CORRECT TIME OF ENTRY ON THE MEMORANDUM OF 20BROKERAGE ORDERS ROUTED TO FLOOR BROKERS ON THE CBOE (THEEXCHANGE), AND ALSO FAILED TO SHOW THE CORRECT TIME THE ORDERWAS RECEIVED ON THE MEMORANDUM FOR 12 OF THE ABOVEBROKERAGE ORDERS, AS WELL AS ANOTHER BROKERAGE ORDERROUTED TO THE EXCHANGE. AS A RESULT, CBOE ALLEGED THAT THE FIRMVIOLATED SECURITIES EXCHANGE ACT OF 1934 RULE 17A-3(A)(6)(I).


Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED A TOTAL OF $37,500 (TO BE PAIDJOINTLY TO THE EXCHANGES IN RELATED DISCIPLINARY ACTIONS, OFWHICH $12,500 SHALL BE PAID TO CBOE).

Firm Statement THE FIRM CONSENTED, WITHOUT ADMITTING OR DENYING THE CHARGES,TO FINDINGS BASED ON VIOLATIONS OF CERTAIN EXCHANGE AND OTHERRULES, AND CONSENTED TO THE IMPOSITION OF SANCTIONSSPECIFICALLY INCLUDING, BUT NOT LIMITED TO, CONSENTING TO PAYTHE FINE IMPOSED BY THE BUSINESS CONDUCT COMMITTEECONSISTENT WITH THE OFFER OF SETTLEMENT, STIPULATION OF FACTSAND CONSENT TO SANCTIONS, AND TO COMPLY WITH ALL OTHERSANCTIONS. THE COMMITTEE ACCEPTED THE STIPULATION OF FACTUALFINDINGS, AND ON THE BASIS THEREOF, FOUND THAT THE FIRM VIOLATEDRULE 17A-3(A)(6)(I) OF THE SECURITIES EXCHANGE ACT OF 1934.




i


Allegations: THE FIRM FAILED TO SHOW THE CORRECT TIME OF ENTRY ON THEMEMORANDUM OF 17 BROKERAGE ORDERS ROUTED TO FLOORBROKERS ON THE NASDAQ PHLX LLC (THE EXCHANGE). THE FIRM ALSOFAILED TO SHOW THE CORRECT TIME THE ORDER WAS RECEIVED ON THEMEMORANDUM FOR 2 OF THE ABOVE BROKERAGE ORDERS, AS WELL ASFOR THE MEMORANDUM FOR 2 ADDITIONAL BROKERAGE ORDERSROUTED TO THE EXCHANGE DURING THE RELEVANT PERIOD. AS ARESULT, THE FIRM VIOLATED SECURITIES EXCHANGE ACT OF 1934 RULE17A-3(A)(6)(I) AND EXCHANGE RULE 760.














THE FIRM FAILED TO SHOW THE CORRECT TIME OF ENTRY ON THEMEMORANDUM OF 17 BROKERAGE ORDERS ROUTED TO FLOORBROKERS ON THE NASDAQ PHLX LLC (THE EXCHANGE). THE FIRM ALSOFAILED TO SHOW THE CORRECT TIME THE ORDER WAS RECEIVED ON THEMEMORANDUM FOR 2 OF THE ABOVE BROKERAGE ORDERS, AS WELL ASFOR THE MEMORANDUM FOR 2 ADDITIONAL BROKERAGE ORDERSROUTED TO THE EXCHANGE DURING THE RELEVANT PERIOD. AS ARESULT, THE FIRM VIOLATED SECURITIES EXCHANGE ACT OF 1934 RULE17A-3(A)(6)(I) AND EXCHANGE RULE 760.


Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $37,500 (TO BE PAID JOINTLY TOTHE EXCHANGES IN RELATED DISCIPLINARY ACTIONS, OF WHICH $12,500SHALL BE PAID TO NASDAQ PHLX LLC).

Regulator Statement THE FIRM CONSENTS, WITHOUT ADMITTING OR DENYING THE CHARGES,TO FINDINGS BASED ON VIOLATIONS OF CERTAIN EXCHANGE AND OTHERRULES, AND CONSENTS TO THE IMPOSITION OF SANCTIONSSPECIFICALLY INCLUDING, BUT NOT LIMITED TO, CONSENTING TO PAYTHE FINE IMPOSED BY THE BUSINESS CONDUCT COMMITTEECONSISTENT WITH THE OFFER OF SETTLEMENT, STIPULATION OF FACTSAND CONSENT TO SANCTIONS, AND TO COMPLY WITH ALL OTHERSANCTIONS, AS HEREINAFTER SET FORTH. THE COMMITTEE ACCEPTSTHE FOREGOING STIPULATION OF FACTUAL FINDINGS, AND ON THE BASISTHEREOF, FINDS THAT THE FIRM VIOLATED RULE 17A-3(A)(6)(I) OF THESECURITIES EXCHANGE ACT OF 1934 AND EXCHANGE RULE 760.(ASSOCIATED CASE: ENFORCEMENT NO. 2017-03)


No








THE FIRM CONSENTS, WITHOUT ADMITTING OR DENYING THE CHARGES,TO FINDINGS BASED ON VIOLATIONS OF CERTAIN EXCHANGE AND OTHERRULES, AND CONSENTS TO THE IMPOSITION OF SANCTIONSSPECIFICALLY INCLUDING, BUT NOT LIMITED TO, CONSENTING TO PAYTHE FINE IMPOSED BY THE BUSINESS CONDUCT COMMITTEECONSISTENT WITH THE OFFER OF SETTLEMENT, STIPULATION OF FACTSAND CONSENT TO SANCTIONS, AND TO COMPLY WITH ALL OTHERSANCTIONS, AS HEREINAFTER SET FORTH. THE COMMITTEE ACCEPTSTHE FOREGOING STIPULATION OF FACTUAL FINDINGS, AND ON THE BASISTHEREOF, FINDS THAT THE FIRM VIOLATED RULE 17A-3(A)(6)(I) OF THESECURITIES EXCHANGE ACT OF 1934 AND EXCHANGE RULE 760.(ASSOCIATED CASE: ENFORCEMENT NO. 2017-03)






CENSURE





Allegations: NASDAQ PHLX LLC ALLEGED THAT THE FIRM FAILED TO SHOW THECORRECT TIME OF ENTRY ON THE MEMORANDUM OF 17 BROKERAGEORDERS ROUTED TO FLOOR BROKERS ON THE NASDAQ PHLX LLC (THEEXCHANGE), AND ALSO FAILED TO SHOW THE CORRECT TIME THE ORDERWAS RECEIVED ON THE MEMORANDUM FOR 2 OF THE ABOVEBROKERAGE ORDERS, AS WELL AS FOR THE MEMORANDUM FOR 2ADDITIONAL BROKERAGE ORDERS ROUTED TO THE EXCHANGE DURINGTHE RELEVANT PERIOD. AS A RESULT, NASDAQ PHLX LLC ALLEGED THATTHE FIRM VIOLATED SECURITIES EXCHANGE ACT OF 1934 RULE 17A-3(A)(6)(I) AND EXCHANGE RULE 760.



Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED A TOTAL OF $37,500 (TO BE PAIDJOINTLY TO THE EXCHANGES IN RELATED DISCIPLINARY ACTIONS, OFWHICH $12,500 SHALL BE PAID TO NASDAQ PHLX LLC).

Firm Statement THE FIRM CONSENTED, WITHOUT ADMITTING OR DENYING THE CHARGES,TO FINDINGS BASED ON VIOLATIONS OF CERTAIN EXCHANGE AND OTHERRULES, AND CONSENTED TO THE IMPOSITION OF SANCTIONSSPECIFICALLY INCLUDING, BUT NOT LIMITED TO, CONSENTING TO PAYTHE FINE IMPOSED BY THE BUSINESS CONDUCT COMMITTEECONSISTENT WITH THE OFFER OF SETTLEMENT, STIPULATION OF FACTSAND CONSENT TO SANCTIONS, AND TO COMPLY WITH ALL OTHERSANCTIONS. THE COMMITTEE ACCEPTED THE STIPULATION OF FACTUALFINDINGS, AND ON THE BASIS THEREOF, FOUND THAT THE FIRM VIOLATEDRULE 17A-3(A)(6)(I) OF THE SECURITIES EXCHANGE ACT OF 1934 ANDEXCHANGE RULE 760. (ASSOCIATED CASE: ENFORCEMENT NO. 2017-03).







www.finra.org/brokercheck User GuidanceTHE FIRM CONSENTED, WITHOUT ADMITTING OR DENYING THE CHARGES,TO FINDINGS BASED ON VIOLATIONS OF CERTAIN EXCHANGE AND OTHERRULES, AND CONSENTED TO THE IMPOSITION OF SANCTIONSSPECIFICALLY INCLUDING, BUT NOT LIMITED TO, CONSENTING TO PAYTHE FINE IMPOSED BY THE BUSINESS CONDUCT COMMITTEECONSISTENT WITH THE OFFER OF SETTLEMENT, STIPULATION OF FACTSAND CONSENT TO SANCTIONS, AND TO COMPLY WITH ALL OTHERSANCTIONS. THE COMMITTEE ACCEPTED THE STIPULATION OF FACTUALFINDINGS, AND ON THE BASIS THEREOF, FOUND THAT THE FIRM VIOLATEDRULE 17A-3(A)(6)(I) OF THE SECURITIES EXCHANGE ACT OF 1934 ANDEXCHANGE RULE 760. (ASSOCIATED CASE: ENFORCEMENT NO. 2017-03).


i


Initiated By: NYSE MKT LLC







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOSHOW THE CORRECT TIME OF ENTRY ON THE MEMORANDUM OF 17BROKERAGE ORDERS ROUTED TO FLOOR BROKERS ON THE NYSE MKTLLC (THE EXCHANGE). THE FIRM ALSO FAILED TO SHOW THE CORRECTTIME THE ORDER WAS RECEIVED ON THE MEMORANDUM FOR 2 OF THEABOVE BROKERAGE ORDERS, AS WELL AS ANOTHER BROKERAGE ORDERMEMORANDA ROUTED TO THE EXCHANGE. AS A RESULT OF ITS CONDUCT,THE FIRM VIOLATED RULE 17A-3(A)(6)(I) OF THE SECURITIES EXCHANGEACT OF 1934 AND NYSE MKT RULE 956.NY.



Resolution:


No









Sanction Details: THE FIRM WAS CENSURED AND FINED $37,500 (TO BE PAID JOINTLY TOTHE EXCHANGES IN RELATED DISCIPLINARY ACTIONS, OF WHICH $12,500SHALL BE PAID TO NYSE MKT). THE DECISION BECAME FINAL ON APRIL 29,2017.







CENSURE





Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOSHOW THE CORRECT TIME OF ENTRY ONTHE MEMORANDUM OF 17 BROKERAGE ORDERS ROUTED TO FLOORBROKERS ON THE NYSE MKT LLC (THE EXCHANGE). THE FIRM ALSOFAILED TO SHOW THE CORRECT TIME THE ORDER WAS RECEIVED ON THEMEMORANDUM FOR 2 OF THE ABOVE BROKERAGE ORDERS, AS WELL ASANOTHER BROKERAGE ORDER MEMORANDA ROUTED TO THEEXCHANGE. AS A RESULT OF ITS CONDUCT, THE FIRM VIOLATED RULE17A-3(A)(6)(I) OF THE SECURITIES EXCHANGE ACT OF1934 AND NYSE MKT RULE 956.NY.



Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED A TOTAL OF $37,500 (TO BE PAIDJOINTLY TO THE EXCHANGES IN RELATED DISCIPLINARY ACTIONS, OFWHICH $12,500 SHALL BE PAID TO NYSE MKT LLC).








Sanction Details: THE FIRM WAS CENSURED AND FINED A TOTAL OF $37,500 (TO BE PAIDJOINTLY TO THE EXCHANGES IN RELATED DISCIPLINARY ACTIONS, OFWHICH $12,500 SHALL BE PAID TO NYSE MKT LLC).

Firm Statement THE FIRM CONSENTED, WITHOUT ADMITTING OR DENYING THE CHARGES,TO FINDINGS BASED ON VIOLATIONS OF CERTAIN EXCHANGE AND OTHERRULES, AND CONSENTED TO THE IMPOSITION OF SANCTIONSSPECIFICALLY INCLUDING, BUT NOT LIMITED TO, CONSENTING TO PAYTHE FINE IMPOSED BY THE BUSINESS CONDUCT COMMITTEECONSISTENT WITH THE OFFER OF SETTLEMENT, STIPULATION OF FACTSAND CONSENT TO SANCTIONS, AND TO COMPLY WITH ALL OTHERSANCTIONS. THE COMMITTEE ACCEPTED THE STIPULATION OF FACTUALFINDINGS, AND ON THE BASIS THEREOF, FOUND THAT THE FIRM VIOLATEDRULE 17A-3(A)(6)(I) OF THE SECURITIES EXCHANGE ACT OF 1934.


i


Allegations: UBS SECURITIES LLC ("UBS"), AN EXCHANGE TPH ORGANIZATION, WASCENSURED AND FINED $650,000, OF WHICH $195,000 WAS PAYABLE TOCBOE. UBS: (I) MISMARKED OPTION ORDERS WITH AN ORIGIN CODE OF "CUSTOMER" RESULTING IN NUMEROUS EXECUTIONS ON CBOE THATSHOULD HAVE BEEN MARKED AND EXECUTED WITH A "FIRM" ORIGINCODE; (II) FAILED TO IDENTIFY ONE OF ITS CUSTOMERS AS APROFESSIONAL CUSTOMER, RESULTING IN THE FIRM'S IMPROPERROUTING OF NUMEROUS ORDERS THAT WERE EXECUTED ON CBOE WITHAN INCORRECT ORIGIN CODE OF "CUSTOMER" INSTEAD OF A "PROFESSIONAL CUSTOMER" ORIGIN CODE; (III) FAILED TO MAINTAINADEQUATE SUPERVISORY PROCEDURES SO AS TO ASSURE COMPLIANCEWITH EXCHANGE RULES AND THE EXCHANGE ACT AS THEY RELATE TOORIGIN CODES; (IV) FAILED TO IMPLEMENT, MAINTAIN AND ENFORCEADEQUATE WRITTEN SUPERVISORY PROCEDURES AS THEY RELATE TOORIGIN CODES SO AS TO DETECT AND PREVENT VIOLATIONS OFEXCHANGE RULES AND OF THE EXCHANGE ACT AS THEY RELATE TOORIGIN CODES; (V) FAILED TO SUPERVISE TO ASSURE COMPLIANCE WITHEXCHANGE RULES AND THE EXCHANGE ACT AS THEY RELATE TO ORIGINCODES; AND (VI) FAILED TO MAINTAIN ACCURATE BOOKS AND RECORDS.(EXCHANGE RULES 1.1(GGG) - DEFINITIONS (PROFESSIONAL), 4.2 -ADHERENCE TO LAW, 4.22 - COMMUNICATIONS TO THE EXCHANGE ORTHE CLEARING CORPORATION, 4.24 - SUPERVISION, 6.51 - REPORTINGDUTIES, AND 15.1 - MAINTENANCE, RETENTION AND FURNISHING OFBOOKS, RECORDS AND OTHER INFORMATION; SECTION 17(A) OF THEEXCHANGE ACT AND RULE 17A-3 - RECORDS TO BE MADE BY CERTAINEXCHANGE MEMBERS, BROKERS AND DEALERS THEREUNDER)












Docket/Case Number: 16-0029/ 20130374482



UBS SECURITIES LLC ("UBS"), AN EXCHANGE TPH ORGANIZATION, WASCENSURED AND FINED $650,000, OF WHICH $195,000 WAS PAYABLE TOCBOE. UBS: (I) MISMARKED OPTION ORDERS WITH AN ORIGIN CODE OF "CUSTOMER" RESULTING IN NUMEROUS EXECUTIONS ON CBOE THATSHOULD HAVE BEEN MARKED AND EXECUTED WITH A "FIRM" ORIGINCODE; (II) FAILED TO IDENTIFY ONE OF ITS CUSTOMERS AS APROFESSIONAL CUSTOMER, RESULTING IN THE FIRM'S IMPROPERROUTING OF NUMEROUS ORDERS THAT WERE EXECUTED ON CBOE WITHAN INCORRECT ORIGIN CODE OF "CUSTOMER" INSTEAD OF A "PROFESSIONAL CUSTOMER" ORIGIN CODE; (III) FAILED TO MAINTAINADEQUATE SUPERVISORY PROCEDURES SO AS TO ASSURE COMPLIANCEWITH EXCHANGE RULES AND THE EXCHANGE ACT AS THEY RELATE TOORIGIN CODES; (IV) FAILED TO IMPLEMENT, MAINTAIN AND ENFORCEADEQUATE WRITTEN SUPERVISORY PROCEDURES AS THEY RELATE TOORIGIN CODES SO AS TO DETECT AND PREVENT VIOLATIONS OFEXCHANGE RULES AND OF THE EXCHANGE ACT AS THEY RELATE TOORIGIN CODES; (V) FAILED TO SUPERVISE TO ASSURE COMPLIANCE WITHEXCHANGE RULES AND THE EXCHANGE ACT AS THEY RELATE TO ORIGINCODES; AND (VI) FAILED TO MAINTAIN ACCURATE BOOKS AND RECORDS.(EXCHANGE RULES 1.1(GGG) - DEFINITIONS (PROFESSIONAL), 4.2 -ADHERENCE TO LAW, 4.22 - COMMUNICATIONS TO THE EXCHANGE ORTHE CLEARING CORPORATION, 4.24 - SUPERVISION, 6.51 - REPORTINGDUTIES, AND 15.1 - MAINTENANCE, RETENTION AND FURNISHING OFBOOKS, RECORDS AND OTHER INFORMATION; SECTION 17(A) OF THEEXCHANGE ACT AND RULE 17A-3 - RECORDS TO BE MADE BY CERTAINEXCHANGE MEMBERS, BROKERS AND DEALERS THEREUNDER)


Resolution:

Other Sanctions Ordered: A CENSURE AND A TOTAL FINE OF $650,000 OF WHICH $195,000 SHALL BEPAID TO CBOE AND THE BALANCE OF THE FINE AMOUNT WILL BE PAID TOBOX OPTIONS EXCHANGE LLC; NASDAQ OMX PHLX LLC; INTERNATIONALSECURITIES EXCHANGE; AND NYSE REGULATION, INC. ON BEHALF OFNYSE ARCA INC. AND NYSE MKT LLC.

Sanction Details: A CENSURE AND A TOTAL FINE OF $650,000 OF WHICH $195,000 SHALL BEPAID TO CBOE AND THE BALANCE OF THE FINE AMOUNT WILL BE PAID TOBOX OPTIONS EXCHANGE LLC; NASDAQ OMX PHLX LLC; INTERNATIONALSECURITIES EXCHANGE; AND NYSE REGULATION, INC. ON BEHALF OFNYSE ARCA INC. AND NYSE MKT LLC.


Consent


Allegations: WITHOUT ADMITTING OR DENYING ANY ALLEGATIONS OR VIOLATIONS,THE FIRM CONSENTED TO FINDINGS, FOR THE PURPOSES OFSETTLEMENT, THAT THE FIRM FAILED TO PLACE THE CORRECT ORIGINCODES ON CERTAIN ORDERS AND FAILED TO PROVIDE AN ADEQUATESYSTEM OF SUPERVISION, INCLUDING WRITTEN PROCEDURES AND ASYSTEM OF FOLLOW-UP AND REVIEW, WITH RESPECT TO COMPLIANCEWITH EXCHANGE RULES AND POLICIES GOVERNING THE USE OFACCOUNT ORIGIN CODES ON ORDERS.UNDER THE OFFER OF SETTLEMENT AND CONSENT, UBS AGREED TO PAYA TOTAL FINE OF $650,000.00, OF WHICH $195,000.00 SHALL BE PAID TOCHICAGO BOARD OF OPTIONS EXCHANGE, INC. AND THE REMAININGAMOUNT SHALL BE PAID TO NYSE-MKT, BOX OPTIONS EXCHANGE LLC,NYSE ARCA, INC.,NASDAQ PHLX LLC, INTERNATIONAL SECURITIESEXCHANGE, LLC. ADDITIONALLY, UBS SECURITIES LLC CONSENTED TO ACENSURE.







Initiated By: CHICAGO BOARD OF OPTIONS EXCHANGE, INC.




CENSURE





WITHOUT ADMITTING OR DENYING ANY ALLEGATIONS OR VIOLATIONS,THE FIRM CONSENTED TO FINDINGS, FOR THE PURPOSES OFSETTLEMENT, THAT THE FIRM FAILED TO PLACE THE CORRECT ORIGINCODES ON CERTAIN ORDERS AND FAILED TO PROVIDE AN ADEQUATESYSTEM OF SUPERVISION, INCLUDING WRITTEN PROCEDURES AND ASYSTEM OF FOLLOW-UP AND REVIEW, WITH RESPECT TO COMPLIANCEWITH EXCHANGE RULES AND POLICIES GOVERNING THE USE OFACCOUNT ORIGIN CODES ON ORDERS.UNDER THE OFFER OF SETTLEMENT AND CONSENT, UBS AGREED TO PAYA TOTAL FINE OF $650,000.00, OF WHICH $195,000.00 SHALL BE PAID TOCHICAGO BOARD OF OPTIONS EXCHANGE, INC. AND THE REMAININGAMOUNT SHALL BE PAID TO NYSE-MKT, BOX OPTIONS EXCHANGE LLC,NYSE ARCA, INC.,NASDAQ PHLX LLC, INTERNATIONAL SECURITIESEXCHANGE, LLC. ADDITIONALLY, UBS SECURITIES LLC CONSENTED TO ACENSURE.


Resolution:

Other Sanctions Ordered: THE FIRM WAS CENSURED AND FINED $195,000.00

Sanction Details: THE FIRM WAS CENSURED AND FINED $195,000.00




i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, UBS SECURITIES LLC(UBSW OR THE FIRM) CONSENTED TO THE SANCTIONS AND TO THEENTRY OF FINDINGS THAT IT EXECUTED NUMEROUS TRANSACTIONSWITH INCORRECT ORIGIN CODES ACROSS MULTIPLE MARKETS,INCLUDING THE EXCHANGE. THE FINDINGS STATED THAT SPECIFICALLY,FOR SIX CUSTOMERS, UBSW MISMARKED APPROXIMATELY 1,237EXECUTIONS, TOTALING APPROXIMATELY 23,494 OPTIONS CONTRACTS,AS "CUSTOMER", ALTHOUGH THE ORDERS WERE SENT TO UBSW WITHTHE "FIRM" ORIGIN CODE. OF THE MISMARKED CONTRACTS, 4,985OCCURRED ON THE EXCHANGE. UBSW'S EXECUTION OF THE ORDERSWITH INCORRECT ORIGIN CODES RESULTED FROM A CONFIGURATIONERROR THAT HAD CAUSED THE FIRM'S DEFAULT CODE OF CUSTOMER TOBE INSERTED INTO THE FINANCIAL INFORMATION EXCHANGE (FIX) TAG204 FOR CERTAIN CUSTOMER ORDERS WHEN THEIR ORDERS WEREPASSED ONTO THE VARIOUS MARKETS. FIX TAG 204 IS USED FOROPTIONS WHEN DELIVERING THE ORDER TO AN EXECUTIONSYSTEM/EXCHANGE TO SPECIFY THE PROPER ORIGIN CODE FOR THEORDER. EACH INSTANCE IN WHICH UBSW EXECUTED AN ORDER WITH ANINCORRECT ORIGIN CODE COULD HAVE HAD ADVERSE CONSEQUENCES,SUCH AS CREATING INACCURATE ORDER RECORDS, CREATING ANINACCURATE AUDIT TRAIL, INADVERTENTLY IMPACTING THE PRIORITY OFORDER EXECUTION, REPORTING TRADES TO THE OPTIONS CLEARINGCORPORATION (OCC) WITH INACCURATE TRADE DETAILS, ANDADVERSELY IMPACTING THE EXCHANGE'S ABILITY TO SURVEIL FOR ANDDETECT POTENTIAL VIOLATIONS OF ITS RULES AND FEDERAL SECURITIESLAWS. THE FINDINGS ALSO STATED THAT UBSW FAILED TO HAVE ANYPROCEDURES FOR ENSURING ORDERS HAD BEEN ENTERED WITH THECORRECT ORIGIN CODES AND FOR CONDUCTING REVIEWS TO DETECTTHAT ORDERS HAD BEEN ENTERED AND EXECUTED WITH INCORRECTORIGIN CODES. IT WAS ONLY THROUGH FINRA'S REVIEW ANDINVESTIGATION THAT UBSW WAS ALERTED TO ITS MISCODINGVIOLATIONS, AND UBSW THEREAFTER TOOK STEPS TO DEVELOP ANDIMPLEMENT RELEVANT SYSTEMS, TRAININGS, AND PROCEDURES. INSUMMARY, UBSW FAILED TO HAVE SUPERVISORY SYSTEMS ANDCONTROLS IN PLACE, INCLUDING A SEPARATE SYSTEM OF FOLLOW-UPAND REVIEW, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHTHE EXCHANGE'S ORIGIN CODE REQUIREMENTS IN THAT THE FIRMFAILED TO DO THE FOLLOWING: (I) REASONABLY ADDRESS ORIGIN CODEREQUIREMENTS IN THE DEVELOPMENT AND PROGRAMMING OF ITSORDER ENTRY SYSTEMS; (II) MAINTAIN WRITTEN SUPERVISORYPROCEDURES REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHTHE EXCHANGE'S RULE RELATING TO THE ASSIGNMENT OF ORIGINCODES; (III) ADEQUATELY TRAIN ITS EMPLOYEES WITH RESPECT TO THESIGNIFICANCE OF PROPERLY MARKING ORIGIN CODES IN ITS ORDERENTRY SYSTEMS; AND (IV) ADEQUATELY SUPERVISE ITS EMPLOYEESWITH RESPECT TO THE PROPER MARKING OF ORIGIN CODES.







Initiated By: BOX OPTIONS EXCHANGE LLC







WITHOUT ADMITTING OR DENYING THE FINDINGS, UBS SECURITIES LLC(UBSW OR THE FIRM) CONSENTED TO THE SANCTIONS AND TO THEENTRY OF FINDINGS THAT IT EXECUTED NUMEROUS TRANSACTIONSWITH INCORRECT ORIGIN CODES ACROSS MULTIPLE MARKETS,INCLUDING THE EXCHANGE. THE FINDINGS STATED THAT SPECIFICALLY,FOR SIX CUSTOMERS, UBSW MISMARKED APPROXIMATELY 1,237EXECUTIONS, TOTALING APPROXIMATELY 23,494 OPTIONS CONTRACTS,AS "CUSTOMER", ALTHOUGH THE ORDERS WERE SENT TO UBSW WITHTHE "FIRM" ORIGIN CODE. OF THE MISMARKED CONTRACTS, 4,985OCCURRED ON THE EXCHANGE. UBSW'S EXECUTION OF THE ORDERSWITH INCORRECT ORIGIN CODES RESULTED FROM A CONFIGURATIONERROR THAT HAD CAUSED THE FIRM'S DEFAULT CODE OF CUSTOMER TOBE INSERTED INTO THE FINANCIAL INFORMATION EXCHANGE (FIX) TAG204 FOR CERTAIN CUSTOMER ORDERS WHEN THEIR ORDERS WEREPASSED ONTO THE VARIOUS MARKETS. FIX TAG 204 IS USED FOROPTIONS WHEN DELIVERING THE ORDER TO AN EXECUTIONSYSTEM/EXCHANGE TO SPECIFY THE PROPER ORIGIN CODE FOR THEORDER. EACH INSTANCE IN WHICH UBSW EXECUTED AN ORDER WITH ANINCORRECT ORIGIN CODE COULD HAVE HAD ADVERSE CONSEQUENCES,SUCH AS CREATING INACCURATE ORDER RECORDS, CREATING ANINACCURATE AUDIT TRAIL, INADVERTENTLY IMPACTING THE PRIORITY OFORDER EXECUTION, REPORTING TRADES TO THE OPTIONS CLEARINGCORPORATION (OCC) WITH INACCURATE TRADE DETAILS, ANDADVERSELY IMPACTING THE EXCHANGE'S ABILITY TO SURVEIL FOR ANDDETECT POTENTIAL VIOLATIONS OF ITS RULES AND FEDERAL SECURITIESLAWS. THE FINDINGS ALSO STATED THAT UBSW FAILED TO HAVE ANYPROCEDURES FOR ENSURING ORDERS HAD BEEN ENTERED WITH THECORRECT ORIGIN CODES AND FOR CONDUCTING REVIEWS TO DETECTTHAT ORDERS HAD BEEN ENTERED AND EXECUTED WITH INCORRECTORIGIN CODES. IT WAS ONLY THROUGH FINRA'S REVIEW ANDINVESTIGATION THAT UBSW WAS ALERTED TO ITS MISCODINGVIOLATIONS, AND UBSW THEREAFTER TOOK STEPS TO DEVELOP ANDIMPLEMENT RELEVANT SYSTEMS, TRAININGS, AND PROCEDURES. INSUMMARY, UBSW FAILED TO HAVE SUPERVISORY SYSTEMS ANDCONTROLS IN PLACE, INCLUDING A SEPARATE SYSTEM OF FOLLOW-UPAND REVIEW, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHTHE EXCHANGE'S ORIGIN CODE REQUIREMENTS IN THAT THE FIRMFAILED TO DO THE FOLLOWING: (I) REASONABLY ADDRESS ORIGIN CODEREQUIREMENTS IN THE DEVELOPMENT AND PROGRAMMING OF ITSORDER ENTRY SYSTEMS; (II) MAINTAIN WRITTEN SUPERVISORYPROCEDURES REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHTHE EXCHANGE'S RULE RELATING TO THE ASSIGNMENT OF ORIGINCODES; (III) ADEQUATELY TRAIN ITS EMPLOYEES WITH RESPECT TO THESIGNIFICANCE OF PROPERLY MARKING ORIGIN CODES IN ITS ORDERENTRY SYSTEMS; AND (IV) ADEQUATELY SUPERVISE ITS EMPLOYEESWITH RESPECT TO THE PROPER MARKING OF ORIGIN CODES.








Resolution:




No




Initiated By: BOX OPTIONS EXCHANGE LLC







Allegations: WITHOUT ADMITTING OR DENYING ANY ALLEGATIONS OR VIOLATIONS,THE FIRM CONSENTED TO FINDINGS, FOR THE PURPOSES OFSETTLEMENT, THAT THE FIRM FAILED TO PLACE THE CORRECT ORIGINCODES ON CERTAIN ORDERS AND FAILED TO PROVIDE AN ADEQUATESYSTEM OF SUPERVISION, INCLUDING WRITTEN PROCEDURES AND ASYSTEM OF FOLLOW-UP AND REVIEW, WITH RESPECT TO COMPLIANCEWITH EXCHANGE RULES AND POLICIESGOVERNING THE USE OF ACCOUNT ORIGIN CODES ON ORDERS.UNDER THE OFFER OF SETTLEMENT AND CONSENT, UBS AGREED TO PAYA TOTAL FINE OF $650,000.00, OF WHICH $6,500.00 SHALL BE PAID TO BOXOPTIONS EXCHANGE, INC. AND THE REMAINING AMOUNT SHALL BE PAIDTO NYSE-MKT, CHICAGO BOARD OF OPTIONS EXCHANGE, NYSEARCA,INC.,NASDAQ PHLX LLC, INTERNATIONAL SECURITIES EXCHANGE,LLC. ADDITIONALLY, UBS SECURITIES LLC CONSENTED TO A CENSURE.










CENSURE


Resolution:


Sanction Details: THE FIRM WAS CENSURE AND FINED $6,500.00




i


Allegations: FINDINGS THAT THE FIRM IMPROPERLY MARKED MILLIONS OF OPTIONSORDERS WITH INCORRECT ORIGIN CODES AND SENT THOSE ORDERS TOTHE EXCHANGE THROUGH VARIOUS ORDER ENTRY SYSTEMS EMPLOYEDBY THE FIRM TO SEND OPTIONS ORDERS, RESULTING IN TRANSACTIONSEXECUTED BY THE FIRM THAT MAY HAVE TRADED AHEAD OF OTHERORDERS ENTITLED TO EXECUTION PRIORITY; POTENTIAL ADVERSEIMPACT TO THE EXECUTION PRICE AND QUANTITY OF OTHER MARKETPARTICIPANTS' ORDERS; AN INACCURATE AUDIT TRAIL AND INACCURATEORDER RECORDS; TRADES BEING REPORTED TO THE OPTIONSCLEARING CORPORATION (OCC) WITH INACCURATE TRADE DETAILS; ANDAN ADVERSE IMPACT TO THE EXCHANGE'S ABILITY TO SURVEIL FOR ANDDETECT POTENTIAL VIOLATIONS OF ITS RULES AND OF FEDERALSECURITIES LAWS. ADDITIONALLY, FINRA CONCLUDED THAT THE FIRMHAD SUPERVISORY DEFICIENCIES RELATED TO THESE MATTERS.

THE FINDINGS STATED THAT THE FIRM FAILED TO HAVE SUPERVISORYSYSTEMS AND CONTROLS IN PLACE, INCLUDING A SEPARATE SYSTEM OFFOLLOW-UP AND REVIEW, REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH THE EXCHANGE'S ORIGIN CODE REQUIREMENTS INTHAT THE FIRM FAILED TO DO THE FOLLOWING: (I) REASONABLY ADDRESSORIGIN CODE REQUIREMENTS IN THE DEVELOPMENT ANDPROGRAMMING OF ITS ORDER ENTRY SYSTEMS; (II) MAINTAIN WRITTENSUPERVISORY PROCEDURES REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH THE EXCHANGE'S RULES RELATING TO THEASSIGNMENT OF ORIGIN CODES; (III) ADEQUATELY TRAIN ITS EMPLOYEESWITH RESPECT TO THE SIGNIFICANCE OF PROPERLY MARKING ORIGINCODES IN ITS ORDER ENTRY SYSTEMS; AND (IV) ADEQUATELY SUPERVISEITS EMPLOYEES WITH RESPECT TO THE PROPER MARKING OF ORIGINCODES.







Initiated By: INTERNATIONAL SECURITIES EXCHANGE







FINDINGS THAT THE FIRM IMPROPERLY MARKED MILLIONS OF OPTIONSORDERS WITH INCORRECT ORIGIN CODES AND SENT THOSE ORDERS TOTHE EXCHANGE THROUGH VARIOUS ORDER ENTRY SYSTEMS EMPLOYEDBY THE FIRM TO SEND OPTIONS ORDERS, RESULTING IN TRANSACTIONSEXECUTED BY THE FIRM THAT MAY HAVE TRADED AHEAD OF OTHERORDERS ENTITLED TO EXECUTION PRIORITY; POTENTIAL ADVERSEIMPACT TO THE EXECUTION PRICE AND QUANTITY OF OTHER MARKETPARTICIPANTS' ORDERS; AN INACCURATE AUDIT TRAIL AND INACCURATEORDER RECORDS; TRADES BEING REPORTED TO THE OPTIONSCLEARING CORPORATION (OCC) WITH INACCURATE TRADE DETAILS; ANDAN ADVERSE IMPACT TO THE EXCHANGE'S ABILITY TO SURVEIL FOR ANDDETECT POTENTIAL VIOLATIONS OF ITS RULES AND OF FEDERALSECURITIES LAWS. ADDITIONALLY, FINRA CONCLUDED THAT THE FIRMHAD SUPERVISORY DEFICIENCIES RELATED TO THESE MATTERS.

THE FINDINGS STATED THAT THE FIRM FAILED TO HAVE SUPERVISORYSYSTEMS AND CONTROLS IN PLACE, INCLUDING A SEPARATE SYSTEM OFFOLLOW-UP AND REVIEW, REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH THE EXCHANGE'S ORIGIN CODE REQUIREMENTS INTHAT THE FIRM FAILED TO DO THE FOLLOWING: (I) REASONABLY ADDRESSORIGIN CODE REQUIREMENTS IN THE DEVELOPMENT ANDPROGRAMMING OF ITS ORDER ENTRY SYSTEMS; (II) MAINTAIN WRITTENSUPERVISORY PROCEDURES REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH THE EXCHANGE'S RULES RELATING TO THEASSIGNMENT OF ORIGIN CODES; (III) ADEQUATELY TRAIN ITS EMPLOYEESWITH RESPECT TO THE SIGNIFICANCE OF PROPERLY MARKING ORIGINCODES IN ITS ORDER ENTRY SYSTEMS; AND (IV) ADEQUATELY SUPERVISEITS EMPLOYEES WITH RESPECT TO THE PROPER MARKING OF ORIGINCODES.


Resolution:




No




Allegations: WITHOUT ADMITTING OR DENYING ANY ALLEGATIONS OR VIOLATIONS,THE FIRM CONSENTED TO FINDINGS, FOR THE PURPOSES OFSETTLEMENT, THAT THE FIRM FAILED TO PLACE THE CORRECT ORIGINCODES ON CERTAIN ORDERS AND FAILED TO PROVIDE AN ADEQUATESYSTEM OF SUPERVISION, INCLUDING WRITTEN PROCEDURES AND ASYSTEM OF FOLLOW-UP AND REVIEW, WITH RESPECT TO COMPLIANCEWITH EXCHANGE RULES AND POLICIESGOVERNING THE USE OF ACCOUNT ORIGIN CODES ON ORDERS.UNDER THE OFFER OF SETTLEMENT AND CONSENT, UBS AGREED TO PAYA TOTAL FINE OF $650,000.00, OF WHICH $182,000.00 SHALL BE PAID TOINTERNATIONAL SECURITIES EXCHANGE AND THE REMAINING AMOUNTSHALL BE PAID TO CHICAGO BOARD OF OPTIONS EXCHANGE, INC, BOXOPTIONS EXCHANGE LLC, NYSE ARCA, INC.,NASDAQ PHLX LLC, NYSE MKTLLC. ADDITIONALLY, UBS SECURITIES LLC CONSENTED TO A CENSURE.











CENSURE





WITHOUT ADMITTING OR DENYING ANY ALLEGATIONS OR VIOLATIONS,THE FIRM CONSENTED TO FINDINGS, FOR THE PURPOSES OFSETTLEMENT, THAT THE FIRM FAILED TO PLACE THE CORRECT ORIGINCODES ON CERTAIN ORDERS AND FAILED TO PROVIDE AN ADEQUATESYSTEM OF SUPERVISION, INCLUDING WRITTEN PROCEDURES AND ASYSTEM OF FOLLOW-UP AND REVIEW, WITH RESPECT TO COMPLIANCEWITH EXCHANGE RULES AND POLICIESGOVERNING THE USE OF ACCOUNT ORIGIN CODES ON ORDERS.UNDER THE OFFER OF SETTLEMENT AND CONSENT, UBS AGREED TO PAYA TOTAL FINE OF $650,000.00, OF WHICH $182,000.00 SHALL BE PAID TOINTERNATIONAL SECURITIES EXCHANGE AND THE REMAINING AMOUNTSHALL BE PAID TO CHICAGO BOARD OF OPTIONS EXCHANGE, INC, BOXOPTIONS EXCHANGE LLC, NYSE ARCA, INC.,NASDAQ PHLX LLC, NYSE MKTLLC. ADDITIONALLY, UBS SECURITIES LLC CONSENTED TO A CENSURE.


Resolution:






i


Allegations: THE BUSINESS CONDUCT COMMITTEE ("COMMITTEE"), PURSUANT TORULE 960.2(F) OF THE RULES OF NASDAQ PHLX LLC ("EXCHANGE RULES"),AND UPON INFORMATION AND BELIEF, HEREBY AUTHORIZES THEISSUANCE OF THIS STATEMENT OF CHARGES AND ALLEGES THATRESPONDENT VIOLATED CERTAIN EXCHANGE RULES AND FEDERALSECURITIES LAWS WHEN ENTERING CERTAIN ORDERS ON BEHALF OFTHE FIRM'S CLIENTS.

THE FINDINGS STATED THAT THE FIRM IMPROPERLY MARKED MILLIONSOF OPTIONS ORDERS WITH INCORRECT ORIGIN CODES AND SENT THOSEORDERS TO THE EXCHANGE THROUGH VARIOUS ORDER ENTRY SYSTEMSEMPLOYED BY THE FIRM TO SEND OPTIONS ORDERS, RESULTING IN: (I)TRANSACTIONS EXECUTED BY THE FIRM THAT MAY HAVE TRADED AHEADOF OTHER ORDERS ENTITLED TO EXECUTION PRIORITY; (II) POTENTIALADVERSE IMPACT TO THE EXECUTION PRICE AND QUANTITY OF OTHERMARKET PARTICIPANTS' ORDERS; (III) AN INACCURATE AUDIT TRAIL ANDINACCURATE ORDER RECORDS; (IV) TRADES BEING REPORTED TO THEOPTIONS CLEARING CORPORATION (OCC) WITH INACCURATE TRADEDETAILS; AND (V) AN ADVERSE IMPACT TO THE EXCHANGE'S ABILITY TOSURVEIL FOR AND DETECT POTENTIAL VIOLATIONS OF ITS RULES AND OFFEDERAL SECURITIES LAWS.

THE FINDINGS ALSO STATED THAT RESPONDENT FAILED TO HAVE ANYPROCEDURES FOR ENSURING ORDERS HAD BEEN ENTERED WITH THECORRECT ORIGIN CODES AND FOR CONDUCTING REVIEWS TO DETECTTHAT ORDERS HAD BEEN ENTERED AND EXECUTED WITH INCORRECTORIGIN CODES. IT WAS ONLY THROUGH THE STAFFS REVIEW ANDINVESTIGATION THAT RESPONDENT WAS ALERTED TO ITS MISCODINGVIOLATIONS, AND RESPONDENT THEREAFTER TOOK STEPS TO DEVELOPAND IMPLEMENT RELEVANT SYSTEMS, TRAININGS, AND PROCEDURES. INSUMMARY, RESPONDENT FAILED TO HAVE SUPERVISORY SYSTEMS ANDCONTROLS IN PLACE, INCLUDING A SEPARATE SYSTEM OF FOLLOW-UPAND REVIEW, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHTHE EXCHANGE'S ORIGIN CODE REQUIREMENTS IN THAT THE FIRMFAILED TO DO THE FOLLOWING: (I) REASONABLY ADDRESS ORIGIN CODEREQUIREMENTS IN THE DEVELOPMENT AND PROGRAMMING OF ITSORDER ENTRY SYSTEMS; (II) MAINTAIN WRITTEN SUPERVISORYPROCEDURES REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHTHE EXCHANGE'S RULES RELATING TO THE ASSIGNMENT OF ORIGINCODES; (III) ADEQUATELY TRAIN ITS EMPLOYEES WITH RESPECT TO THESIGNIFICANCE OF PROPERLY MARKING ORIGIN CODES IN ITS ORDERENTRY SYSTEMS; AND (IV) ADEQUATELY SUPERVISE ITS EMPLOYEESWITH RESPECT TO THE PROPER MARKING OF ORIGIN CODES.














THE BUSINESS CONDUCT COMMITTEE ("COMMITTEE"), PURSUANT TORULE 960.2(F) OF THE RULES OF NASDAQ PHLX LLC ("EXCHANGE RULES"),AND UPON INFORMATION AND BELIEF, HEREBY AUTHORIZES THEISSUANCE OF THIS STATEMENT OF CHARGES AND ALLEGES THATRESPONDENT VIOLATED CERTAIN EXCHANGE RULES AND FEDERALSECURITIES LAWS WHEN ENTERING CERTAIN ORDERS ON BEHALF OFTHE FIRM'S CLIENTS.

THE FINDINGS STATED THAT THE FIRM IMPROPERLY MARKED MILLIONSOF OPTIONS ORDERS WITH INCORRECT ORIGIN CODES AND SENT THOSEORDERS TO THE EXCHANGE THROUGH VARIOUS ORDER ENTRY SYSTEMSEMPLOYED BY THE FIRM TO SEND OPTIONS ORDERS, RESULTING IN: (I)TRANSACTIONS EXECUTED BY THE FIRM THAT MAY HAVE TRADED AHEADOF OTHER ORDERS ENTITLED TO EXECUTION PRIORITY; (II) POTENTIALADVERSE IMPACT TO THE EXECUTION PRICE AND QUANTITY OF OTHERMARKET PARTICIPANTS' ORDERS; (III) AN INACCURATE AUDIT TRAIL ANDINACCURATE ORDER RECORDS; (IV) TRADES BEING REPORTED TO THEOPTIONS CLEARING CORPORATION (OCC) WITH INACCURATE TRADEDETAILS; AND (V) AN ADVERSE IMPACT TO THE EXCHANGE'S ABILITY TOSURVEIL FOR AND DETECT POTENTIAL VIOLATIONS OF ITS RULES AND OFFEDERAL SECURITIES LAWS.

THE FINDINGS ALSO STATED THAT RESPONDENT FAILED TO HAVE ANYPROCEDURES FOR ENSURING ORDERS HAD BEEN ENTERED WITH THECORRECT ORIGIN CODES AND FOR CONDUCTING REVIEWS TO DETECTTHAT ORDERS HAD BEEN ENTERED AND EXECUTED WITH INCORRECTORIGIN CODES. IT WAS ONLY THROUGH THE STAFFS REVIEW ANDINVESTIGATION THAT RESPONDENT WAS ALERTED TO ITS MISCODINGVIOLATIONS, AND RESPONDENT THEREAFTER TOOK STEPS TO DEVELOPAND IMPLEMENT RELEVANT SYSTEMS, TRAININGS, AND PROCEDURES. INSUMMARY, RESPONDENT FAILED TO HAVE SUPERVISORY SYSTEMS ANDCONTROLS IN PLACE, INCLUDING A SEPARATE SYSTEM OF FOLLOW-UPAND REVIEW, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHTHE EXCHANGE'S ORIGIN CODE REQUIREMENTS IN THAT THE FIRMFAILED TO DO THE FOLLOWING: (I) REASONABLY ADDRESS ORIGIN CODEREQUIREMENTS IN THE DEVELOPMENT AND PROGRAMMING OF ITSORDER ENTRY SYSTEMS; (II) MAINTAIN WRITTEN SUPERVISORYPROCEDURES REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHTHE EXCHANGE'S RULES RELATING TO THE ASSIGNMENT OF ORIGINCODES; (III) ADEQUATELY TRAIN ITS EMPLOYEES WITH RESPECT TO THESIGNIFICANCE OF PROPERLY MARKING ORIGIN CODES IN ITS ORDERENTRY SYSTEMS; AND (IV) ADEQUATELY SUPERVISE ITS EMPLOYEESWITH RESPECT TO THE PROPER MARKING OF ORIGIN CODES.

Resolution: Decision & Order of Offer of Settlement 112©2022 FINRA. All rights reserved. Report about UBS SECURITIES LLC






Resolution:


Sanction Details: THE FIRM IS CENSURED AND FINED $149,500.IF RESPONDENT FAILS TO PAY THE FINE WITHIN 30 CALENDAR DAYS OFTHE DATE OF THIS DECISION, OR FAILS TO COMPLY WITH ANY OTHERSANCTION BY THE DATE SET FORTH HEREIN, THE COMMITTEE SHALLDECLARE RESPONDENT TO BE IN MATERIAL BREACH OF ITS AGREEMENTAND MAY TAKE WHATEVER ACTIONS IT DEEMS NECESSARY TO RESPONDTO THE BREACH, INCLUDING, BUT NOT LIMITED TO, RESCINDING THISDECISION AND ALLOWING THE MATTER TO PROCEED IN ACCORDANCEWITH EXCHANGE RULES 960.1 THROUGH 960.12.

Regulator Statement THE DECISION OF THE BUSINESS CONDUCT COMMITTEE ("COMMITTEE")OF NASDAQ PHLX LLC (THE "EXCHANGE") IN THE MATTER IS AS FOLLOWS:THE FIRM MADE AN OFFER OF SETTLEMENT, STIPULATION OF FACTS ANDCONSENT TO SANCTIONS.

RESPONDENT AGREES THAT THE DECISION TO BE ISSUED SHALL BEFINAL, AND WAIVES ANY RIGHT TO A REVIEW OF THE DECISION OR ANYOTHER PHASE OR ASPECT OF THIS PROCEEDING BY THE BOARD OFDIRECTORS OF THE EXCHANGE; BY THE U.S. SECURITIES AND EXCHANGECOMMISSION; BY ANY FEDERAL OR STATE COURT; OR IN ANY OTHERFORUM OR BY ANY OTHER MEANS.THE COMMITTEE ACCEPTS THE FOREGOING STIPULATION OF FACTS ANDON THE BASIS THEREOF FINDS THAT RESPONDENT VIOLATED EXCHANGERULES 760, 785(C), 1014(G)(I)(A), 707, 708, 1053, AND 748, AND SECTION17(A)(1) OF THE EXCHANGE ACT AND RULE 17A-3(A)(6)(I) PROMULGATEDTHEREUNDER.THE COMMITTEE BELIEVES THAT THE SANCTIONS PROPOSED BYRESPONDENT IN ITS OFFER SERVE THE PUBLIC INTEREST, ARESUFFICIENTLY REMEDIAL UNDER THE CIRCUMSTANCES, AND REPRESENTA PROPER DISCHARGE OF THE EXCHANGE'S REGULATORYRESPONSIBILITIES UNDER THE EXCHANGE ACT OF 1934.

(ASSOCIATED CASE PHLX ENFORCEMENT # 2016-16, FINRA NO.20130374482)


No








THE DECISION OF THE BUSINESS CONDUCT COMMITTEE ("COMMITTEE")OF NASDAQ PHLX LLC (THE "EXCHANGE") IN THE MATTER IS AS FOLLOWS:THE FIRM MADE AN OFFER OF SETTLEMENT, STIPULATION OF FACTS ANDCONSENT TO SANCTIONS.

RESPONDENT AGREES THAT THE DECISION TO BE ISSUED SHALL BEFINAL, AND WAIVES ANY RIGHT TO A REVIEW OF THE DECISION OR ANYOTHER PHASE OR ASPECT OF THIS PROCEEDING BY THE BOARD OFDIRECTORS OF THE EXCHANGE; BY THE U.S. SECURITIES AND EXCHANGECOMMISSION; BY ANY FEDERAL OR STATE COURT; OR IN ANY OTHERFORUM OR BY ANY OTHER MEANS.THE COMMITTEE ACCEPTS THE FOREGOING STIPULATION OF FACTS ANDON THE BASIS THEREOF FINDS THAT RESPONDENT VIOLATED EXCHANGERULES 760, 785(C), 1014(G)(I)(A), 707, 708, 1053, AND 748, AND SECTION17(A)(1) OF THE EXCHANGE ACT AND RULE 17A-3(A)(6)(I) PROMULGATEDTHEREUNDER.THE COMMITTEE BELIEVES THAT THE SANCTIONS PROPOSED BYRESPONDENT IN ITS OFFER SERVE THE PUBLIC INTEREST, ARESUFFICIENTLY REMEDIAL UNDER THE CIRCUMSTANCES, AND REPRESENTA PROPER DISCHARGE OF THE EXCHANGE'S REGULATORYRESPONSIBILITIES UNDER THE EXCHANGE ACT OF 1934.

(ASSOCIATED CASE PHLX ENFORCEMENT # 2016-16, FINRA NO.20130374482)






CENSURE





Allegations: WITHOUT ADMITTING OR DENYING ANY ALLEGATIONS OR VIOLATIONS,THE FIRM CONSENTED TO FINDINGS, FOR THE PURPOSES OFSETTLEMENT, THAT THE FIRM FAILED TO PLACE THE CORRECT ORIGINCODES ON CERTAIN ORDERS AND FAILED TO PROVIDE AN ADEQUATESYSTEM OF SUPERVISION,INCLUDING WRITTEN PROCEDURES AND ASYSTEM OF FOLLOW-UP AND REVIEW, WITH RESPECT TO COMPLIANCEWITH EXCHANGE RULES AND POLICIES GOVERNING THE USE OFACCOUNT ORIGIN CODES ON ORDERS. UNDER THE OFFER OFSETTLEMENT AND CONSENT, UBS AGREED TO PAY A TOTAL FINE OF$650,000.00, OF WHICH $149,500.00 SHALL BE PAID TO NASDAQ PHLX LLCAND THE REMAINING AMOUNT SHALL BE PAID TO NYSEMKT,BOX OPTIONS EXCHANGE LLC, NYSE ARCA, INC., CHICAGO BOARD OFOPTIONS EXCHANGE, INTERNATIONAL SECURITIES EXCHANGE, LLC.ADDITIONALLY, UBS SECURITIES LLC CONSENTED TO A CENSURE.



Resolution:






i








Allegations: A FINRA HEARING OFFICER CONSIDERED AN OFFER OF SETTLEMENT ANDCONSENT ENTERED INTO BETWEEN FINRA ON BEHALF OF NYSEREGULATION, INC. AND THE FIRM.THE FIRM SUBMITTED AN OFFER OF SETTLEMENT AND CONSENT FORTHE SOLE PURPOSE OF SETTLING THIS DISCIPLINARY PROCEEDING,WITHOUT ADJUDICATION OF ANY ISSUES OF LAW OR FACT, AND WITHOUTADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGS REFERRED TOIN THE OFFER OF SETTLEMENT.THE HEARING OFFICER ACCEPTS THE OFFER OF SETTLEMENT ANDCONSENT AND ISSUES THIS DECISION.UBS SECURITIES LLC (FIRM OR UBS) VIOLATED CERTAIN NYSE ARCAOPTIONS RULES AND FEDERAL SECURITIES LAWS WHEN ENTERING ANDEXECUTING CERTAIN ORDERS ON BEHALF OF THE FIRM'S CLIENTS.

THE FINDINGS STATED THAT UBS EXECUTED NUMEROUS TRANSACTIONSWITH INCORRECT ORIGIN CODES ACROSS MULTIPLE MARKETS,INCLUDING THE EXCHANGE. SPECIFICALLY, FOR SIX CUSTOMERS, UBSMISMARKED APPROXIMATELY 1,237 EXECUTIONS, TOTALINGAPPROXIMATELY 23,494 OPTIONS CONTRACTS, AS "CUSTOMER",ALTHOUGH THE ORDERS WERE SENT TO UBS WITH THE "FIRM" ORIGINCODE. OF THE MISMARKED CONTRACTS, 794 OCCURRED ON THEEXCHANGE. UBS'S EXECUTION OF THE ORDERS WITH INCORRECT ORIGINCODES RESULTED FROM A CONFIGURATION ERROR THAT HAD CAUSEDTHE FIRM'S DEFAULT CODE OF CUSTOMER TO BE INSERTED INTO THEFINANCIAL INFORMATION EXCHANGE (FIX) TAG 204 FOR CERTAINCUSTOMER ORDERS WHEN THEIR ORDERS WERE PASSED ONTO THEVARIOUS MARKETS. FIX TAG 204 IS USED FOR OPTIONS WHENDELIVERING THE ORDER TO AN EXECUTION SYSTEM/EXCHANGE TOSPECIFY THE PROPER ORIGIN CODE FOR THE ORDER.UBS FAILED TO IDENTIFY ONE OF ITS CUSTOMERS AS A "PROFESSIONALCUSTOMER." AS A RESULT, THE FIRM ROUTED APPROXIMATELY 834,868OPTIONS ORDERS AS "CUSTOMER" INSTEAD OF "PROFESSIONALCUSTOMER," WHICH RESULTED IN THE MISMARKING OF 55,013EXECUTIONS, TOTALING 1,878,716 CONTRACTS. OF THE MISMARKEDCONTRACTS, 285,007 OCCURRED ON THE EXCHANGE. THE FIRM'SEXECUTION OF THE ORDERS WITH INCORRECT ORIGIN CODES RESULTEDFROM LIMITATIONS IN ITS ORDER MANAGEMENT SYSTEM THAT FAILED TOINCLUDE THE PROFESSIONAL CUSTOMER ORIGIN CODE DESIGNATION.EACH INSTANCE IN WHICH UBS EXECUTED AN ORDER WITH ANINCORRECT ORIGIN CODE COULD HAVE HAD ADVERSE CONSEQUENCES,SUCH AS CREATING INACCURATE ORDER RECORDS, CREATING ANINACCURATE AUDIT TRAIL, INADVERTENTLY IMPACTING THE PRIORITY OFORDER EXECUTION, REPORTING TRADES TO THE OPTIONS CLEARINGCORPORATION (OCC) WITH INACCURATE TRADE DETAILS, ANDADVERSELY IMPACTING THE EXCHANGE'S ABILITY TO SURVEIL FOR ANDDETECT POTENTIAL VIOLATIONS OF ITS RULES AND FEDERAL SECURITIESLAWS.

THE FINDINGS ALSO STATED THAT UBS FAILED TO HAVE ANYPROCEDURES FOR ENSURING THAT ORDERS HAD BEEN ENTERED WITHTHE CORRECT ORIGIN CODES AND FOR CONDUCTING REVIEWS TODETECT THAT ORDERS HAD BEEN ENTERED AND EXECUTED WITHINCORRECT ORIGIN CODES. IT WAS ONLY THROUGH FINRA'S REVIEW ANDINVESTIGATION THAT UBS WAS ALERTED TO ITS MISCODING VIOLATIONS,AND UBS THEREAFTER TOOK STEPS TO DEVELOP AND IMPLEMENTRELEVANT SYSTEMS, TRAININGS, AND PROCEDURES. IN SUMMARY, UBSFAILED TO HAVE SUPERVISORY SYSTEMS AND CONTROLS IN PLACE,INCLUDING A SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW,REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THEEXCHANGE'S ORIGIN CODE REQUIREMENTS IN THAT THE FIRM FAILED TODO THE FOLLOWING: (I) REASONABLY ADDRESS ORIGIN CODEREQUIREMENTS IN THE DEVELOPMENT AND PROGRAMMING OF ITSORDER ENTRY SYSTEMS; (II) MAINTAIN WRITTEN SUPERVISORYPROCEDURES REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHTHE EXCHANGE'S RULES RELATING TO THE ASSIGNMENT OF ORIGINCODES; (III) ADEQUATELY TRAIN ITS EMPLOYEES WITH RESPECT TO THESIGNIFICANCE OF PROPERLY MARKING ORIGIN CODES IN ITS ORDERENTRY SYSTEMS; AND (IV) ADEQUATELY SUPERVISE ITS EMPLOYEESWITH RESPECT TO THE PROPER MARKING OF ORIGIN CODES.














A FINRA HEARING OFFICER CONSIDERED AN OFFER OF SETTLEMENT ANDCONSENT ENTERED INTO BETWEEN FINRA ON BEHALF OF NYSEREGULATION, INC. AND THE FIRM.THE FIRM SUBMITTED AN OFFER OF SETTLEMENT AND CONSENT FORTHE SOLE PURPOSE OF SETTLING THIS DISCIPLINARY PROCEEDING,WITHOUT ADJUDICATION OF ANY ISSUES OF LAW OR FACT, AND WITHOUTADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGS REFERRED TOIN THE OFFER OF SETTLEMENT.THE HEARING OFFICER ACCEPTS THE OFFER OF SETTLEMENT ANDCONSENT AND ISSUES THIS DECISION.UBS SECURITIES LLC (FIRM OR UBS) VIOLATED CERTAIN NYSE ARCAOPTIONS RULES AND FEDERAL SECURITIES LAWS WHEN ENTERING ANDEXECUTING CERTAIN ORDERS ON BEHALF OF THE FIRM'S CLIENTS.

THE FINDINGS STATED THAT UBS EXECUTED NUMEROUS TRANSACTIONSWITH INCORRECT ORIGIN CODES ACROSS MULTIPLE MARKETS,INCLUDING THE EXCHANGE. SPECIFICALLY, FOR SIX CUSTOMERS, UBSMISMARKED APPROXIMATELY 1,237 EXECUTIONS, TOTALINGAPPROXIMATELY 23,494 OPTIONS CONTRACTS, AS "CUSTOMER",ALTHOUGH THE ORDERS WERE SENT TO UBS WITH THE "FIRM" ORIGINCODE. OF THE MISMARKED CONTRACTS, 794 OCCURRED ON THEEXCHANGE. UBS'S EXECUTION OF THE ORDERS WITH INCORRECT ORIGINCODES RESULTED FROM A CONFIGURATION ERROR THAT HAD CAUSEDTHE FIRM'S DEFAULT CODE OF CUSTOMER TO BE INSERTED INTO THEFINANCIAL INFORMATION EXCHANGE (FIX) TAG 204 FOR CERTAINCUSTOMER ORDERS WHEN THEIR ORDERS WERE PASSED ONTO THEVARIOUS MARKETS. FIX TAG 204 IS USED FOR OPTIONS WHENDELIVERING THE ORDER TO AN EXECUTION SYSTEM/EXCHANGE TOSPECIFY THE PROPER ORIGIN CODE FOR THE ORDER.UBS FAILED TO IDENTIFY ONE OF ITS CUSTOMERS AS A "PROFESSIONALCUSTOMER." AS A RESULT, THE FIRM ROUTED APPROXIMATELY 834,868OPTIONS ORDERS AS "CUSTOMER" INSTEAD OF "PROFESSIONALCUSTOMER," WHICH RESULTED IN THE MISMARKING OF 55,013EXECUTIONS, TOTALING 1,878,716 CONTRACTS. OF THE MISMARKEDCONTRACTS, 285,007 OCCURRED ON THE EXCHANGE. THE FIRM'SEXECUTION OF THE ORDERS WITH INCORRECT ORIGIN CODES RESULTEDFROM LIMITATIONS IN ITS ORDER MANAGEMENT SYSTEM THAT FAILED TOINCLUDE THE PROFESSIONAL CUSTOMER ORIGIN CODE DESIGNATION.EACH INSTANCE IN WHICH UBS EXECUTED AN ORDER WITH ANINCORRECT ORIGIN CODE COULD HAVE HAD ADVERSE CONSEQUENCES,SUCH AS CREATING INACCURATE ORDER RECORDS, CREATING ANINACCURATE AUDIT TRAIL, INADVERTENTLY IMPACTING THE PRIORITY OFORDER EXECUTION, REPORTING TRADES TO THE OPTIONS CLEARINGCORPORATION (OCC) WITH INACCURATE TRADE DETAILS, ANDADVERSELY IMPACTING THE EXCHANGE'S ABILITY TO SURVEIL FOR ANDDETECT POTENTIAL VIOLATIONS OF ITS RULES AND FEDERAL SECURITIESLAWS.

THE FINDINGS ALSO STATED THAT UBS FAILED TO HAVE ANYPROCEDURES FOR ENSURING THAT ORDERS HAD BEEN ENTERED WITHTHE CORRECT ORIGIN CODES AND FOR CONDUCTING REVIEWS TODETECT THAT ORDERS HAD BEEN ENTERED AND EXECUTED WITHINCORRECT ORIGIN CODES. IT WAS ONLY THROUGH FINRA'S REVIEW ANDINVESTIGATION THAT UBS WAS ALERTED TO ITS MISCODING VIOLATIONS,AND UBS THEREAFTER TOOK STEPS TO DEVELOP AND IMPLEMENTRELEVANT SYSTEMS, TRAININGS, AND PROCEDURES. IN SUMMARY, UBSFAILED TO HAVE SUPERVISORY SYSTEMS AND CONTROLS IN PLACE,INCLUDING A SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW,REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THEEXCHANGE'S ORIGIN CODE REQUIREMENTS IN THAT THE FIRM FAILED TODO THE FOLLOWING: (I) REASONABLY ADDRESS ORIGIN CODEREQUIREMENTS IN THE DEVELOPMENT AND PROGRAMMING OF ITSORDER ENTRY SYSTEMS; (II) MAINTAIN WRITTEN SUPERVISORYPROCEDURES REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHTHE EXCHANGE'S RULES RELATING TO THE ASSIGNMENT OF ORIGINCODES; (III) ADEQUATELY TRAIN ITS EMPLOYEES WITH RESPECT TO THESIGNIFICANCE OF PROPERLY MARKING ORIGIN CODES IN ITS ORDERENTRY SYSTEMS; AND (IV) ADEQUATELY SUPERVISE ITS EMPLOYEESWITH RESPECT TO THE PROPER MARKING OF ORIGIN CODES.


Resolution:


No









Regulator Statement THE FIRM VIOLATED SECTION 17(A)(1) OF THE EXCHANGE ACT, RULE 17A-3(A)(6)(I) THEREUNDER, AND NYSE ARCA OPTIONS RULES 6.68(A)(8), 6.69,11.1(B), 11.2(B), 11.16(A), AND 11.18(A) BY FAILING TO PLACE THE CORRECTORIGIN CODES ON ORDERS. NYSE ARCA OPTIONS RULE 11.18 BY FAILINGTO PROVIDE AN ADEQUATE SYSTEM OF SUPERVISION, INCLUDING AWRITTEN PROCEDURES AND A SYSTEM OF FOLLOW-UP AND REVIEW,WITH RESPECT TO COMPLIANCE WITH NYSE ARCA OPTIONS RULES ANDPOLICIES GOVERNING THE USE OF ACCOUNT ORIGIN CODES ON ORDERS.


No








Allegations: WITHOUT ADMITTING OR DENYING ANY ALLEGATIONS OR VIOLATIONS,THE FIRM CONSENTED TO FINDINGS, FOR THE PURPOSES OFSETTLEMENT, THAT THE FIRM FAILED TO PLACE THE CORRECT ORIGINCODES ON CERTAIN ORDERS AND FAILED TO PROVIDE AN ADEQUATESYSTEM OF SUPERVISION, INCLUDING WRITTEN PROCEDURES AND ASYSTEM OF FOLLOW-UP AND REVIEW, WITH RESPECT TO COMPLIANCEWITH EXCHANGE RULES AND POLICIESGOVERNING THE USE OF ACCOUNT ORIGIN CODES ON ORDERS. UNDERTHE OFFER OF SETTLEMENT AND CONSENT, UBS AGREED TO PAY ATOTAL FINE OF $650,000.00, OF WHICH $97,500.00 SHALL BE PAID TO NYSEARCA, INC. AND THE REMAINING AMOUNT SHALL BE PAID TO NYSEMKT,BOX OPTIONS EXCHANGE LLC, CHICAGO BOARD OF OPTIONS EXCHANGE,NASDAQ PHLX LLC, INTERNATIONAL SECURITIES EXCHANGE, LLC.ADDITIONALLY, UBS SECURITIES LLC CONSENTED TO A CENSURE.










CENSURE



Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $97500.00




i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, UBS SECURITIES LLC(UBSW OR THE FIRM) CONSENTED TO THE SANCTIONS AND TO THEENTRY OF FINDINGS THAT IT EXECUTED NUMEROUS TRANSACTIONSWITH INCORRECT ORIGIN CODES ACROSS MULTIPLE MARKETS,INCLUDING THE EXCHANGE.

THE FINDINGS STATED THAT SPECIFICALLY, FOR SIX CUSTOMERS, UBSWMISMARKED APPROXIMATELY 1,237 EXECUTIONS, TOTALINGAPPROXIMATELY 23,494 OPTIONS CONTRACTS, AS "CUSTOMER",ALTHOUGH THE ORDERS WERE SENT TO UBSW WITH THE "FIRM" ORIGINCODE. OF THE MISMARKED CONTRACTS, 4,985 OCCURRED ON THEEXCHANGE. UBSW'S EXECUTION OF THE ORDERS WITH INCORRECTORIGIN CODES RESULTED FROM A CONFIGURATION ERROR THAT HADCAUSED THE FIRM'S DEFAULT CODE OF CUSTOMER TO BE INSERTEDINTO THE FINANCIAL INFORMATION EXCHANGE (FIX) TAG 204 FORCERTAIN CUSTOMER ORDERS WHEN THEIR ORDERS WERE PASSED ONTOTHE VARIOUS MARKETS. FIX TAG 204 IS USED FOR OPTIONS WHENDELIVERING THE ORDER TO AN EXECUTION SYSTEM/EXCHANGE TOSPECIFY THE PROPER ORIGIN CODE FOR THE ORDER. EACH INSTANCE INWHICH UBSW EXECUTED AN ORDER WITH AN INCORRECT ORIGIN CODECOULD HAVE HAD ADVERSE CONSEQUENCES, SUCH AS CREATINGINACCURATE ORDER RECORDS, CREATING AN INACCURATE AUDIT TRAIL,INADVERTENTLY IMPACTING THE PRIORITY OF ORDER EXECUTION,REPORTING TRADES TO THE OPTIONS CLEARING CORPORATION (OCC)WITH INACCURATE TRADE DETAILS, AND ADVERSELY IMPACTING THEEXCHANGE'S ABILITY TO SURVEIL FOR AND DETECT POTENTIALVIOLATIONS OF ITS RULES AND FEDERAL SECURITIES LAWS.

THE FINDINGS ALSO STATED THAT UBSW FAILED TO HAVE ANYPROCEDURES FOR ENSURING ORDERS HAD BEEN ENTERED WITH THECORRECT ORIGIN CODES AND FOR CONDUCTING REVIEWS TO DETECTTHAT ORDERS HAD BEEN ENTERED AND EXECUTED WITH INCORRECTORIGIN CODES. IT WAS ONLY THROUGH FINRA'S REVIEW ANDINVESTIGATION THAT UBSW WAS ALERTED TO ITS MISCODINGVIOLATIONS, AND UBSW THEREAFTER TOOK STEPS TO DEVELOP ANDIMPLEMENT RELEVANT SYSTEMS, TRAININGS, AND PROCEDURES. INSUMMARY, UBSW FAILED TO HAVE SUPERVISORY SYSTEMS ANDCONTROLS IN PLACE, INCLUDING A SEPARATE SYSTEM OF FOLLOW-UPAND REVIEW, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHTHE EXCHANGE'S ORIGIN CODE REQUIREMENTS IN THAT THE FIRMFAILED TO DO THE FOLLOWING: (I) REASONABLY ADDRESS ORIGIN CODEREQUIREMENTS IN THE DEVELOPMENT AND PROGRAMMING OF ITSORDER ENTRY SYSTEMS; (II) MAINTAIN WRITTEN SUPERVISORYPROCEDURES REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHTHE EXCHANGE'S RULE RELATING TO THE ASSIGNMENT OF ORIGINCODES; (III) ADEQUATELY TRAIN ITS EMPLOYEES WITH RESPECT TO THESIGNIFICANCE OF PROPERLY MARKING ORIGIN CODES IN ITS ORDERENTRY SYSTEMS; AND (IV) ADEQUATELY SUPERVISE ITS EMPLOYEESWITH RESPECT TO THE PROPER MARKING OF ORIGIN CODES.














WITHOUT ADMITTING OR DENYING THE FINDINGS, UBS SECURITIES LLC(UBSW OR THE FIRM) CONSENTED TO THE SANCTIONS AND TO THEENTRY OF FINDINGS THAT IT EXECUTED NUMEROUS TRANSACTIONSWITH INCORRECT ORIGIN CODES ACROSS MULTIPLE MARKETS,INCLUDING THE EXCHANGE.

THE FINDINGS STATED THAT SPECIFICALLY, FOR SIX CUSTOMERS, UBSWMISMARKED APPROXIMATELY 1,237 EXECUTIONS, TOTALINGAPPROXIMATELY 23,494 OPTIONS CONTRACTS, AS "CUSTOMER",ALTHOUGH THE ORDERS WERE SENT TO UBSW WITH THE "FIRM" ORIGINCODE. OF THE MISMARKED CONTRACTS, 4,985 OCCURRED ON THEEXCHANGE. UBSW'S EXECUTION OF THE ORDERS WITH INCORRECTORIGIN CODES RESULTED FROM A CONFIGURATION ERROR THAT HADCAUSED THE FIRM'S DEFAULT CODE OF CUSTOMER TO BE INSERTEDINTO THE FINANCIAL INFORMATION EXCHANGE (FIX) TAG 204 FORCERTAIN CUSTOMER ORDERS WHEN THEIR ORDERS WERE PASSED ONTOTHE VARIOUS MARKETS. FIX TAG 204 IS USED FOR OPTIONS WHENDELIVERING THE ORDER TO AN EXECUTION SYSTEM/EXCHANGE TOSPECIFY THE PROPER ORIGIN CODE FOR THE ORDER. EACH INSTANCE INWHICH UBSW EXECUTED AN ORDER WITH AN INCORRECT ORIGIN CODECOULD HAVE HAD ADVERSE CONSEQUENCES, SUCH AS CREATINGINACCURATE ORDER RECORDS, CREATING AN INACCURATE AUDIT TRAIL,INADVERTENTLY IMPACTING THE PRIORITY OF ORDER EXECUTION,REPORTING TRADES TO THE OPTIONS CLEARING CORPORATION (OCC)WITH INACCURATE TRADE DETAILS, AND ADVERSELY IMPACTING THEEXCHANGE'S ABILITY TO SURVEIL FOR AND DETECT POTENTIALVIOLATIONS OF ITS RULES AND FEDERAL SECURITIES LAWS.

THE FINDINGS ALSO STATED THAT UBSW FAILED TO HAVE ANYPROCEDURES FOR ENSURING ORDERS HAD BEEN ENTERED WITH THECORRECT ORIGIN CODES AND FOR CONDUCTING REVIEWS TO DETECTTHAT ORDERS HAD BEEN ENTERED AND EXECUTED WITH INCORRECTORIGIN CODES. IT WAS ONLY THROUGH FINRA'S REVIEW ANDINVESTIGATION THAT UBSW WAS ALERTED TO ITS MISCODINGVIOLATIONS, AND UBSW THEREAFTER TOOK STEPS TO DEVELOP ANDIMPLEMENT RELEVANT SYSTEMS, TRAININGS, AND PROCEDURES. INSUMMARY, UBSW FAILED TO HAVE SUPERVISORY SYSTEMS ANDCONTROLS IN PLACE, INCLUDING A SEPARATE SYSTEM OF FOLLOW-UPAND REVIEW, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHTHE EXCHANGE'S ORIGIN CODE REQUIREMENTS IN THAT THE FIRMFAILED TO DO THE FOLLOWING: (I) REASONABLY ADDRESS ORIGIN CODEREQUIREMENTS IN THE DEVELOPMENT AND PROGRAMMING OF ITSORDER ENTRY SYSTEMS; (II) MAINTAIN WRITTEN SUPERVISORYPROCEDURES REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHTHE EXCHANGE'S RULE RELATING TO THE ASSIGNMENT OF ORIGINCODES; (III) ADEQUATELY TRAIN ITS EMPLOYEES WITH RESPECT TO THESIGNIFICANCE OF PROPERLY MARKING ORIGIN CODES IN ITS ORDERENTRY SYSTEMS; AND (IV) ADEQUATELY SUPERVISE ITS EMPLOYEESWITH RESPECT TO THE PROPER MARKING OF ORIGIN CODES.


Resolution:


No










No







CENSURE





Allegations: WITHOUT ADMITTING OR DENYING ANY ALLEGATIONS OR VIOLATIONS,THE FIRM CONSENTED TO FINDINGS, FOR THE PURPOSES OFSETTLEMENT, THAT THE FIRM FAILED TO PLACE THE CORRECT ORIGINCODES ON CERTAIN ORDERS AND FAILED TO PROVIDE AN ADEQUATESYSTEM OF SUPERVISION, INCLUDING WRITTEN PROCEDURES AND ASYSTEM OF FOLLOW-UP AND REVIEW, WITH RESPECT TO COMPLIANCEWITH EXCHANGE RULES AND POLICIES GOVERNING THE USE OFACCOUNT ORIGIN CODES ON ORDERS.UNDER THE OFFER OF SETTLEMENT AND CONSENT, UBS AGREED TO PAYA TOTAL FINE OF $650,000.00, OF WHICH $19,500.00 SHALL BE PAID TONYSE MKT LLC AND THE REMAINING AMOUNT SHALL BE PAID TO CHICAGOBOARD OF OPTIONS EXCHANGE, INC, BOX OPTIONS EXCHANGE LLC,NYSE ARCA, INC.,NASDAQ PHLX LLC,INTERNATIONAL SECURITIESEXCHANGE, LLC. ADDITIONALLY, UBS SECURITIES LLC CONSENTED TO ACENSURE.


Resolution: Acceptance, Waiver & Consent(AWC)120©2022 FINRA. All rights reserved. Report about UBS SECURITIES LLC






Resolution:






i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT SELF-REPORTED THAT IT FAILED TO REPORT OVER-THE-COUNTER (OTC) INDEXOPTIONS POSITIONS TO THE LARGE OPTIONS POSITION REPORTING(LOPR) SYSTEM IN APPROXIMATELY 933,173 INSTANCES, SELF-REPORTEDTHAT IT INACCURATELY REPORTED EFFECTIVE TRADE DATES IN OTCOPTIONS TO THE LOPR IN 74,416 INSTANCES, SELF-REPORTED THAT ITFAILED TO REPORT POSITIONS OF OTC OPTIONS TO THE LOPR IN 7,406INSTANCES DUE TO A SYSTEMS ERROR, SELF-REPORTED THAT IT FAILEDTO REPORT OTC EXCHANGE-TRADED FUND (ETF) OPTIONS POSITIONS TOTHE LOPR IN 1,430 INSTANCES, AND IN 3,436 INSTANCES, SELF-REPORTEDTHAT IT INACCURATELY REPORTED THE TAX ID NUMBER IN OTC OPTIONSPOSITIONS TO THE LOPR. THE FINDINGS STATED THAT IN APPROXIMATELY6,077,014 INSTANCES, THE FIRM INCORRECTLY REPORTED THEMULTIPLIER USED TO CALCULATE THE UNDERLYING EQUITY DELIVEREDBY A CONTRACT IN OTC OPTIONS, IN APPROXIMATELY 461,793 INSTANCES,INACCURATELY REPORTED OTC OPTIONS POSITIONS TO THE LOPR WITHAN INCORRECT ENTRY IN THE TAX ID FIELD, AND IN APPROXIMATELY29,407 INSTANCES, REPORTED POSITIONS ON THE WRONG SIDE OF THEMARKET IN OTC OPTIONS TO THE LOPR. THE FINDINGS ALSO STATEDTHAT THE FIRM FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORYSYSTEM THAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCEWITH THE APPLICABLE SECURITIES LAWS AND REGULATIONS AND FINRARULES RELATED TO THE REPORTING OF POSITIONS TO THE LOPR. INADDITION, THE FIRM'S SUPERVISORY SYSTEM DID NOT INCLUDESUFFICIENT WRITTEN SUPERVISORY PROCEDURES TO ENSURE THEPROPER REPORTING OF POSITIONS TO THE LOPR, SPECIFICALLY ASTATEMENT OF THE SUPERVISORY STEP(S) TO BE TAKEN AND REVIEWSEMPLOYED TO ENSURE THE ACCURACY OF REPORTS MADE IN OTCOPTIONS TO THE LOPR. THE INADEQUATE PROCEDURES RESULTED INMANY OF THE ISSUES NOT BEING DETECTED.







Initiated By: FINRA








Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $2,450,000. FINES PAID IN FULL ON12/20/16.

Regulator Statement IN DETERMINING TO RESOLVE THIS MATTER IN THE MANNER SET FORTHHEREIN, AND IN DETERMINING THE APPROPRIATE MONETARY SANCTION,FINRA CONSIDERED: (I) THAT THE FIRM UNDERTOOK A SIGNIFICANTREVIEW OF ITS LOPR SUBMISSION PROCESSES AND, THROUGH THISREVIEW, SELF-REPORTED SOME OF THE LOPR VIOLATIONS ASSOCIATEDWITH THIS ACTION; AND (II) THAT THE FIRM PROMPTLY REMEDIATED THELOPR VIOLATIONS ONCE DETECTED BY, AMONG OTHER THINGS,CREATING A NEW REGULATORY RISK MANAGEMENT GROUPRESPONSIBLE FOR LOPR AND OTHER REPORTING, AND BY HIRINGADDITIONAL EXPERIENCED STAFF TO CONDUCT SUPERVISORY REVIEWSOF LOPR PROCESSES.


No

Sanctions Ordered: CensureMonetary/Fine $2,450,000.00










Initiated By: FINRA




CENSURE





Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT SELF-REPORTED THAT IT FAILED TO REPORT OVER-THE-COUNTER (OTC) INDEXOPTIONS POSITIONS TO THE LARGE OPTIONS POSITION REPORTING(LOPR) SYSTEM IN APPROXIMATELY 933,173 INSTANCES, SELF-REPORTEDTHAT IT INACCURATELY REPORTED EFFECTIVE TRADE DATES IN OTCOPTIONS TO THE LOPR IN 74,416 INSTANCES, SELF-REPORTED THAT ITFAILED TO REPORT POSITIONS OF OTC OPTIONS TO THE LOPR IN 7,406INSTANCES DUE TO A SYSTEMS ERROR, SELF-REPORTED THAT IT FAILEDTO REPORT OTC EXCHANGE-TRADED FUND (ETF) OPTIONS POSITIONS TOTHE LOPR IN 1,430 INSTANCES, AND IN 3,436 INSTANCES, SELF-REPORTEDTHAT IT INACCURATELY REPORTED THE TAX ID NUMBER IN OTC OPTIONSPOSITIONS TO THE LOPR. THE FINDINGS STATED THAT IN APPROXIMATELY6,077,014 INSTANCES, THE FIRM INCORRECTLY REPORTED THEMULTIPLIER USED TO CALCULATE THE UNDERLYING EQUITY DELIVEREDBY A CONTRACT IN OTC OPTIONS, IN APPROXIMATELY 461,793 INSTANCES,INACCURATELY REPORTED OTC OPTIONS POSITIONS TO THE LOPR WITHAN INCORRECT ENTRY IN THE TAX ID FIELD, AND IN APPROXIMATELY29,407 INSTANCES, REPORTED POSITIONS ON THE WRONG SIDE OF THEMARKET IN OTC OPTIONS TO THE LOPR. THE FINDINGS ALSO STATEDTHAT THE FIRM FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORYSYSTEM THAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCEWITH THE APPLICABLE SECURITIES LAWS AND REGULATIONS AND FINRARULES RELATED TO THE REPORTING OF POSITIONS TO THE LOPR. INADDITION, THE FIRM'S SUPERVISORY SYSTEM DID NOT INCLUDESUFFICIENT WRITTEN SUPERVISORY PROCEDURES TO ENSURE THEPROPER REPORTING OF POSITIONS TO THE LOPR, SPECIFICALLY ASTATEMENT OF THE SUPERVISORY STEP(S) TO BE TAKEN AND REVIEWSEMPLOYED TO ENSURE THE ACCURACY OF REPORTS MADE IN OTCOPTIONS TO THE LOPR. THE INADEQUATE PROCEDURES RESULTED INMANY OF THE ISSUES NOT BEING DETECTED.









Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $2,450,000

Firm Statement IN DETERMINING TO RESOLVE THIS MATTER IN THE MANNER SET FORTHHEREIN, AND IN DETERMINING THE APPROPRIATE MONETARY SANCTION,FINRA CONSIDERED: (I) THAT THE FIRM UNDERTOOK A SIGNIFICANTREVIEW OF ITS LOPR SUBMISSION PROCESSES AND, THROUGH THISREVIEW, SELF-REPORTED SOME OF THE LOPR VIOLATIONS ASSOCIATEDWITH THIS ACTION; AND (II) THAT THE FIRM PROMPTLY REMEDIATED THELOPR VIOLATIONS ONCE DETECTED BY, AMONG OTHER THINGS,CREATING A NEW REGULATORY RISK MANAGEMENT GROUPRESPONSIBLE FOR LOPR AND OTHER REPORTING, AND BY HIRINGADDITIONAL EXPERIENCED STAFF TO CONDUCT SUPERVISORY REVIEWSOF LOPR PROCESSES.




i


Initiated By: CBOE FUTURES EXCHANGE LLC





Docket/Case Number: ICT 109060

Principal Product Type: Futures - Financial


Allegations: CBOE FUTURES EXCHANGE ALLEGED THAT UBS FAILED TO PROPERLYDOCUMENT ECRP TRADE ACTIVITY ON A CUSTOMERS ACCOUNTSTATEMENT DATED 1/26/2015.



Resolution:


Decision







Sanction Details: $5000 FINE AND A $100 FORUM FEE



i


Initiated By: FINRA


Other


N/A





Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TODISCLOSE ON THE WRITTEN NOTIFICATION TO ITS CUSTOMER ITSCORRECT CAPACITY IN THE TRANSACTION, BY ERRONEOUSLY NOTINGTHAT THE FIRM ACTED IN AN AGENCY CAPACITY WHEN IT ACTED IN ARISKLESS PRINCIPAL CAPACITY. THE FINDINGS STATED THAT THEINACCURATE CAPACITY DESIGNATIONS ON THE CONFIRMATIONS AROSEFROM A SYSTEMS CONFIGURATION ERROR WHEN THE FIRM'S PROGRAMTRADING DESK SWITCHED ORDER MANAGEMENT SYSTEMS. THESYSTEMS CONFIGURATION ERROR RESULTING IN THE INACCURATECAPACITY INFORMATION AFFECTED CONFIRMATIONS ISSUED TOCUSTOMERS/CLIENTS SEEKING SETTLEMENT DATES OTHER THAN BYREGULAR-WAY WHOSE ORDERS WERE HANDLED BY THE PROGRAMTRADING DESK. THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDEFOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCEWITH RESPECT TO CERTAIN APPLICABLE SECURITIES LAWS ANDREGULATIONS AND THE RULES OF FINRA. AT A MINIMUM, ADEQUATE WSPSADDRESSING QUALITY OF MARKETS TOPICS SHOULD DESCRIBE SPECIFICIDENTIFICATION OF THE INDIVIDUAL(S) RESPONSIBLE FOR SUPERVISION;THE SUPERVISORY STEPS AND REVIEWS TO BE TAKEN BY THEAPPROPRIATE SUPERVISOR; THE FREQUENCY OF SUCH REVIEWS ANDHOW SUCH REVIEWS SHALL BE DOCUMENTED.









Resolution:


Sanction Details: THE FIRM WAS CENSURED, FINED $110,000, AND REQUIRED TO REVISE ITSWSPS.

FINE PAID IN FULL ON JUNE 28, 2016.


No




Initiated By: FINRA








Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TODISCLOSE ON THE WRITTEN CONFIRMATIONS SENT TO CERTAINCUSTOMERS ITS CORRECT CAPACITY IN THE TRANSACTION, BYERRONEOUSLY NOTING THAT THE FIRM ACTED IN AN AGENCY CAPACITYWHEN IT ACTED IN A RISKLESS PRINCIPAL CAPACITY. THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TOCERTAIN APPLICABLE SECURITIES LAWS AND REGULATIONS AND THERULES OF FINRA.










Resolution:


Sanction Details: THE FIRM WAS CENSURED, FINED $110,000, AND REQUIRED TO REVISE ITSWSPS.




i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THIS MATTERIS PART OF AN INVESTIGATION THAT INITIALLY FOCUSED ON THE FIRM'SFAILURE ACROSS MULTIPLE DESKS WITHIN THE REVIEW PERIOD TOREASONABLY PREVENT THE ENTRY OF CERTAIN ERRONEOUS EQUITY OROPTIONS ORDERS SENT TO THE NEW YORK STOCK EXCHANGE (NYSE),NYSE ARCA, INC. (NYSE ARCA EQUITIES), NYSE MKT LLC (NYSE MKT), THENASDAQ STOCK MARKET LLC (NASDAQ), NASDAQ OMX PHLX LLC (PHLX),BATS EXCHANGE, INC. (BZX), BATS Y-EXCHANGE, INC. (BYX), AND EDGXEXCHANGE, INC. (EDGX) (COLLECTIVELY THE EXCHANGES). AS A RESULTOF THE INVESTIGATION, FINRA'S DEPARTMENT OF MARKET REGULATIONDETERMINED THAT THE FIRM FAILED TO HAVE FINANCIAL RISKMANAGEMENT CONTROLS REASONABLY DESIGNED TO PREVENT THETRANSMISSION OF NUMEROUS ERRONEOUS EQUITY OR OPTIONSORDERS, AND ORDERS THAT EXCEEDED APPROPRIATE PRE-SET CREDITTHRESHOLDS IN THE AGGREGATE FOR ITS CUSTOMERS. ADDITIONALLY,THE FIRM FAILED TO HAVE ADEQUATE SUPERVISORY PROCEDURESDESIGNED TO MANAGE THE FINANCIAL, REGULATORY, AND OTHER RISKSOF MARKET ACCESS. SPECIFICALLY, DURING THE REVIEW PERIOD, UBSVIOLATED SECURITIES EXCHANGE ACT OF 1934 RULE 15C3-5(C), ANDNYSE RULES 342, 3110 AND 2010 WHEN IT FAILED TO ESTABLISH, MAINTAINAND ENFORCE A SYSTEM OF RISK MANAGEMENT CONTROLS ANDSUPERVISORY PROCEDURES REASONABLY DESIGNED TO PREVENT THEENTRY OF ERRONEOUS EQUITY OR OPTIONS ORDERS, BY REJECTINGORDERS THAT EXCEEDED APPROPRIATE PRICE OR SIZE PARAMETERS,ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIOD OF TIME, ORTHAT INDICATED DUPLICATIVE ORDERS. ADDITIONALLY, FROM NOVEMBER30, 2011 THROUGH MARCH 2015, UBS VIOLATED SECURITIES EXCHANGEACT OF 1934 RULE 15C3-5(C)(1)(I), AND NYSE RULES 342, 3110 AND 2010WHEN IT FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OFRISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO PREVENT THE ENTRY OF ORDERS THATEXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDS IN THEAGGREGATE FOR ITS CUSTOMERS. FURTHERMORE, FROM FEBRUARY2014 TO JULY 2015, UBS VIOLATED SECURITIES EXCHANGE ACT OF 1934RULE 15C3-5(D), AND NYSE RULES 342, 3110 AND 2010 WHEN IT APPLIEDCONTROLS TO TWO SPONSORED ACCESS CLIENT FLOWS THAT WERENOT DEVELOPED INDEPENDENTLY OF SUCH CLIENTS. FINALLY, DURINGTHE REVIEW PERIOD, UBS VIOLATED SECURITIES EXCHANGE ACT OF 1934RULE 15C3-5(B), AND NYSE RULES 342, 3110 AND 2010 WHEN IT FAILED TOESTABLISH, MAINTAIN AND PRESERVE AN ADEQUATE WRITTENDESCRIPTION OF ITS RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES IN CONNECTION WITH EQUITY AND OPTION ERRONEOUSORDER CONTROLS, AND PRE-SET CREDIT THRESHOLDS FOR EQUITIESAND OPTIONS CLIENTELE.













Other Product Type(s): EQUITY ORDERS

WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THIS MATTERIS PART OF AN INVESTIGATION THAT INITIALLY FOCUSED ON THE FIRM'SFAILURE ACROSS MULTIPLE DESKS WITHIN THE REVIEW PERIOD TOREASONABLY PREVENT THE ENTRY OF CERTAIN ERRONEOUS EQUITY OROPTIONS ORDERS SENT TO THE NEW YORK STOCK EXCHANGE (NYSE),NYSE ARCA, INC. (NYSE ARCA EQUITIES), NYSE MKT LLC (NYSE MKT), THENASDAQ STOCK MARKET LLC (NASDAQ), NASDAQ OMX PHLX LLC (PHLX),BATS EXCHANGE, INC. (BZX), BATS Y-EXCHANGE, INC. (BYX), AND EDGXEXCHANGE, INC. (EDGX) (COLLECTIVELY THE EXCHANGES). AS A RESULTOF THE INVESTIGATION, FINRA'S DEPARTMENT OF MARKET REGULATIONDETERMINED THAT THE FIRM FAILED TO HAVE FINANCIAL RISKMANAGEMENT CONTROLS REASONABLY DESIGNED TO PREVENT THETRANSMISSION OF NUMEROUS ERRONEOUS EQUITY OR OPTIONSORDERS, AND ORDERS THAT EXCEEDED APPROPRIATE PRE-SET CREDITTHRESHOLDS IN THE AGGREGATE FOR ITS CUSTOMERS. ADDITIONALLY,THE FIRM FAILED TO HAVE ADEQUATE SUPERVISORY PROCEDURESDESIGNED TO MANAGE THE FINANCIAL, REGULATORY, AND OTHER RISKSOF MARKET ACCESS. SPECIFICALLY, DURING THE REVIEW PERIOD, UBSVIOLATED SECURITIES EXCHANGE ACT OF 1934 RULE 15C3-5(C), ANDNYSE RULES 342, 3110 AND 2010 WHEN IT FAILED TO ESTABLISH, MAINTAINAND ENFORCE A SYSTEM OF RISK MANAGEMENT CONTROLS ANDSUPERVISORY PROCEDURES REASONABLY DESIGNED TO PREVENT THEENTRY OF ERRONEOUS EQUITY OR OPTIONS ORDERS, BY REJECTINGORDERS THAT EXCEEDED APPROPRIATE PRICE OR SIZE PARAMETERS,ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIOD OF TIME, ORTHAT INDICATED DUPLICATIVE ORDERS. ADDITIONALLY, FROM NOVEMBER30, 2011 THROUGH MARCH 2015, UBS VIOLATED SECURITIES EXCHANGEACT OF 1934 RULE 15C3-5(C)(1)(I), AND NYSE RULES 342, 3110 AND 2010WHEN IT FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OFRISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO PREVENT THE ENTRY OF ORDERS THATEXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDS IN THEAGGREGATE FOR ITS CUSTOMERS. FURTHERMORE, FROM FEBRUARY2014 TO JULY 2015, UBS VIOLATED SECURITIES EXCHANGE ACT OF 1934RULE 15C3-5(D), AND NYSE RULES 342, 3110 AND 2010 WHEN IT APPLIEDCONTROLS TO TWO SPONSORED ACCESS CLIENT FLOWS THAT WERENOT DEVELOPED INDEPENDENTLY OF SUCH CLIENTS. FINALLY, DURINGTHE REVIEW PERIOD, UBS VIOLATED SECURITIES EXCHANGE ACT OF 1934RULE 15C3-5(B), AND NYSE RULES 342, 3110 AND 2010 WHEN IT FAILED TOESTABLISH, MAINTAIN AND PRESERVE AN ADEQUATE WRITTENDESCRIPTION OF ITS RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES IN CONNECTION WITH EQUITY AND OPTION ERRONEOUSORDER CONTROLS, AND PRE-SET CREDIT THRESHOLDS FOR EQUITIESAND OPTIONS CLIENTELE.


Resolution:

Other Sanctions Ordered: UNDERTAKING: ADDRESS THE MARKET ACCESS RULE DEFICIENCIESDESCRIBED ABOVE TO ENSURE THAT THE FIRM HAS IMPLEMENTEDPROCEDURES THAT ARE REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH THE RULES AND REGULATIONS CITED HEREIN


No








UNDERTAKING: ADDRESS THE MARKET ACCESS RULE DEFICIENCIESDESCRIBED ABOVE TO ENSURE THAT THE FIRM HAS IMPLEMENTEDPROCEDURES THAT ARE REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH THE RULES AND REGULATIONS CITED HEREIN

Sanction Details: THE FIRM WAS CENSURED, FINED AN AGGREGATE FINE OF $1,250,000, OFWHICH $100,000 SHALL BE PAID TO NYSE AND UNDERTAKES TO ADDRESSTHE MARKET ACCESS RULE DEFICIENCIES DESCRIBED ABOVE TOENSURE THAT THE FIRM HAS IMPLEMENTED PROCEDURES THAT AREREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE RULES ANDREGULATIONS CITED HEREIN. ACCEPTANCE OF THIS AWC ISCONDITIONED UPON ACCEPTANCE OF SIMILAR SETTLEMENTAGREEMENTS IN RELATED MATTERS BETWEEN UBS AND EACH OF THEFOLLOWING SELF-REGULATORY ORGANIZATIONS: NYSE REGULATION,INC. ON BEHALF OF NYSE ARCA, INC., AND NYSE MKT LLC (NYSE MKTEQUITIES AND NYSE MKT OPTIONS MARKETS); THE NASDAQ STOCKMARKET LLC; NASDAQ OMX PHLX LLC; BATS EXCHANGE, INC.; BATS Y-EXCHANGE, INC.; EDGX EXCHANGE, INC.; AND FINRA.

Regulator Statement IN DETERMINING TO RESOLVE THIS MATTER IN THE MANNER SET FORTHHEREIN, FINRA'S DEPARTMENT OF MARKET REGULATION TOOK INTOCONSIDERATION THAT, UBS, ON ITS OWN ACCORD, ENGAGED AN OUTSIDECONSULTANT TO REVIEW AND MAKE RECOMMENDATIONS TO ENHANCECONTROLS AND PROCEDURES WITH RESPECT TO CERTAIN ASPECTS OFTHE FIRM'S MARKET ACCESS CONTROLS AND RELATED SUPERVISORYPROCEDURES FOR COMPLIANCE WITH SECURITIES EXCHANGE ACT OF1934 RULE 15C3-5.


Allegations: FINRA'S DEPARTMENT OF MARKET REGULATION (THE STAFF), ON BEHALFOF NEW YORK STOCK EXCHANGE AS WELL AS VARIOUS OTHERSECURITIES EXCHANGES AND FINRA, CONDUCTED A REVIEW OF THEFIRM'S COMPLIANCE WITH SEC RULE 15C3-5 AND NYSE RULES 342, 3110AND 2010 DURING THE REVIEW PERIOD BEGINNING ON JULY 14, 2011, ANDCONTINUING THROUGH AT LEAST JULY 2015. AS A RESULT OF THEINVESTIGATION, THE STAFF DETERMINED THAT UBS FAILED TO HAVEFINANCIAL RISK MANAGEMENT CONTROLS REASONABLY DESIGNED TOPREVENT THE TRANSMISSION OF NUMEROUSERRONEOUS EQUITY OR OPTIONS ORDERS, AND ORDERS THATEXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDS IN THEAGGREGATE FOR ITS CUSTOMERS. ADDITIONALLY, UBS FAILED TO HAVEADEQUATE SUPERVISORY PROCEDURES DESIGNED TO MANAGE THEFINANCIAL, REGULATORY, AND OTHER RISKS OF MARKET ACCESS.SPECIFICALLY, DURING THE REVIEW PERIOD, UBS VIOLATED SEC RULE15C3-5(C) AND NYSE RULES 342, 3110 AND 2010 WHEN IT FAILED TOESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OF RISK MANAGEMENTCONTROLS AND SUPERVISORY PROCEDURES REASONABLY DESIGNEDTO PREVENT THE ENTRY OF ERRONEOUS EQUITY OR OPTIONS ORDERS,BY REJECTING ORDERS THAT EXCEEDED APPROPRIATE PRICE OR SIZEPARAMETERS, ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIODOF TIME, OR THAT INDICATED DUPLICATIVE ORDERS.











CENSURE, UNDERTAKING





FINRA'S DEPARTMENT OF MARKET REGULATION (THE STAFF), ON BEHALFOF NEW YORK STOCK EXCHANGE AS WELL AS VARIOUS OTHERSECURITIES EXCHANGES AND FINRA, CONDUCTED A REVIEW OF THEFIRM'S COMPLIANCE WITH SEC RULE 15C3-5 AND NYSE RULES 342, 3110AND 2010 DURING THE REVIEW PERIOD BEGINNING ON JULY 14, 2011, ANDCONTINUING THROUGH AT LEAST JULY 2015. AS A RESULT OF THEINVESTIGATION, THE STAFF DETERMINED THAT UBS FAILED TO HAVEFINANCIAL RISK MANAGEMENT CONTROLS REASONABLY DESIGNED TOPREVENT THE TRANSMISSION OF NUMEROUSERRONEOUS EQUITY OR OPTIONS ORDERS, AND ORDERS THATEXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDS IN THEAGGREGATE FOR ITS CUSTOMERS. ADDITIONALLY, UBS FAILED TO HAVEADEQUATE SUPERVISORY PROCEDURES DESIGNED TO MANAGE THEFINANCIAL, REGULATORY, AND OTHER RISKS OF MARKET ACCESS.SPECIFICALLY, DURING THE REVIEW PERIOD, UBS VIOLATED SEC RULE15C3-5(C) AND NYSE RULES 342, 3110 AND 2010 WHEN IT FAILED TOESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OF RISK MANAGEMENTCONTROLS AND SUPERVISORY PROCEDURES REASONABLY DESIGNEDTO PREVENT THE ENTRY OF ERRONEOUS EQUITY OR OPTIONS ORDERS,BY REJECTING ORDERS THAT EXCEEDED APPROPRIATE PRICE OR SIZEPARAMETERS, ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIODOF TIME, OR THAT INDICATED DUPLICATIVE ORDERS.


Resolution:


Sanction Details: UNDER THE OFFER OF SETTLEMENT AND CONSENT, UBS AGREED TO PAYA TOTAL FINE OF $1,250.000, OF WHICH $100,000.00 SHALL BE PAID TONEW YORK STOCK EXCHANGE AND THE REMAINING AMOUNT SHALL BEPAID TO (I) NYSE MKT LLC OPTIONS MARKET; (II) NYSE MKT LLC EQUITIESMARKET; (III) THE NASDAQ STOCK MARKET LLC; (IV) NASDAQ OMX PHLXLLC; (V) BATS Z-EXCHANGE, INC.; (VI) BATS Y-EXCHANGE, INC.; (VII)NYSEARCA INC. ; (VIII)FINRA; AND (IX) EDGX EXCHANGE INC.IN ACCORDANCE WITH THE TERMSOF PARALLEL SETTLEMENT AGREEMENTS IN RELATED MATTERS.ADDITIONALLY, UBS SECURITIES LLC CONSENTED TO A CENSURE, AND ANUNDERTAKING.




i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THIS MATTERIS PART OF AN INVESTIGATION THAT INITIALLY FOCUSED ON THE FIRM'SFAILURE ACROSS MULTIPLE DESKS WITHIN THE REVIEW PERIOD TOREASONABLY PREVENT THE ENTRY OF CERTAIN ERRONEOUS EQUITY OROPTIONS ORDERS SENT TO BATS EXCHANGE, INC. (BZX), BATS Y-EXCHANGE, INC. (BYX), EDGX EXCHANGE, INC. (EDGX), THE NEW YORKSTOCK EXCHANGE LLC (NYSE), NYSE ARCA, INC. (NYSE ARCA EQUITIES),NYSE MKT LLC (NYSE MKT), THE NASDAQ STOCK MARKET LLC (NASDAQ),AND NASDAQ OMX PHLX LLC (PHLX) (COLLECTIVELY THE EXCHANGES). ASA RESULT OF THE INVESTIGATION, FINRA'S DEPARTMENT OF MARKETREGULATION DETERMINED THAT THE FIRM FAILED TO HAVE FINANCIALRISK MANAGEMENT CONTROLS REASONABLY DESIGNED TO PREVENTTHE TRANSMISSION OF NUMEROUS ERRONEOUS EQUITY OR OPTIONSORDERS, AND ORDERS THAT EXCEEDED APPROPRIATE PRE-SET CREDITTHRESHOLDS IN THE AGGREGATE FOR ITS CUSTOMERS. ADDITIONALLY,THE FIRM FAILED TO HAVE ADEQUATE SUPERVISORY PROCEDURESDESIGNED TO MANAGE THE FINANCIAL, REGULATORY, AND OTHER RISKSOF MARKET ACCESS. SPECIFICALLY, DURING THE REVIEW PERIOD, UBSVIOLATED SECURITIES EXCHANGE ACT OF 1934 RULE 15C3-5(C), AND BZXRULES 3.1 AND 5.1 WHEN IT FAILED TO ESTABLISH, MAINTAIN ANDENFORCE A SYSTEM OF RISK MANAGEMENT CONTROLS ANDSUPERVISORY PROCEDURES REASONABLY DESIGNED TO PREVENT THEENTRY OF ERRONEOUS EQUITY OR OPTIONS ORDERS, BY REJECTINGORDERS THAT EXCEEDED APPROPRIATE PRICE OR SIZE PARAMETERS,ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIOD OF TIME, ORTHAT INDICATED DUPLICATIVE ORDERS. ADDITIONALLY, FROM NOVEMBER30, 2011 THROUGH MARCH 2015, UBS VIOLATED SECURITIES EXCHANGEACT OF 1934 RULE 15C3-5(C)(1)(I), AND BZX RULES 3.1 AND 5.1 WHEN ITFAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OF RISKMANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO PREVENT THE ENTRY OF ORDERS THATEXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDS IN THEAGGREGATE FOR ITS CUSTOMERS. FURTHERMORE, FROM FEBRUARY2014 TO JULY 2015, UBS VIOLATED SECURITIES EXCHANGE ACT OF 1934RULE 15C3-5(D), AND BZX RULES 3.1 AND 5.1 WHEN IT APPLIED CONTROLSTO TWO SPONSORED ACCESS CLIENT FLOWS THAT WERE NOTDEVELOPED INDEPENDENTLY OF SUCH CLIENTS. FINALLY, DURING THEREVIEW PERIOD, UBS VIOLATED SECURITIES EXCHANGE ACT OF 1934RULE 15C3-5(B), AND BZX RULES 3.1 AND 5.1 WHEN IT FAILED TOESTABLISH, MAINTAIN AND PRESERVE AN ADEQUATE WRITTENDESCRIPTION OF ITS RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES IN CONNECTION WITH EQUITY AND OPTION ERRONEOUSORDER CONTROLS, AND PRE-SET CREDIT THRESHOLDS FOR EQUITIESAND OPTIONS CLIENTELE.







Initiated By: BATS Z-EXCHANGE, INC.

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THIS MATTERIS PART OF AN INVESTIGATION THAT INITIALLY FOCUSED ON THE FIRM'SFAILURE ACROSS MULTIPLE DESKS WITHIN THE REVIEW PERIOD TOREASONABLY PREVENT THE ENTRY OF CERTAIN ERRONEOUS EQUITY OROPTIONS ORDERS SENT TO BATS EXCHANGE, INC. (BZX), BATS Y-EXCHANGE, INC. (BYX), EDGX EXCHANGE, INC. (EDGX), THE NEW YORKSTOCK EXCHANGE LLC (NYSE), NYSE ARCA, INC. (NYSE ARCA EQUITIES),NYSE MKT LLC (NYSE MKT), THE NASDAQ STOCK MARKET LLC (NASDAQ),AND NASDAQ OMX PHLX LLC (PHLX) (COLLECTIVELY THE EXCHANGES). ASA RESULT OF THE INVESTIGATION, FINRA'S DEPARTMENT OF MARKETREGULATION DETERMINED THAT THE FIRM FAILED TO HAVE FINANCIALRISK MANAGEMENT CONTROLS REASONABLY DESIGNED TO PREVENTTHE TRANSMISSION OF NUMEROUS ERRONEOUS EQUITY OR OPTIONSORDERS, AND ORDERS THAT EXCEEDED APPROPRIATE PRE-SET CREDITTHRESHOLDS IN THE AGGREGATE FOR ITS CUSTOMERS. ADDITIONALLY,THE FIRM FAILED TO HAVE ADEQUATE SUPERVISORY PROCEDURESDESIGNED TO MANAGE THE FINANCIAL, REGULATORY, AND OTHER RISKSOF MARKET ACCESS. SPECIFICALLY, DURING THE REVIEW PERIOD, UBSVIOLATED SECURITIES EXCHANGE ACT OF 1934 RULE 15C3-5(C), AND BZXRULES 3.1 AND 5.1 WHEN IT FAILED TO ESTABLISH, MAINTAIN ANDENFORCE A SYSTEM OF RISK MANAGEMENT CONTROLS ANDSUPERVISORY PROCEDURES REASONABLY DESIGNED TO PREVENT THEENTRY OF ERRONEOUS EQUITY OR OPTIONS ORDERS, BY REJECTINGORDERS THAT EXCEEDED APPROPRIATE PRICE OR SIZE PARAMETERS,ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIOD OF TIME, ORTHAT INDICATED DUPLICATIVE ORDERS. ADDITIONALLY, FROM NOVEMBER30, 2011 THROUGH MARCH 2015, UBS VIOLATED SECURITIES EXCHANGEACT OF 1934 RULE 15C3-5(C)(1)(I), AND BZX RULES 3.1 AND 5.1 WHEN ITFAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OF RISKMANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO PREVENT THE ENTRY OF ORDERS THATEXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDS IN THEAGGREGATE FOR ITS CUSTOMERS. FURTHERMORE, FROM FEBRUARY2014 TO JULY 2015, UBS VIOLATED SECURITIES EXCHANGE ACT OF 1934RULE 15C3-5(D), AND BZX RULES 3.1 AND 5.1 WHEN IT APPLIED CONTROLSTO TWO SPONSORED ACCESS CLIENT FLOWS THAT WERE NOTDEVELOPED INDEPENDENTLY OF SUCH CLIENTS. FINALLY, DURING THEREVIEW PERIOD, UBS VIOLATED SECURITIES EXCHANGE ACT OF 1934RULE 15C3-5(B), AND BZX RULES 3.1 AND 5.1 WHEN IT FAILED TOESTABLISH, MAINTAIN AND PRESERVE AN ADEQUATE WRITTENDESCRIPTION OF ITS RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES IN CONNECTION WITH EQUITY AND OPTION ERRONEOUSORDER CONTROLS, AND PRE-SET CREDIT THRESHOLDS FOR EQUITIESAND OPTIONS CLIENTELE.













Resolution:


Sanction Details: THE FIRM WAS CENSURED, FINED AN AGGREGATE FINE OF $1,250,000, OFWHICH $200,000 SHALL BE PAID TO BZX AND UNDERTAKES TO ADDRESSTHE MARKET ACCESS RULE DEFICIENCIES DESCRIBED ABOVE TOENSURE THAT THE FIRM HAS IMPLEMENTED PROCEDURES THAT AREREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE RULES ANDREGULATIONS CITED HEREIN. ACCEPTANCE OF THIS AWC ISCONDITIONED UPON ACCEPTANCE OF SIMILAR SETTLEMENTAGREEMENTS IN RELATED MATTERS BETWEEN UBS AND EACH OF THEFOLLOWING SELF-REGULATORY ORGANIZATIONS: BATS Y-EXCHANGE,INC.; EDGX EXCHANGE, INC.; NYSE REGULATION, INC. ON BEHALF OF THENEW YORK STOCK EXCHANGE LLC, NYSE MKT LLC (NYSE MKT EQUITIESAND NYSE MKT OPTIONS MARKETS), AND NYSE ARCA, INC.; THE NASDAQSTOCK MARKET LLC; NASDAQ OMX PHLX LLC; AND FINRA.



No







www.finra.org/brokercheck User GuidanceIN DETERMINING TO RESOLVE THIS MATTER IN THE MANNER SET FORTHHEREIN, FINRA'S DEPARTMENT OF MARKET REGULATION TOOK INTOCONSIDERATION THAT, UBS, ON ITS OWN ACCORD, ENGAGED AN OUTSIDECONSULTANT TO REVIEW AND MAKE RECOMMENDATIONS TO ENHANCECONTROLS AND PROCEDURES WITH RESPECT TO CERTAIN ASPECTS OFTHE FIRM'S MARKET ACCESS CONTROLS AND RELATED SUPERVISORYPROCEDURES FOR COMPLIANCE WITH SECURITIES EXCHANGE ACT OF1934 RULE 15C3-5.


Initiated By: BATS Z-EXCHANGE, INC.









Allegations: FINRA'S DEPARTMENT OF MARKET REGULATION (THE STAFF), ON BEHALFOF BATS Z-EXCHANGE, INC. AS WELL AS VARIOUS OTHER SECURITIESEXCHANGES AND FINRA, CONDUCTED A REVIEW OF THE FIRM'SCOMPLIANCE WITH SEC RULE 15C3-5 AND BZX RULES 3.1 AND 5.1 DURINGTHE REVIEW PERIOD BEGINNING ON JULY 14, 2011, AND CONTINUINGTHROUGH AT LEAST JULY 2015. AS A RESULT OF THE INVESTIGATION, THESTAFF DETERMINED THAT UBS FAILED TO HAVE FINANCIAL RISKMANAGEMENT CONTROLS REASONABLY DESIGNED TO PREVENT THETRANSMISSION OF NUMEROUSERRONEOUS EQUITY OR OPTIONS ORDERS, AND ORDERS THATEXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDS IN THEAGGREGATE FOR ITS CUSTOMERS. ADDITIONALLY, UBS FAILED TO HAVEADEQUATE SUPERVISORY PROCEDURES DESIGNED TO MANAGE THEFINANCIAL, REGULATORY, AND OTHER RISKS OF MARKET ACCESS.SPECIFICALLY, DURING THE REVIEW PERIOD, UBS VIOLATED SEC RULE15C3-5(C) AND BZX RULES 3.1 AND 5.1 WHEN IT FAILED TO ESTABLISH,MAINTAIN AND ENFORCE A SYSTEM OF RISK MANAGEMENT CONTROLSAND SUPERVISORY PROCEDURES REASONABLYDESIGNED TO PREVENT THE ENTRY OF ERRONEOUS EQUITY OR OPTIONSORDERS, BY REJECTING ORDERS THAT EXCEEDED APPROPRIATE PRICEOR SIZE PARAMETERS, ON AN ORDER-BY-ORDER BASIS OR OVER ASHORT PERIOD OF TIME, OR THAT INDICATED DUPLICATIVE ORDERS.








Resolution:


Sanction Details: UNDER THE OFFER OF SETTLEMENT AND CONSENT, UBS AGREED TO PAYA TOTAL FINE OF $1,250.000, OF WHICH $200,000.00 SHALL BE PAID TOBATS Z-EXCHANGE, INC. AND THE REMAINING AMOUNT SHALL BE PAID TO(I) NYSE MKT LLC OPTIONS MARKET; (II) NYSE MKT LLC EQUITIES MARKET;(III) THE NASDAQ STOCK MARKET LLC; (IV) NASDAQ OMX PHLX LLC; (V)BATS Y EXCHANGE, INC.; (VI)EDGX EXCHANGE, INC. (VII)NYSE ARCA INC. ;(VIII) FINRA; AND (IX) NEW YORK STOCK EXCHANGE IN ACCORDANCE WITHTHE TERMS OF PARALLEL SETTLEMENT AGREEMENTS IN RELATEDMATTERS.ADDITIONALLY, UBS SECURITIES LLC CONSENTED TO A CENSURE, AND ANUNDERTAKING.




i


Allegations: THIS MATTER IS PART OF AN INVESTIGATION THAT INITIALLY FOCUSED ONTHE FIRM'S FAILURE ACROSS MULTIPLE DESKS WITHIN THE REVIEWPERIOD TO REASONABLY PREVENT THE ENTRY OF CERTAIN ERRONEOUSEQUITY OR OPTIONS ORDERS SENT TO NYSE MKT, NYSE ARCA, INC.(NYSE ARCA EQUITIES), THE NEW YORK STOCK EXCHANGE LLC (NYSE),THE NASDAQ STOCK MARKET LLC (NASDAQ), NASDAQ OMX PHLX LLC(PHLX), BATS EXCHANGE, INC. (BZX", BATS Y-EXCHANGE, INC. (BYX), ANDEDGX EXCHANGE, INC. (EDGX) (COLLECTIVELY THE EXCHANGES). AS ARESULT OF THE INVESTIGATION, FINRA'S DEPARTMENT OF MARKETREGULATION DETERMINED THAT UBS FAILED TO HAVE FINANCIAL RISKMANAGEMENT CONTROLS REASONABLY DESIGNED TO PREVENT THETRANSMISSION OF NUMEROUS ERRONEOUS EQUITY OR OPTIONSORDERS, AND ORDERS THAT EXCEEDED APPROPRIATE PRE-SET CREDITTHRESHOLDS IN THE AGGREGATE FOR ITS CUSTOMERS. ADDITIONALLY,UBS FAILED TO HAVE ADEQUATE SUPERVISORY PROCEDURES DESIGNEDTO MANAGE THE FINANCIAL, REGULATORY, AND OTHER RISKS OFMARKET ACCESS. SPECIFICALLY, DURING THE REVIEW PERIOD, UBSVIOLATED SEC RULE 15C3-5(C) AND NYSE MKT RULES 342-EQUITIES, 3110-EQUITIES AND 2010-EQUITIES WHEN IT FAILED TO ESTABLISH, MAINTAINAND ENFORCE A SYSTEM OF RISK MANAGEMENT CONTROLS ANDSUPERVISORY PROCEDURES REASONABLY DESIGNED TO PREVENT THEENTRY OF ERRONEOUS EQUITY OR OPTIONS ORDERS, BY REJECTINGORDERS THAT EXCEEDED APPROPRIATE PRICE OR SIZE PARAMETERS,ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIOD OF TIME, ORTHAT INDICATED DUPLICATIVE ORDERS. FROM NOVEMBER 30, 2011,THROUGH MARCH 2015, UBS VIOLATED SEC RULE 15C3-5(C)(1)(I) ANDNYSE MKT RULES 342-EQUITIES, 3110-EQUITIES AND 2010-EQUITIES WHENIT FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OF RISKMANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO PREVENT THE ENTRY OF ORDERS THATEXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDS IN THEAGGREGATE FOR ITS CUSTOMERS. FROM FEBRUARY 2014 TO JULY 2015,UBS VIOLATED SEC RULE 15C3-5(D) AND NYSE MKT RULES 342-EQUITIES,3110-EQUITIES AND 2010-EQUITIES WHEN IT APPLIED CONTROLS TO TWOSPONSORED ACCESS CLIENT FLOWS THAT WERE NOT DEVELOPEDINDEPENDENTLY OF SUCH CLIENTS. FINALLY, DURING THE REVIEWPERIOD, UBS VIOLATED SEC RULE 15C3-5(B) AND NYSE MKT RULES 342-EQUITIES, 3110-EQUITIES AND 2010-EQUITIES WHEN IT FAILED TOESTABLISH, MAINTAIN AND PRESERVE AN ADEQUATE WRITTENDESCRIPTION OF ITS RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES IN CONNECTION WITH EQUITY AND OPTION ERRONEOUSORDER CONTROLS, AND PRE-SET CREDIT THRESHOLDS FOR EQUITIESAND OPTIONS CLIENTELE.







Initiated By: NYSE MKT LLC (NYSE MKT EQUITIES MARKET)


Other


N/A





THIS MATTER IS PART OF AN INVESTIGATION THAT INITIALLY FOCUSED ONTHE FIRM'S FAILURE ACROSS MULTIPLE DESKS WITHIN THE REVIEWPERIOD TO REASONABLY PREVENT THE ENTRY OF CERTAIN ERRONEOUSEQUITY OR OPTIONS ORDERS SENT TO NYSE MKT, NYSE ARCA, INC.(NYSE ARCA EQUITIES), THE NEW YORK STOCK EXCHANGE LLC (NYSE),THE NASDAQ STOCK MARKET LLC (NASDAQ), NASDAQ OMX PHLX LLC(PHLX), BATS EXCHANGE, INC. (BZX", BATS Y-EXCHANGE, INC. (BYX), ANDEDGX EXCHANGE, INC. (EDGX) (COLLECTIVELY THE EXCHANGES). AS ARESULT OF THE INVESTIGATION, FINRA'S DEPARTMENT OF MARKETREGULATION DETERMINED THAT UBS FAILED TO HAVE FINANCIAL RISKMANAGEMENT CONTROLS REASONABLY DESIGNED TO PREVENT THETRANSMISSION OF NUMEROUS ERRONEOUS EQUITY OR OPTIONSORDERS, AND ORDERS THAT EXCEEDED APPROPRIATE PRE-SET CREDITTHRESHOLDS IN THE AGGREGATE FOR ITS CUSTOMERS. ADDITIONALLY,UBS FAILED TO HAVE ADEQUATE SUPERVISORY PROCEDURES DESIGNEDTO MANAGE THE FINANCIAL, REGULATORY, AND OTHER RISKS OFMARKET ACCESS. SPECIFICALLY, DURING THE REVIEW PERIOD, UBSVIOLATED SEC RULE 15C3-5(C) AND NYSE MKT RULES 342-EQUITIES, 3110-EQUITIES AND 2010-EQUITIES WHEN IT FAILED TO ESTABLISH, MAINTAINAND ENFORCE A SYSTEM OF RISK MANAGEMENT CONTROLS ANDSUPERVISORY PROCEDURES REASONABLY DESIGNED TO PREVENT THEENTRY OF ERRONEOUS EQUITY OR OPTIONS ORDERS, BY REJECTINGORDERS THAT EXCEEDED APPROPRIATE PRICE OR SIZE PARAMETERS,ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIOD OF TIME, ORTHAT INDICATED DUPLICATIVE ORDERS. FROM NOVEMBER 30, 2011,THROUGH MARCH 2015, UBS VIOLATED SEC RULE 15C3-5(C)(1)(I) ANDNYSE MKT RULES 342-EQUITIES, 3110-EQUITIES AND 2010-EQUITIES WHENIT FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OF RISKMANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO PREVENT THE ENTRY OF ORDERS THATEXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDS IN THEAGGREGATE FOR ITS CUSTOMERS. FROM FEBRUARY 2014 TO JULY 2015,UBS VIOLATED SEC RULE 15C3-5(D) AND NYSE MKT RULES 342-EQUITIES,3110-EQUITIES AND 2010-EQUITIES WHEN IT APPLIED CONTROLS TO TWOSPONSORED ACCESS CLIENT FLOWS THAT WERE NOT DEVELOPEDINDEPENDENTLY OF SUCH CLIENTS. FINALLY, DURING THE REVIEWPERIOD, UBS VIOLATED SEC RULE 15C3-5(B) AND NYSE MKT RULES 342-EQUITIES, 3110-EQUITIES AND 2010-EQUITIES WHEN IT FAILED TOESTABLISH, MAINTAIN AND PRESERVE AN ADEQUATE WRITTENDESCRIPTION OF ITS RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES IN CONNECTION WITH EQUITY AND OPTION ERRONEOUSORDER CONTROLS, AND PRE-SET CREDIT THRESHOLDS FOR EQUITIESAND OPTIONS CLIENTELE.


Resolution:


No


Decision






Other Sanctions Ordered: ADDRESS THE MARKET ACCESS RULE DEFICIENCIES DESCRIBED IN THISDECISION TO ENSURE THAT UBS HAS IMPLEMENTED PROCEDURES THATARE REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE RULESAND REGULATIONS CITED HEREIN

Sanction Details: A HEARING OFFICER AT FINRA CONSIDERED A STIPULATION OF FACTSAND CONSENT TO PENALTY ENTERED INTO BETWEEN FINRA'SDEPARTMENT OF MARKET REGULATION ON BEHALF OF NYSEREGULATION, INC. AND UBS SECURITIES LLC, A MEMBER ORGANIZATIONOF NYSE MKT LLC (NYSE MKT). THE STIPULATION OF FACTS ANDCONSENT TO PENALTY WAS SUBMITTED FOR THE SOLE PURPOSE OFSETTLING THIS DISCIPLINARY PROCEEDING, WITHOUT ADJUDICATION OFANY ISSUES OF LAW OR FACT, AND WITHOUT ADMITTING OR DENYING ANYALLEGATIONS OR FINDINGS REFERRED TO THEREIN. UBS IS CENSUREDAND FINED $75,000. UNDER THE STIPULATION OF FACTS AND CONSENT TOPENALTY, UBS AGREED TO PAY A TOTAL FINE OF $1,250,000, OF WHICH$75,000 SHALL BE PAID TO NYSE MKT EQUITIES MARKET AND THEREMAINING AMOUNT SHALL BE PAID TO NYSE MKT LLC OPTIONS MARKET;NYSE ARCA, INC.; THE NASDAQ STOCK MARKET LLC; NASDAQ OMX PHLXLLC; BATS EXCHANGE, INC.; BATS Y-EXCHANGE, INC.; EDGX EXCHANGE,INC.; FINRA; AND THE NEW YORK STOCK EXCHANGE IN ACCORDANCEWITH THE TERMS OF PARALLEL SETTLEMENT AGREEMENTS IN RELATEDMATTERS BETWEEN UBS AND EACH OF THESE SELF-REGULATORYORGANIZATIONS. UBS IS ALSO ORDERED TO ADDRESS THE MARKETACCESS RULE DEFICIENCIES DESCRIBED IN THIS DECISION TO ENSURETHAT UBS HAS IMPLEMENTED PROCEDURES THAT ARE REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH THE RULES ANDREGULATIONS CITED HEREIN.

Regulator Statement IN DETERMINING TO RESOLVE THIS MATTER IN THE MANNER SET FORTHIN THE STIPULATION OF FACTS AND CONSENT TO PENALTY, FINRA'SDEPARTMENT OF MARKET REGULATION CONSIDERED THAT UBS ON ITSOWN ACCORD ENGAGED AN OUTSIDE CONSULTANT TO REVIEW ANDMAKE RECOMMENDATIONS TO ENHANCE CONTROLS AND PROCEDURESWITH RESPECT TO CERTAIN ASPECTS OF ITS MARKET ACCESSCONTROLS AND RELATED SUPERVISORY PROCEDURES FORCOMPLIANCE WITH SEC RULE 15C3-5.



Allegations: FINRA'S DEPARTMENT OF MARKET REGULATION (THE STAFF), ON BEHALFOF NYSE MKT LLC (NYSE MKT EQUITIES MARKET), AS WELL AS VARIOUSOTHER SECURITIES EXCHANGES AND FINRA, CONDUCTED A REVIEW OFTHE FIRM'S COMPLIANCE WITH SEC RULE 15C3-5 AND NYSE MKT RULES342-EQUITIES, 3110-EQUITIES AND 2010 EQUITIES DURING THE REVIEWPERIOD BEGINNING ON JULY 14, 2011, AND CONTINUING THROUGH ATLEAST JULY 2015. AS A RESULT OF THE INVESTIGATION, THE STAFFDETERMINED THAT UBS FAILED TO HAVE FINANCIAL RISK MANAGEMENTCONTROLS REASONABLY DESIGNED TO PREVENT THE TRANSMISSION OFNUMEROUS ERRONEOUS EQUITY OR OPTIONS ORDERS, AND ORDERSTHAT EXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDS IN THEAGGREGATE FOR ITS CUSTOMERS. ADDITIONALLY, UBS FAILED TO HAVEADEQUATE SUPERVISORY PROCEDURES DESIGNED TO MANAGE THEFINANCIAL, REGULATORY, AND OTHER RISKS OF MARKET ACCESS.SPECIFICALLY, DURING THE REVIEW PERIOD, UBS VIOLATED SEC RULE15C3-5(C) AND NYSE MKT RULES 342-EQUITIES, 3110-EQUITIES AND 2010EQUITIES WHEN IT FAILED TO ESTABLISH, MAINTAIN AND ENFORCE ASYSTEM OF RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES REASONABLY DESIGNED TO PREVENT THE ENTRY OFERRONEOUS EQUITY OR OPTIONS ORDERS, BY REJECTING ORDERS THATEXCEEDED APPROPRIATE PRICE OR SIZE PARAMETERS, ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIOD OF TIME, OR THATINDICATED DUPLICATIVE ORDERS.







Initiated By: NYSE MKT LLC (NYSE MKT EQUITIES MARKET)




CENSURE





Allegations: FINRA'S DEPARTMENT OF MARKET REGULATION (THE STAFF), ON BEHALFOF NYSE MKT LLC (NYSE MKT EQUITIES MARKET), AS WELL AS VARIOUSOTHER SECURITIES EXCHANGES AND FINRA, CONDUCTED A REVIEW OFTHE FIRM'S COMPLIANCE WITH SEC RULE 15C3-5 AND NYSE MKT RULES342-EQUITIES, 3110-EQUITIES AND 2010 EQUITIES DURING THE REVIEWPERIOD BEGINNING ON JULY 14, 2011, AND CONTINUING THROUGH ATLEAST JULY 2015. AS A RESULT OF THE INVESTIGATION, THE STAFFDETERMINED THAT UBS FAILED TO HAVE FINANCIAL RISK MANAGEMENTCONTROLS REASONABLY DESIGNED TO PREVENT THE TRANSMISSION OFNUMEROUS ERRONEOUS EQUITY OR OPTIONS ORDERS, AND ORDERSTHAT EXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDS IN THEAGGREGATE FOR ITS CUSTOMERS. ADDITIONALLY, UBS FAILED TO HAVEADEQUATE SUPERVISORY PROCEDURES DESIGNED TO MANAGE THEFINANCIAL, REGULATORY, AND OTHER RISKS OF MARKET ACCESS.SPECIFICALLY, DURING THE REVIEW PERIOD, UBS VIOLATED SEC RULE15C3-5(C) AND NYSE MKT RULES 342-EQUITIES, 3110-EQUITIES AND 2010EQUITIES WHEN IT FAILED TO ESTABLISH, MAINTAIN AND ENFORCE ASYSTEM OF RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES REASONABLY DESIGNED TO PREVENT THE ENTRY OFERRONEOUS EQUITY OR OPTIONS ORDERS, BY REJECTING ORDERS THATEXCEEDED APPROPRIATE PRICE OR SIZE PARAMETERS, ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIOD OF TIME, OR THATINDICATED DUPLICATIVE ORDERS.


Resolution:


Sanction Details: UNDER THE OFFER OF SETTLEMENT AND CONSENT, UBS AGREED TO PAYA TOTAL FINE OF $1,250.000, OF WHICH $75,000 SHALL BE PAID TO NYSEMKT LLC EQUITIES MARKET AND THE REMAINING AMOUNT SHALL BE PAIDTO (I)NYSE ARCA, INC. ; (II) NYSE MKT LLC OPTIONS MARKET; (III) THENASDAQ STOCK MARKET LLC; (IV) NASDAQ OMX PHLX LLC; (V) BATSEXCHANGE, INC.; (VI) BATS Y-EXCHANGE, INC.; (VII) EDGX EXCHANGE,INC ; (VIII) FINRA; AND (IX) THE NEW YORK STOCK EXCHANGE INACCORDANCE WITH THE TERMS OF PARALLEL SETTLEMENTAGREEMENTS IN RELATED MATTERS. ADDITIONALLY, UBS SECURITIES LLCCONSENTED TO A CENSURE, AND AN UNDERTAKING.


Decision






UNDER THE OFFER OF SETTLEMENT AND CONSENT, UBS AGREED TO PAYA TOTAL FINE OF $1,250.000, OF WHICH $75,000 SHALL BE PAID TO NYSEMKT LLC EQUITIES MARKET AND THE REMAINING AMOUNT SHALL BE PAIDTO (I)NYSE ARCA, INC. ; (II) NYSE MKT LLC OPTIONS MARKET; (III) THENASDAQ STOCK MARKET LLC; (IV) NASDAQ OMX PHLX LLC; (V) BATSEXCHANGE, INC.; (VI) BATS Y-EXCHANGE, INC.; (VII) EDGX EXCHANGE,INC ; (VIII) FINRA; AND (IX) THE NEW YORK STOCK EXCHANGE INACCORDANCE WITH THE TERMS OF PARALLEL SETTLEMENTAGREEMENTS IN RELATED MATTERS. ADDITIONALLY, UBS SECURITIES LLCCONSENTED TO A CENSURE, AND AN UNDERTAKING.


i


Allegations: THE FIRM MADE AND ENTERED INTO AN OFFER OF SETTLEMENT,STIPULATION OF FACTS AND CONSENT TO SANCTIONS, PURSUANT TONASDAQ OMX PHLX LLC RULE 960.7, SOLELY FOR THE PURPOSES OFTHESE PROCEEDINGS AND TO SETTLE AND CONCLUDE ALL DISCIPLINARYACTIONS BY NASDAQ OMX PHLX LLC (THE EXCHANGE) BASED ON ORARISING OUT OF THE FACTS HEREINAFTER STIPULATED. THE FIRMSTIPULATES TO THE FACTS, CONSENTS TO THE CONCLUSION OFVIOLATIONS OF CERTAIN EXCHANGE RULES AND OF THE SECURITIESEXCHANGE ACT OF 1934, AS AMENDED (THE EXCHANGE ACT), ANDCONSENTS TO THE IMPOSITION OF SANCTIONS SPECIFICALLY INCLUDING,BUT NOT LIMITED TO, CONSENTING TO PAY THE FINE IMPOSED BY THEBUSINESS CONDUCT COMMITTEE OF THE EXCHANGE CONSISTENT WITHTHE OFFER, AND TO COMPLY WITH ALL OTHER SANCTIONS, ALL ASHEREINAFTER SET FORTH, WITHOUT ADMITTING OR DENYING THEALLEGATIONS OR CONCLUSIONS IN THE STATEMENT OF CHARGES. THISMATTER IS PART OF AN INVESTIGATION THAT INITIALLY FOCUSED ON THEFIRM'S FAILURE ACROSS MULTIPLE DESKS WITHIN THE REVIEW PERIODTO REASONABLY PREVENT THE ENTRY OF CERTAIN ERRONEOUS EQUITYOR OPTIONS ORDERS SENT TO THE EXCHANGE, THE NASDAQ STOCKMARKET LLC (NASDAQ) BATS EXCHANGE, INC. (BZX), BATS Y-EXCHANGE,INC. (BYX), EDGX EXCHANGE, INC. (EDGX), THE NEW YORK STOCKEXCHANGE LLC (NYSE), NYSE ARCA, INC. (NYSE ARCA EQUITIES), ANDNYSE MKT LLC (NYSE MKT) (COLLECTIVELY THE EXCHANGES). AS ARESULT OF THE INVESTIGATION, FINRA'S DEPARTMENT OF MARKETREGULATION DETERMINED THAT THE FIRM FAILED TO HAVE FINANCIALRISK MANAGEMENT CONTROLS REASONABLY DESIGNED TO PREVENTTHE TRANSMISSION OF NUMEROUS ERRONEOUS EQUITY OR OPTIONSORDERS, AND ORDERS THAT EXCEEDED APPROPRIATE PRE-SET CREDITTHRESHOLDS IN THE AGGREGATE FOR ITS CUSTOMERS. ADDITIONALLY,THE FIRM FAILED TO HAVE ADEQUATE SUPERVISORY PROCEDURESDESIGNED TO MANAGE THE FINANCIAL, REGULATORY, AND OTHER RISKSOF MARKET ACCESS. SPECIFICALLY, DURING THE REVIEW PERIOD, UBSVIOLATED EXCHANGE ACT RULE 15C3-5(C) AND EXCHANGE RULES 707,748(B), (D), (G), AND LATER (H), WHEN IT FAILED TO ESTABLISH, MAINTAINAND ENFORCE A SYSTEM OF RISK MANAGEMENT CONTROLS ANDSUPERVISORY PROCEDURES REASONABLY DESIGNED TO PREVENT THEENTRY OF ERRONEOUS EQUITY OR OPTIONS ORDERS, BY REJECTINGORDERS THAT EXCEEDED APPROPRIATE PRICE OR SIZE PARAMETERS,ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIOD OF TIME, ORTHAT INDICATED DUPLICATIVE ORDERS. ADDITIONALLY, FROM NOVEMBER30, 2011 THROUGH MARCH 2015, UBS VIOLATED EXCHANGE ACT RULE15C3-5(C)(1)(I) AND EXCHANGE RULES 707, 748(B), (D), (G), AND LATER (H),WHEN IT FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OFRISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO PREVENT THE ENTRY OF ORDERS THATEXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDS IN THEAGGREGATE FOR ITS CUSTOMERS. FINALLY, DURING THE REVIEWPERIOD, UBS VIOLATED EXCHANGE ACT RULE 15C3-5(B) AND EXCHANGERULES 707, 748(B), (D), (G), AND LATER (H), WHEN IT FAILED TO ESTABLISH,MAINTAIN AND PRESERVE AN ADEQUATE WRITTEN DESCRIPTION OF ITSRISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES INCONNECTION WITH EQUITY AND OPTION ERRONEOUS ORDERCONTROLS, AND PRE-SET CREDIT THRESHOLDS FOR EQUITIES ANDOPTIONS CLIENTELE.







Initiated By: NASDAQ OMX PHLX, INC.


Other


N/A





THE FIRM MADE AND ENTERED INTO AN OFFER OF SETTLEMENT,STIPULATION OF FACTS AND CONSENT TO SANCTIONS, PURSUANT TONASDAQ OMX PHLX LLC RULE 960.7, SOLELY FOR THE PURPOSES OFTHESE PROCEEDINGS AND TO SETTLE AND CONCLUDE ALL DISCIPLINARYACTIONS BY NASDAQ OMX PHLX LLC (THE EXCHANGE) BASED ON ORARISING OUT OF THE FACTS HEREINAFTER STIPULATED. THE FIRMSTIPULATES TO THE FACTS, CONSENTS TO THE CONCLUSION OFVIOLATIONS OF CERTAIN EXCHANGE RULES AND OF THE SECURITIESEXCHANGE ACT OF 1934, AS AMENDED (THE EXCHANGE ACT), ANDCONSENTS TO THE IMPOSITION OF SANCTIONS SPECIFICALLY INCLUDING,BUT NOT LIMITED TO, CONSENTING TO PAY THE FINE IMPOSED BY THEBUSINESS CONDUCT COMMITTEE OF THE EXCHANGE CONSISTENT WITHTHE OFFER, AND TO COMPLY WITH ALL OTHER SANCTIONS, ALL ASHEREINAFTER SET FORTH, WITHOUT ADMITTING OR DENYING THEALLEGATIONS OR CONCLUSIONS IN THE STATEMENT OF CHARGES. THISMATTER IS PART OF AN INVESTIGATION THAT INITIALLY FOCUSED ON THEFIRM'S FAILURE ACROSS MULTIPLE DESKS WITHIN THE REVIEW PERIODTO REASONABLY PREVENT THE ENTRY OF CERTAIN ERRONEOUS EQUITYOR OPTIONS ORDERS SENT TO THE EXCHANGE, THE NASDAQ STOCKMARKET LLC (NASDAQ) BATS EXCHANGE, INC. (BZX), BATS Y-EXCHANGE,INC. (BYX), EDGX EXCHANGE, INC. (EDGX), THE NEW YORK STOCKEXCHANGE LLC (NYSE), NYSE ARCA, INC. (NYSE ARCA EQUITIES), ANDNYSE MKT LLC (NYSE MKT) (COLLECTIVELY THE EXCHANGES). AS ARESULT OF THE INVESTIGATION, FINRA'S DEPARTMENT OF MARKETREGULATION DETERMINED THAT THE FIRM FAILED TO HAVE FINANCIALRISK MANAGEMENT CONTROLS REASONABLY DESIGNED TO PREVENTTHE TRANSMISSION OF NUMEROUS ERRONEOUS EQUITY OR OPTIONSORDERS, AND ORDERS THAT EXCEEDED APPROPRIATE PRE-SET CREDITTHRESHOLDS IN THE AGGREGATE FOR ITS CUSTOMERS. ADDITIONALLY,THE FIRM FAILED TO HAVE ADEQUATE SUPERVISORY PROCEDURESDESIGNED TO MANAGE THE FINANCIAL, REGULATORY, AND OTHER RISKSOF MARKET ACCESS. SPECIFICALLY, DURING THE REVIEW PERIOD, UBSVIOLATED EXCHANGE ACT RULE 15C3-5(C) AND EXCHANGE RULES 707,748(B), (D), (G), AND LATER (H), WHEN IT FAILED TO ESTABLISH, MAINTAINAND ENFORCE A SYSTEM OF RISK MANAGEMENT CONTROLS ANDSUPERVISORY PROCEDURES REASONABLY DESIGNED TO PREVENT THEENTRY OF ERRONEOUS EQUITY OR OPTIONS ORDERS, BY REJECTINGORDERS THAT EXCEEDED APPROPRIATE PRICE OR SIZE PARAMETERS,ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIOD OF TIME, ORTHAT INDICATED DUPLICATIVE ORDERS. ADDITIONALLY, FROM NOVEMBER30, 2011 THROUGH MARCH 2015, UBS VIOLATED EXCHANGE ACT RULE15C3-5(C)(1)(I) AND EXCHANGE RULES 707, 748(B), (D), (G), AND LATER (H),WHEN IT FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OFRISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO PREVENT THE ENTRY OF ORDERS THATEXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDS IN THEAGGREGATE FOR ITS CUSTOMERS. FINALLY, DURING THE REVIEWPERIOD, UBS VIOLATED EXCHANGE ACT RULE 15C3-5(B) AND EXCHANGERULES 707, 748(B), (D), (G), AND LATER (H), WHEN IT FAILED TO ESTABLISH,MAINTAIN AND PRESERVE AN ADEQUATE WRITTEN DESCRIPTION OF ITSRISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES INCONNECTION WITH EQUITY AND OPTION ERRONEOUS ORDERCONTROLS, AND PRE-SET CREDIT THRESHOLDS FOR EQUITIES ANDOPTIONS CLIENTELE.


Resolution:


No

Decision







Sanction Details: THE FIRM WAS CENSURED, FINED AN AGGREGATE FINE OF $1,250,000, OFWHICH $62,500 SHALL BE PAID TO NASDAQ OMX PHLX AND UNDERTAKESTO ADDRESS THE MARKET ACCESS RULE DEFICIENCIES DESCRIBEDABOVE TO ENSURE THAT THE FIRM HAS IMPLEMENTED PROCEDURESTHAT ARE REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THERULES AND REGULATIONS CITED HEREIN. THE BALANCE OF THESANCTION WILL BE PAID TO THE NASDAQ STOCK MARKET LLC; BATSEXCHANGE, INC.; BATS Y-EXCHANGE, INC.; EDGX EXCHANGE, INC.; NYSEREGULATION, INC. ON BEHALF OF THE NEW YORK STOCK EXCHANGE LLC,NYSE MKT LLC (NYSE MKT EQUITIES AND NYSE MKT OPTIONS MARKETS),AND NYSE ARCA, INC.; AND FINRA. (ASSOCIATED CASE: ENFORCEMENTNO. 2015-12)

Regulator Statement IN DETERMINING TO RESOLVE THIS MATTER IN THE MANNER SET FORTHHEREIN, FINRA'S DEPARTMENT OF MARKET REGULATION TOOK INTOCONSIDERATION THAT, UBS, ON ITS OWN ACCORD, ENGAGED AN OUTSIDECONSULTANT TO REVIEW AND MAKE RECOMMENDATIONS TO ENHANCECONTROLS AND PROCEDURES WITH RESPECT TO CERTAIN ASPECTS OFTHE FIRM'S MARKET ACCESS CONTROLS AND RELATED SUPERVISORYPROCEDURES FOR COMPLIANCE WITH EXCHANGE ACT RULE 15C3-5.



Allegations: THE FIRM MADE AND ENTERED INTO AN OFFER OF SETTLEMENT,STIPULATION OF FACTS AND CONSENT TO SANCTIONS, PURSUANT TONASDAQ OMX PHLX LLC RULE 960.7. THE FIRM, WITHOUT ADMITTING ORDENYING THE ALLEGATIONS OR CONCLUSIONS IN THE STATEMENT OFCHARGES, STIPULATED TO FACTS, CONSENTED TO THE CONCLUSION OFVIOLATIONS OF CERTAIN EXCHANGE RULES AND OF THE SECURITIESEXCHANGE ACT OF 1934, AS AMENDED (THE EXCHANGE ACT), ANDCONSENTED TO THE IMPOSITION OF SANCTIONS SPECIFICALLYINCLUDING, BUT NOT LIMITED TO, CONSENTING TOPAY A FINE OF $62,500 AND TO COMPLY WITH ALL OTHER SANCTIONS.THIS MATTER IS PART OF AN INVESTIGATION THAT INITIALLY FOCUSED ONTHE FIRM'S FAILURE ACROSS MULTIPLE DESKS WITHIN THE REVIEWPERIOD TO REASONABLY PREVENT THE ENTRY OF CERTAIN ERRONEOUSEQUITY OR OPTIONS ORDERS SENT TO THE EXCHANGE, THE NASDAQSTOCK MARKET LLC (NASDAQ) BATS Z-EXCHANGE, INC. (BZX), BATS Y-EXCHANGE, INC. (BYX), EDGX EXCHANGE,INC. (EDGX), THE NEW YORK STOCK EXCHANGE LLC (NYSE), NYSE ARCA,INC. (NYSE ARCA EQUITIES), AND NYSEMKT LLC (NYSE MKT) (COLLECTIVELY THE EXCHANGES). AS A RESULT OFTHE INVESTIGATION, FINRA'S DEPARTMENT OF MARKET REGULATIONDETERMINED THAT THE FIRM FAILED TO HAVEFINANCIAL RISK MANAGEMENT CONTROLS REASONABLY DESIGNED TOPREVENT THE TRANSMISSION OF NUMEROUS ERRONEOUS EQUITY OROPTIONS ORDERS, AND ORDERS THAT EXCEEDED APPROPRIATE PRE-SETCREDIT THRESHOLDS IN THE AGGREGATE FOR ITS CUSTOMERS.ADDITIONALLY, THE FIRM FAILED TO HAVE ADEQUATE SUPERVISORYPROCEDURES DESIGNED TO MANAGE THE FINANCIAL, REGULATORY, ANDOTHER RISKS OF MARKET ACCESS. SPECIFICALLY, DURING THE REVIEWPERIOD, UBS VIOLATED EXCHANGE ACT RULE 15C3-5(C)AND EXCHANGE RULES 707, 748(B), (D), (G), AND LATER (H), WHEN ITFAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OF RISKMANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO PREVENT THE ENTRY OF ERRONEOUSEQUITY OR OPTIONS ORDERS, BY REJECTING ORDERS THAT EXCEEDEDAPPROPRIATE PRICE OR SIZE PARAMETERS, ON AN ORDER-BY-ORDERBASIS OR OVER A SHORT PERIOD OF TIME, OR THAT INDICATEDDUPLICATIVE ORDERS. ADDITIONALLY, FROM NOVEMBER 30, 2011THROUGH MARCH 2015, UBS VIOLATED EXCHANGE ACT RULE 15C3-5(C)(1)(I) AND EXCHANGE RULES 707, 748(B), (D), (G), AND LATER (H),WHEN IT FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OFRISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO PREVENT THE ENTRY OF ORDERS THATEXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDSIN THE AGGREGATE FOR ITS CUSTOMERS. FINALLY, DURING THE REVIEWPERIOD, UBS VIOLATED EXCHANGE ACT RULE 15C3-5(B) AND EXCHANGERULES 707, 748(B), (D), (G), AND LATER (H), WHEN IT FAILED TO ESTABLISH,MAINTAIN AND PRESERVE AN ADEQUATE WRITTEN DESCRIPTION OF ITSRISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES INCONNECTION WITH EQUITY AND OPTION ERRONEOUS ORDERCONTROLS, AND PRE-SET CREDIT THRESHOLDS FOR EQUITIES ANDOPTIONS CLIENTELE.












THE FIRM MADE AND ENTERED INTO AN OFFER OF SETTLEMENT,STIPULATION OF FACTS AND CONSENT TO SANCTIONS, PURSUANT TONASDAQ OMX PHLX LLC RULE 960.7. THE FIRM, WITHOUT ADMITTING ORDENYING THE ALLEGATIONS OR CONCLUSIONS IN THE STATEMENT OFCHARGES, STIPULATED TO FACTS, CONSENTED TO THE CONCLUSION OFVIOLATIONS OF CERTAIN EXCHANGE RULES AND OF THE SECURITIESEXCHANGE ACT OF 1934, AS AMENDED (THE EXCHANGE ACT), ANDCONSENTED TO THE IMPOSITION OF SANCTIONS SPECIFICALLYINCLUDING, BUT NOT LIMITED TO, CONSENTING TOPAY A FINE OF $62,500 AND TO COMPLY WITH ALL OTHER SANCTIONS.THIS MATTER IS PART OF AN INVESTIGATION THAT INITIALLY FOCUSED ONTHE FIRM'S FAILURE ACROSS MULTIPLE DESKS WITHIN THE REVIEWPERIOD TO REASONABLY PREVENT THE ENTRY OF CERTAIN ERRONEOUSEQUITY OR OPTIONS ORDERS SENT TO THE EXCHANGE, THE NASDAQSTOCK MARKET LLC (NASDAQ) BATS Z-EXCHANGE, INC. (BZX), BATS Y-EXCHANGE, INC. (BYX), EDGX EXCHANGE,INC. (EDGX), THE NEW YORK STOCK EXCHANGE LLC (NYSE), NYSE ARCA,INC. (NYSE ARCA EQUITIES), AND NYSEMKT LLC (NYSE MKT) (COLLECTIVELY THE EXCHANGES). AS A RESULT OFTHE INVESTIGATION, FINRA'S DEPARTMENT OF MARKET REGULATIONDETERMINED THAT THE FIRM FAILED TO HAVEFINANCIAL RISK MANAGEMENT CONTROLS REASONABLY DESIGNED TOPREVENT THE TRANSMISSION OF NUMEROUS ERRONEOUS EQUITY OROPTIONS ORDERS, AND ORDERS THAT EXCEEDED APPROPRIATE PRE-SETCREDIT THRESHOLDS IN THE AGGREGATE FOR ITS CUSTOMERS.ADDITIONALLY, THE FIRM FAILED TO HAVE ADEQUATE SUPERVISORYPROCEDURES DESIGNED TO MANAGE THE FINANCIAL, REGULATORY, ANDOTHER RISKS OF MARKET ACCESS. SPECIFICALLY, DURING THE REVIEWPERIOD, UBS VIOLATED EXCHANGE ACT RULE 15C3-5(C)AND EXCHANGE RULES 707, 748(B), (D), (G), AND LATER (H), WHEN ITFAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OF RISKMANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO PREVENT THE ENTRY OF ERRONEOUSEQUITY OR OPTIONS ORDERS, BY REJECTING ORDERS THAT EXCEEDEDAPPROPRIATE PRICE OR SIZE PARAMETERS, ON AN ORDER-BY-ORDERBASIS OR OVER A SHORT PERIOD OF TIME, OR THAT INDICATEDDUPLICATIVE ORDERS. ADDITIONALLY, FROM NOVEMBER 30, 2011THROUGH MARCH 2015, UBS VIOLATED EXCHANGE ACT RULE 15C3-5(C)(1)(I) AND EXCHANGE RULES 707, 748(B), (D), (G), AND LATER (H),WHEN IT FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OFRISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO PREVENT THE ENTRY OF ORDERS THATEXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDSIN THE AGGREGATE FOR ITS CUSTOMERS. FINALLY, DURING THE REVIEWPERIOD, UBS VIOLATED EXCHANGE ACT RULE 15C3-5(B) AND EXCHANGERULES 707, 748(B), (D), (G), AND LATER (H), WHEN IT FAILED TO ESTABLISH,MAINTAIN AND PRESERVE AN ADEQUATE WRITTEN DESCRIPTION OF ITSRISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES INCONNECTION WITH EQUITY AND OPTION ERRONEOUS ORDERCONTROLS, AND PRE-SET CREDIT THRESHOLDS FOR EQUITIES ANDOPTIONS CLIENTELE.












Resolution:


Sanction Details: THE FIRM WAS CENSURED, FINED AN AGGREGATE FINE OF $1,250,000, OFWHICH $62,500 SHALL BE PAID TO NASDAQ OMX PHLX AND UNDERTAKESTO ADDRESS THE MARKET ACCESS RULE DEFICIENCIES DESCRIBEDABOVE TO ENSURE THAT THE FIRM HASIMPLEMENTED PROCEDURES THAT ARE REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH THE RULES AND REGULATIONS CITEDHEREIN. THE BALANCE OF THE SANCTION WILL BE PAID TO THE NASDAQSTOCK MARKET LLC; BATS EXCHANGE, INC.; BATS Y-EXCHANGE, INC.;EDGX EXCHANGE, INC.; NYSE REGULATION, INC. ON BEHALF OF THE NEWYORK STOCK EXCHANGE LLC, NYSE MKT LLC (NYSE MKT EQUITIES ANDNYSE MKT OPTIONS MARKETS), AND NYSE ARCA, INC.; AND FINRA.(ASSOCIATED CASE: ENFORCEMENT NO. 2015-12)


Decision


i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THIS MATTERIS PART OF AN INVESTIGATION THAT INITIALLY FOCUSED ON THE FIRM'SFAILURE ACROSS MULTIPLE DESKS WITHIN THE REVIEW PERIOD TOREASONABLY PREVENT THE ENTRY OF CERTAIN ERRONEOUS EQUITY OROPTIONS ORDERS SENT TO NASDAQ, NASDAQ OMX PHLX LLC (PHLX),BATS EXCHANGE, INC. (BZX), BATS Y-EXCHANGE, INC. (BYX), EDGXEXCHANGE, INC. (EDGX), THE NEW YORK STOCK EXCHANGE LLC (NYSE),NYSE ARCA, INC. (NYSE ARCA EQUITIES), AND NYSE MKT LLC (NYSE MKT)(COLLECTIVELY THE EXCHANGES). AS A RESULT OF THE INVESTIGATION,FINRA'S DEPARTMENT OF MARKET REGULATION DETERMINED THAT THEFIRM FAILED TO HAVE FINANCIAL RISK MANAGEMENT CONTROLSREASONABLY DESIGNED TO PREVENT THE TRANSMISSION OFNUMEROUS ERRONEOUS EQUITY OR OPTIONS ORDERS, AND ORDERSTHAT EXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDS IN THEAGGREGATE FOR ITS CUSTOMERS. ADDITIONALLY, THE FIRM FAILED TOHAVE ADEQUATE SUPERVISORY PROCEDURES DESIGNED TO MANAGETHE FINANCIAL, REGULATORY, AND OTHER RISKS OF MARKET ACCESS.SPECIFICALLY, DURING THE REVIEW PERIOD, UBS VIOLATED SECURITIESEXCHANGE ACT OF 1934 RULE 15C3-5(C), AND NASDAQ RULES 3010, 2110AND 2010A WHEN IT FAILED TO ESTABLISH, MAINTAIN AND ENFORCE ASYSTEM OF RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES REASONABLY DESIGNED TO PREVENT THE ENTRY OFERRONEOUS EQUITY OR OPTIONS ORDERS, BY REJECTING ORDERS THATEXCEEDED APPROPRIATE PRICE OR SIZE PARAMETERS, ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIOD OF TIME, OR THATINDICATED DUPLICATIVE ORDERS. ADDITIONALLY, FROM NOVEMBER 30,2011 THROUGH MARCH 2015, UBS VIOLATED SECURITIES EXCHANGE ACTOF 1934 RULE 15C3-5(C)(1)(I), AND NASDAQ RULES 3010, 2110 AND 2010AWHEN IT FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OFRISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO PREVENT THE ENTRY OF ORDERS THATEXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDS IN THEAGGREGATE FOR ITS CUSTOMERS. FURTHERMORE, FROM FEBRUARY2014 TO JULY 2015, UBS VIOLATED SECURITIES EXCHANGE ACT OF 1934RULE 15C3-5(D), AND NASDAQ RULES 3010 AND 2010A WHEN IT APPLIEDCONTROLS TO TWO SPONSORED ACCESS CLIENT FLOWS THAT WERENOT DEVELOPED INDEPENDENTLY OF SUCH CLIENTS. FINALLY, DURINGTHE REVIEW PERIOD, UBS VIOLATED SECURITIES EXCHANGE ACT OF 1934RULE 15C3-5(B), AND NASDAQ RULES 3010, 2110 AND 2010A WHEN ITFAILED TO ESTABLISH, MAINTAIN AND PRESERVE AN ADEQUATE WRITTENDESCRIPTION OF ITS RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES IN CONNECTION WITH EQUITY AND OPTION ERRONEOUSORDER CONTROLS, AND PRE-SET CREDIT THRESHOLDS FOR EQUITIESAND OPTIONS CLIENTELE.







Initiated By: NASDAQ STOCK MARKET







WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THIS MATTERIS PART OF AN INVESTIGATION THAT INITIALLY FOCUSED ON THE FIRM'SFAILURE ACROSS MULTIPLE DESKS WITHIN THE REVIEW PERIOD TOREASONABLY PREVENT THE ENTRY OF CERTAIN ERRONEOUS EQUITY OROPTIONS ORDERS SENT TO NASDAQ, NASDAQ OMX PHLX LLC (PHLX),BATS EXCHANGE, INC. (BZX), BATS Y-EXCHANGE, INC. (BYX), EDGXEXCHANGE, INC. (EDGX), THE NEW YORK STOCK EXCHANGE LLC (NYSE),NYSE ARCA, INC. (NYSE ARCA EQUITIES), AND NYSE MKT LLC (NYSE MKT)(COLLECTIVELY THE EXCHANGES). AS A RESULT OF THE INVESTIGATION,FINRA'S DEPARTMENT OF MARKET REGULATION DETERMINED THAT THEFIRM FAILED TO HAVE FINANCIAL RISK MANAGEMENT CONTROLSREASONABLY DESIGNED TO PREVENT THE TRANSMISSION OFNUMEROUS ERRONEOUS EQUITY OR OPTIONS ORDERS, AND ORDERSTHAT EXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDS IN THEAGGREGATE FOR ITS CUSTOMERS. ADDITIONALLY, THE FIRM FAILED TOHAVE ADEQUATE SUPERVISORY PROCEDURES DESIGNED TO MANAGETHE FINANCIAL, REGULATORY, AND OTHER RISKS OF MARKET ACCESS.SPECIFICALLY, DURING THE REVIEW PERIOD, UBS VIOLATED SECURITIESEXCHANGE ACT OF 1934 RULE 15C3-5(C), AND NASDAQ RULES 3010, 2110AND 2010A WHEN IT FAILED TO ESTABLISH, MAINTAIN AND ENFORCE ASYSTEM OF RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES REASONABLY DESIGNED TO PREVENT THE ENTRY OFERRONEOUS EQUITY OR OPTIONS ORDERS, BY REJECTING ORDERS THATEXCEEDED APPROPRIATE PRICE OR SIZE PARAMETERS, ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIOD OF TIME, OR THATINDICATED DUPLICATIVE ORDERS. ADDITIONALLY, FROM NOVEMBER 30,2011 THROUGH MARCH 2015, UBS VIOLATED SECURITIES EXCHANGE ACTOF 1934 RULE 15C3-5(C)(1)(I), AND NASDAQ RULES 3010, 2110 AND 2010AWHEN IT FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OFRISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO PREVENT THE ENTRY OF ORDERS THATEXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDS IN THEAGGREGATE FOR ITS CUSTOMERS. FURTHERMORE, FROM FEBRUARY2014 TO JULY 2015, UBS VIOLATED SECURITIES EXCHANGE ACT OF 1934RULE 15C3-5(D), AND NASDAQ RULES 3010 AND 2010A WHEN IT APPLIEDCONTROLS TO TWO SPONSORED ACCESS CLIENT FLOWS THAT WERENOT DEVELOPED INDEPENDENTLY OF SUCH CLIENTS. FINALLY, DURINGTHE REVIEW PERIOD, UBS VIOLATED SECURITIES EXCHANGE ACT OF 1934RULE 15C3-5(B), AND NASDAQ RULES 3010, 2110 AND 2010A WHEN ITFAILED TO ESTABLISH, MAINTAIN AND PRESERVE AN ADEQUATE WRITTENDESCRIPTION OF ITS RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES IN CONNECTION WITH EQUITY AND OPTION ERRONEOUSORDER CONTROLS, AND PRE-SET CREDIT THRESHOLDS FOR EQUITIESAND OPTIONS CLIENTELE.

Resolution: Acceptance, Waiver & Consent(AWC) 143©2022 FINRA. All rights reserved. Report about UBS SECURITIES LLC






Resolution:


Sanction Details: THE FIRM WAS CENSURED, FINED AN AGGREGATE FINE OF $1,250,000, OFWHICH $350,000 SHALL BE PAID TO NASDAQ AND UNDERTAKES TOADDRESS THE MARKET ACCESS RULE DEFICIENCIES DESCRIBED ABOVETO ENSURE THAT THE FIRM HAS IMPLEMENTED PROCEDURES THAT AREREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE RULES ANDREGULATIONS CITED HEREIN. ACCEPTANCE OF THIS AWC ISCONDITIONED UPON ACCEPTANCE OF SIMILAR SETTLEMENTAGREEMENTS IN RELATED MATTERS BETWEEN UBS AND EACH OF THEFOLLOWING SELF-REGULATORY ORGANIZATIONS: NASDAQ OMX PHLXLLC; BATS EXCHANGE, INC.; BATS Y-EXCHANGE, INC.; EDGX EXCHANGE,INC.; NYSE REGULATION, INC. ON BEHALF OF THE NEW YORK STOCKEXCHANGE LLC, NYSE MKT LLC (NYSE MKT EQUITIES AND NYSE MKTOPTIONS MARKETS), AND NYSE ARCA, INC.; AND FINRA.



No




Allegations: FINRA'S DEPARTMENT OF MARKET REGULATION (THE STAFF), ON BEHALFOF THE NASDAQ STOCK MARKET, AS WELL AS VARIOUS OTHERSECURITIES EXCHANGES AND FINRA, CONDUCTED A REVIEW OF THEFIRM'S COMPLIANCE WITH SEC RULE 15C3-5 AND NASDAQ RULES 3010,2110, AND 2010A DURING THE REVIEW PERIOD BEGINNING ON JULY 14,2011, AND CONTINUING THROUGH AT LEAST JULY 2015. AS A RESULT OFTHE INVESTIGATION, THE STAFF DETERMINEDTHAT UBS FAILED TO HAVE FINANCIAL RISK MANAGEMENT CONTROLSREASONABLY DESIGNED TO PREVENT THE TRANSMISSION OFNUMEROUSERRONEOUS EQUITY OR OPTIONS ORDERS, AND ORDERS THATEXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDS IN THEAGGREGATE FOR ITS CUSTOMERS. ADDITIONALLY, UBS FAILED TO HAVEADEQUATE SUPERVISORY PROCEDURES DESIGNED TO MANAGE THEFINANCIAL, REGULATORY, AND OTHER RISKS OF MARKET ACCESS.SPECIFICALLY, DURING THE REVIEW PERIOD, UBS VIOLATED SEC RULE15C3-5(C) AND NASDAQ RULES 3010, 2110, AND 2010A WHEN IT FAILED TOESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OF RISK MANAGEMENTCONTROLS AND SUPERVISORY PROCEDURES REASONABLY DESIGNEDTO PREVENT THE ENTRY OF ERRONEOUS EQUITY OR OPTIONS ORDERS,BY REJECTING ORDERS THAT EXCEEDED APPROPRIATE PRICE OR SIZEPARAMETERS, ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIODOF TIME, OR THAT INDICATED DUPLICATIVE ORDERS.
















FINRA'S DEPARTMENT OF MARKET REGULATION (THE STAFF), ON BEHALFOF THE NASDAQ STOCK MARKET, AS WELL AS VARIOUS OTHERSECURITIES EXCHANGES AND FINRA, CONDUCTED A REVIEW OF THEFIRM'S COMPLIANCE WITH SEC RULE 15C3-5 AND NASDAQ RULES 3010,2110, AND 2010A DURING THE REVIEW PERIOD BEGINNING ON JULY 14,2011, AND CONTINUING THROUGH AT LEAST JULY 2015. AS A RESULT OFTHE INVESTIGATION, THE STAFF DETERMINEDTHAT UBS FAILED TO HAVE FINANCIAL RISK MANAGEMENT CONTROLSREASONABLY DESIGNED TO PREVENT THE TRANSMISSION OFNUMEROUSERRONEOUS EQUITY OR OPTIONS ORDERS, AND ORDERS THATEXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDS IN THEAGGREGATE FOR ITS CUSTOMERS. ADDITIONALLY, UBS FAILED TO HAVEADEQUATE SUPERVISORY PROCEDURES DESIGNED TO MANAGE THEFINANCIAL, REGULATORY, AND OTHER RISKS OF MARKET ACCESS.SPECIFICALLY, DURING THE REVIEW PERIOD, UBS VIOLATED SEC RULE15C3-5(C) AND NASDAQ RULES 3010, 2110, AND 2010A WHEN IT FAILED TOESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OF RISK MANAGEMENTCONTROLS AND SUPERVISORY PROCEDURES REASONABLY DESIGNEDTO PREVENT THE ENTRY OF ERRONEOUS EQUITY OR OPTIONS ORDERS,BY REJECTING ORDERS THAT EXCEEDED APPROPRIATE PRICE OR SIZEPARAMETERS, ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIODOF TIME, OR THAT INDICATED DUPLICATIVE ORDERS.


Resolution:


Sanction Details: UNDER THE OFFER OF SETTLEMENT AND CONSENT, UBS AGREED TO PAYA TOTAL FINE OF $1,250.000, OF WHICH $350,000.00 SHALL BE PAID TO THENASDAQ STOCK MARKET AND THE REMAINING AMOUNT SHALL BE PAID TO(I) NYSE MKT LLC OPTIONS MARKET; (II) NYSE MKT LLC EQUITIES MARKET;(III) EDGX EXCHANGE, INC.; (IV) NASDAQ OMX PHLX LLC; (V) BATS Z-EXCHANGE, INC.; (VI) BATS Y-EXCHANGE, INC.; (VII)NYSE ARCA INC. ; (VIII)FINRA; AND (IX) THE NEW YORK STOCK EXCHANGE IN ACCORDANCE WITHTHE TERMS OF PARALLEL SETTLEMENT AGREEMENTS IN RELATEDMATTERS. ADDITIONALLY, UBS SECURITIES LLC CONSENTED TO ACENSURE, AND AN UNDERTAKING.








UNDER THE OFFER OF SETTLEMENT AND CONSENT, UBS AGREED TO PAYA TOTAL FINE OF $1,250.000, OF WHICH $350,000.00 SHALL BE PAID TO THENASDAQ STOCK MARKET AND THE REMAINING AMOUNT SHALL BE PAID TO(I) NYSE MKT LLC OPTIONS MARKET; (II) NYSE MKT LLC EQUITIES MARKET;(III) EDGX EXCHANGE, INC.; (IV) NASDAQ OMX PHLX LLC; (V) BATS Z-EXCHANGE, INC.; (VI) BATS Y-EXCHANGE, INC.; (VII)NYSE ARCA INC. ; (VIII)FINRA; AND (IX) THE NEW YORK STOCK EXCHANGE IN ACCORDANCE WITHTHE TERMS OF PARALLEL SETTLEMENT AGREEMENTS IN RELATEDMATTERS. ADDITIONALLY, UBS SECURITIES LLC CONSENTED TO ACENSURE, AND AN UNDERTAKING.


i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THIS MATTERIS PART OF AN INVESTIGATION THAT INITIALLY FOCUSED ON THE FIRM'SFAILURE ACROSS MULTIPLE DESKS WITHIN THE REVIEW PERIOD TOREASONABLY PREVENT THE ENTRY OF CERTAIN ERRONEOUS EQUITY OROPTIONS ORDERS SENT TO EDGX, BATS EXCHANGE, INC. (BZX), BATS Y-EXCHANGE, INC. (BYX), THE NEW YORK STOCK EXCHANGE LLC (NYSE),NYSE AREA, INC. (NYSE ARCA EQUITIES), NYSE MKT LLC (NYSE MKT), THENASDAQ STOCK MARKET LLC (NASDAQ), AND NASDAQ OMX PHLX LLC(PHLX) (COLLECTIVELY THE EXCHANGES). THE FINDINGS STATED THAT ASA RESULT OF THE INVESTIGATION, FINRA'S DEPARTMENT OF MARKETREGULATION DETERMINED THAT THE FIRM FAILED TO HAVE FINANCIALRISK MANAGEMENT CONTROLS REASONABLY DESIGNED TO PREVENTTHE TRANSMISSION OF NUMEROUS ERRONEOUS EQUITY OR OPTIONSORDERS, AND ORDERS THAT EXCEEDED APPROPRIATE PRE-SET CREDITTHRESHOLDS IN THE AGGREGATE FOR ITS CUSTOMERS. ADDITIONALLY,THE FIRM FAILED TO HAVE ADEQUATE SUPERVISORY PROCEDURESDESIGNED TO MANAGE THE FINANCIAL, REGULATORY, AND OTHER RISKSOF MARKET ACCESS. SPECIFICALLY, DURING THE REVIEW PERIOD, UBSVIOLATED SECURITIES EXCHANGE ACT OF 1934 RULE 15C3-5(C), ANDEDGX RULES 3.1 AND 5.1 WHEN IT FAILED TO ESTABLISH, MAINTAIN ANDENFORCE A SYSTEM OF RISK MANAGEMENT CONTROLS ANDSUPERVISORY PROCEDURES REASONABLY DESIGNED TO PREVENT THEENTRY OF ERRONEOUS EQUITY OR OPTIONS ORDERS, BY REJECTINGORDERS THAT EXCEEDED APPROPRIATE PRICE OR SIZE PARAMETERS,ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIOD OF TIME, ORTHAT INDICATED DUPLICATIVE ORDERS. ADDITIONALLY, FROM NOVEMBER30, 2011 THROUGH MARCH 2015, UBS VIOLATED SECURITIES EXCHANGEACT OF 1934 RULE 15C3-5(C)(1)(I), AND EDGX RULES 3.1 AND 5.1 WHEN ITFAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OF RISKMANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO PREVENT THE ENTRY OF ORDERS THATEXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDS IN THEAGGREGATE FOR ITS CUSTOMERS. FURTHERMORE, FROM FEBRUARY2014 TO JULY 2015, UBS VIOLATED SECURITIES EXCHANGE ACT OF 1934RULE 15C3-5(D), AND EDGX RULES 3.1 AND 5.1 WHEN IT APPLIEDCONTROLS TO TWO SPONSORED ACCESS CLIENT FLOWS THAT WERENOT DEVELOPED INDEPENDENTLY OF SUCH CLIENTS. FINALLY, DURINGTHE REVIEW PERIOD, UBS VIOLATED SECURITIES EXCHANGE ACT OF 1934RULE 15C3-5(B), AND EDGX RULES 3.1 AND 5.1 WHEN IT FAILED TOESTABLISH, MAINTAIN AND PRESERVE AN ADEQUATE WRITTENDESCRIPTION OF ITS RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES IN CONNECTION WITH EQUITY AND OPTION ERRONEOUSORDER CONTROLS, AND PRE-SET CREDIT THRESHOLDS FOR EQUITIESAND OPTIONS CLIENTELE.







Initiated By: EDGX EXCHANGE, INC.







WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THIS MATTERIS PART OF AN INVESTIGATION THAT INITIALLY FOCUSED ON THE FIRM'SFAILURE ACROSS MULTIPLE DESKS WITHIN THE REVIEW PERIOD TOREASONABLY PREVENT THE ENTRY OF CERTAIN ERRONEOUS EQUITY OROPTIONS ORDERS SENT TO EDGX, BATS EXCHANGE, INC. (BZX), BATS Y-EXCHANGE, INC. (BYX), THE NEW YORK STOCK EXCHANGE LLC (NYSE),NYSE AREA, INC. (NYSE ARCA EQUITIES), NYSE MKT LLC (NYSE MKT), THENASDAQ STOCK MARKET LLC (NASDAQ), AND NASDAQ OMX PHLX LLC(PHLX) (COLLECTIVELY THE EXCHANGES). THE FINDINGS STATED THAT ASA RESULT OF THE INVESTIGATION, FINRA'S DEPARTMENT OF MARKETREGULATION DETERMINED THAT THE FIRM FAILED TO HAVE FINANCIALRISK MANAGEMENT CONTROLS REASONABLY DESIGNED TO PREVENTTHE TRANSMISSION OF NUMEROUS ERRONEOUS EQUITY OR OPTIONSORDERS, AND ORDERS THAT EXCEEDED APPROPRIATE PRE-SET CREDITTHRESHOLDS IN THE AGGREGATE FOR ITS CUSTOMERS. ADDITIONALLY,THE FIRM FAILED TO HAVE ADEQUATE SUPERVISORY PROCEDURESDESIGNED TO MANAGE THE FINANCIAL, REGULATORY, AND OTHER RISKSOF MARKET ACCESS. SPECIFICALLY, DURING THE REVIEW PERIOD, UBSVIOLATED SECURITIES EXCHANGE ACT OF 1934 RULE 15C3-5(C), ANDEDGX RULES 3.1 AND 5.1 WHEN IT FAILED TO ESTABLISH, MAINTAIN ANDENFORCE A SYSTEM OF RISK MANAGEMENT CONTROLS ANDSUPERVISORY PROCEDURES REASONABLY DESIGNED TO PREVENT THEENTRY OF ERRONEOUS EQUITY OR OPTIONS ORDERS, BY REJECTINGORDERS THAT EXCEEDED APPROPRIATE PRICE OR SIZE PARAMETERS,ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIOD OF TIME, ORTHAT INDICATED DUPLICATIVE ORDERS. ADDITIONALLY, FROM NOVEMBER30, 2011 THROUGH MARCH 2015, UBS VIOLATED SECURITIES EXCHANGEACT OF 1934 RULE 15C3-5(C)(1)(I), AND EDGX RULES 3.1 AND 5.1 WHEN ITFAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OF RISKMANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO PREVENT THE ENTRY OF ORDERS THATEXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDS IN THEAGGREGATE FOR ITS CUSTOMERS. FURTHERMORE, FROM FEBRUARY2014 TO JULY 2015, UBS VIOLATED SECURITIES EXCHANGE ACT OF 1934RULE 15C3-5(D), AND EDGX RULES 3.1 AND 5.1 WHEN IT APPLIEDCONTROLS TO TWO SPONSORED ACCESS CLIENT FLOWS THAT WERENOT DEVELOPED INDEPENDENTLY OF SUCH CLIENTS. FINALLY, DURINGTHE REVIEW PERIOD, UBS VIOLATED SECURITIES EXCHANGE ACT OF 1934RULE 15C3-5(B), AND EDGX RULES 3.1 AND 5.1 WHEN IT FAILED TOESTABLISH, MAINTAIN AND PRESERVE AN ADEQUATE WRITTENDESCRIPTION OF ITS RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES IN CONNECTION WITH EQUITY AND OPTION ERRONEOUSORDER CONTROLS, AND PRE-SET CREDIT THRESHOLDS FOR EQUITIESAND OPTIONS CLIENTELE.


Resolution:


Sanction Details: THE FIRM WAS CENSURED, FINED AN AGGREGATE FINE OF $1,250,000, OFWHICH $25,000 SHALL BE PAID TO EDGX AND UNDERTAKES TO ADDRESSTHE MARKET ACCESS RULE DEFICIENCIES DESCRIBED ABOVE TOENSURE THAT THE FIRM HAS IMPLEMENTED PROCEDURES THAT AREREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE RULES ANDREGULATIONS CITED HEREIN. ACCEPTANCE OF THIS AWC ISCONDITIONED UPON ACCEPTANCE OF SIMILAR SETTLEMENTAGREEMENTS IN RELATED MATTERS BETWEEN UBS AND EACH OF THEFOLLOWING SELF-REGULATORY ORGANIZATIONS: BATS EXCHANGE, INC.;BATS Y-EXCHANGE, INC.; NYSE REGULATION, INC. ON BEHALF OF THENEW YORK STOCK EXCHANGE LLC, NYSE MKT LLC (NYSE MKT EQUITIESAND NYSE MKT OPTIONS MARKETS), AND NYSE ARCA, INC.; THE NASDAQSTOCK MARKET LLC; NASDAQ OMX PHLX LLC; AND FINRA.


No








THE FIRM WAS CENSURED, FINED AN AGGREGATE FINE OF $1,250,000, OFWHICH $25,000 SHALL BE PAID TO EDGX AND UNDERTAKES TO ADDRESSTHE MARKET ACCESS RULE DEFICIENCIES DESCRIBED ABOVE TOENSURE THAT THE FIRM HAS IMPLEMENTED PROCEDURES THAT AREREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE RULES ANDREGULATIONS CITED HEREIN. ACCEPTANCE OF THIS AWC ISCONDITIONED UPON ACCEPTANCE OF SIMILAR SETTLEMENTAGREEMENTS IN RELATED MATTERS BETWEEN UBS AND EACH OF THEFOLLOWING SELF-REGULATORY ORGANIZATIONS: BATS EXCHANGE, INC.;BATS Y-EXCHANGE, INC.; NYSE REGULATION, INC. ON BEHALF OF THENEW YORK STOCK EXCHANGE LLC, NYSE MKT LLC (NYSE MKT EQUITIESAND NYSE MKT OPTIONS MARKETS), AND NYSE ARCA, INC.; THE NASDAQSTOCK MARKET LLC; NASDAQ OMX PHLX LLC; AND FINRA.



Allegations: FINRA'S DEPARTMENT OF MARKET REGULATION (THE STAFF), ON BEHALFOF EDGX EXCHANGE, INC., AS WELL AS VARIOUS OTHER SECURITIESEXCHANGES AND FINRA, CONDUCTED A REVIEW OF THE FIRM'SCOMPLIANCE WITH SEC RULE 15C3-5 AND EDGX RULES 3.1 AND 5.1DURING THE REVIEW PERIOD BEGINNING ON JULY 14, 2011, ANDCONTINUING THROUGH AT LEAST JULY 2015. AS A RESULT OF THEINVESTIGATION, THE STAFF DETERMINED THAT UBS FAILED TO HAVEFINANCIAL RISK MANAGEMENT CONTROLS REASONABLY DESIGNED TOPREVENT THE TRANSMISSION OF NUMEROUS ERRONEOUS EQUITY OROPTIONS ORDERS, AND ORDERS THAT EXCEEDED APPROPRIATE PRE-SETCREDIT THRESHOLDS IN THE AGGREGATE FOR ITS CUSTOMERS.ADDITIONALLY, UBS FAILED TO HAVE ADEQUATE SUPERVISORYPROCEDURES DESIGNED TO MANAGE THE FINANCIAL, REGULATORY, ANDOTHER RISKS OF MARKET ACCESS. SPECIFICALLY, DURING THE REVIEWPERIOD, UBS VIOLATED SEC RULE 15C3-5(C) AND EDGX RULES 3.1 AND 5.1WHEN IT FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OFRISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO PREVENT THE ENTRY OF ERRONEOUSEQUITY OR OPTIONS ORDERS, BY REJECTING ORDERS THAT EXCEEDEDAPPROPRIATE PRICE OR SIZE PARAMETERS, ON AN ORDER-BY-ORDERBASIS OR OVER A SHORT PERIOD OF TIME, OR THAT INDICATEDDUPLICATIVE ORDERS.







Initiated By: EDGX EXCHANGE, INC.









FINRA'S DEPARTMENT OF MARKET REGULATION (THE STAFF), ON BEHALFOF EDGX EXCHANGE, INC., AS WELL AS VARIOUS OTHER SECURITIESEXCHANGES AND FINRA, CONDUCTED A REVIEW OF THE FIRM'SCOMPLIANCE WITH SEC RULE 15C3-5 AND EDGX RULES 3.1 AND 5.1DURING THE REVIEW PERIOD BEGINNING ON JULY 14, 2011, ANDCONTINUING THROUGH AT LEAST JULY 2015. AS A RESULT OF THEINVESTIGATION, THE STAFF DETERMINED THAT UBS FAILED TO HAVEFINANCIAL RISK MANAGEMENT CONTROLS REASONABLY DESIGNED TOPREVENT THE TRANSMISSION OF NUMEROUS ERRONEOUS EQUITY OROPTIONS ORDERS, AND ORDERS THAT EXCEEDED APPROPRIATE PRE-SETCREDIT THRESHOLDS IN THE AGGREGATE FOR ITS CUSTOMERS.ADDITIONALLY, UBS FAILED TO HAVE ADEQUATE SUPERVISORYPROCEDURES DESIGNED TO MANAGE THE FINANCIAL, REGULATORY, ANDOTHER RISKS OF MARKET ACCESS. SPECIFICALLY, DURING THE REVIEWPERIOD, UBS VIOLATED SEC RULE 15C3-5(C) AND EDGX RULES 3.1 AND 5.1WHEN IT FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OFRISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO PREVENT THE ENTRY OF ERRONEOUSEQUITY OR OPTIONS ORDERS, BY REJECTING ORDERS THAT EXCEEDEDAPPROPRIATE PRICE OR SIZE PARAMETERS, ON AN ORDER-BY-ORDERBASIS OR OVER A SHORT PERIOD OF TIME, OR THAT INDICATEDDUPLICATIVE ORDERS.


Resolution:


Sanction Details: UNDER THE OFFER OF SETTLEMENT AND CONSENT, UBS AGREED TO PAYA TOTAL FINE OF $1,250.000, OF WHICH $25,000 SHALL BE PAID TO EDGXEXCHANGE INC. AND THE REMAINING AMOUNT SHALL BE PAID TO (I) NYSEMKT LLC OPTIONS MARKET; (II) NYSE MKT LLC EQUITIES MARKET; (III) THENASDAQ STOCK MARKET LLC; (IV) NASDAQ OMX PHLX LLC; (V) BATSEXCHANGE, INC.; (VI) BATS Y-EXCHANGE, INC.; (VII)NYSE ARCA INC. ; (VIII)FINRA; AND (IX) THE NEW YORK STOCK EXCHANGE IN ACCORDANCE WITHTHE TERMS OF PARALLEL SETTLEMENT AGREEMENTS IN RELATEDMATTERS. ADDITIONALLY, UBS SECURITIES LLC CONSENTED TO ACENSURE, AND AN UNDERTAKING.




i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THIS MATTERIS PART OF AN INVESTIGATION THAT INITIALLY FOCUSED ON THE FIRM'SFAILURE ACROSS MULTIPLE DESKS WITHIN THE REVIEW PERIOD TOREASONABLY PREVENT THE ENTRY OF CERTAIN ERRONEOUS EQUITY OROPTIONS ORDERS SENT TO THE BATS Y-EXCHANGE, INC. (BYX), BATSEXCHANGE, INC. (BZX), EDGX EXCHANGE, INC. (EDGX), THE NEW YORKSTOCK EXCHANGE LLC (NYSE), NYSE ARCA, INC. (NYSE ARCA EQUITIES),NYSE MKT LLC (NYSE MKT), THE NASDAQ STOCK MARKET LLC (NASDAQ),AND NASDAQ OMX PHLX LLC (PHLX) (COLLECTIVELY THE EXCHANGES). ASA RESULT OF THE INVESTIGATION, FINRA'S DEPARTMENT OF MARKETREGULATION DETERMINED THAT THE FIRM FAILED TO HAVE FINANCIALRISK MANAGEMENT CONTROLS REASONABLY DESIGNED TO PREVENTTHE TRANSMISSION OF NUMEROUS ERRONEOUS EQUITY OR OPTIONSORDERS, AND ORDERS THAT EXCEEDED APPROPRIATE PRE-SET CREDITTHRESHOLDS IN THE AGGREGATE FOR ITS CUSTOMERS. ADDITIONALLY,THE FIRM FAILED TO HAVE ADEQUATE SUPERVISORY PROCEDURESDESIGNED TO MANAGE THE FINANCIAL, REGULATORY, AND OTHER RISKSOF MARKET ACCESS. SPECIFICALLY, DURING THE REVIEW PERIOD, UBSVIOLATED SECURITIES EXCHANGE ACT OF 1934 RULE 15C3-5(C), AND BYXRULES 3.1 AND 5.1 WHEN IT FAILED TO ESTABLISH, MAINTAIN ANDENFORCE A SYSTEM OF RISK MANAGEMENT CONTROLS ANDSUPERVISORY PROCEDURES REASONABLY DESIGNED TO PREVENT THEENTRY OF ERRONEOUS EQUITY OR OPTIONS ORDERS, BY REJECTINGORDERS THAT EXCEEDED APPROPRIATE PRICE OR SIZE PARAMETERS,ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIOD OF TIME, ORTHAT INDICATED DUPLICATIVE ORDERS. ADDITIONALLY, FROM NOVEMBER30, 2011 THROUGH MARCH 2015, UBS VIOLATED SECURITIES EXCHANGEACT OF 1934 RULE 15C3-5(C)(1)(I), AND BYX RULES 3.1 AND 5.1 WHEN ITFAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OF RISKMANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO PREVENT THE ENTRY OF ORDERS THATEXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDS IN THEAGGREGATE FOR ITS CUSTOMERS. FURTHERMORE, FROM FEBRUARY2014 TO JULY 2015, UBS VIOLATED SECURITIES EXCHANGE ACT OF 1934RULE 15C3-5(D), AND BYX RULES 3.1 AND 5.1 WHEN IT APPLIED CONTROLSTO TWO SPONSORED ACCESS CLIENT FLOWS THAT WERE NOTDEVELOPED INDEPENDENTLY OF SUCH CLIENTS. FINALLY, DURING THEREVIEW PERIOD, UBS VIOLATED SECURITIES EXCHANGE ACT OF 1934RULE 15C3-5(B), AND BYX RULES 3.1 AND 5.1 WHEN IT FAILED TOESTABLISH, MAINTAIN AND PRESERVE AN ADEQUATE WRITTENDESCRIPTION OF ITS RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES IN CONNECTION WITH EQUITY AND OPTION ERRONEOUSORDER CONTROLS, AND PRE-SET CREDIT THRESHOLDS FOR EQUITIESAND OPTIONS CLIENTELE.







Initiated By: BATS Y-EXCHANGE, INC.




WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THIS MATTERIS PART OF AN INVESTIGATION THAT INITIALLY FOCUSED ON THE FIRM'SFAILURE ACROSS MULTIPLE DESKS WITHIN THE REVIEW PERIOD TOREASONABLY PREVENT THE ENTRY OF CERTAIN ERRONEOUS EQUITY OROPTIONS ORDERS SENT TO THE BATS Y-EXCHANGE, INC. (BYX), BATSEXCHANGE, INC. (BZX), EDGX EXCHANGE, INC. (EDGX), THE NEW YORKSTOCK EXCHANGE LLC (NYSE), NYSE ARCA, INC. (NYSE ARCA EQUITIES),NYSE MKT LLC (NYSE MKT), THE NASDAQ STOCK MARKET LLC (NASDAQ),AND NASDAQ OMX PHLX LLC (PHLX) (COLLECTIVELY THE EXCHANGES). ASA RESULT OF THE INVESTIGATION, FINRA'S DEPARTMENT OF MARKETREGULATION DETERMINED THAT THE FIRM FAILED TO HAVE FINANCIALRISK MANAGEMENT CONTROLS REASONABLY DESIGNED TO PREVENTTHE TRANSMISSION OF NUMEROUS ERRONEOUS EQUITY OR OPTIONSORDERS, AND ORDERS THAT EXCEEDED APPROPRIATE PRE-SET CREDITTHRESHOLDS IN THE AGGREGATE FOR ITS CUSTOMERS. ADDITIONALLY,THE FIRM FAILED TO HAVE ADEQUATE SUPERVISORY PROCEDURESDESIGNED TO MANAGE THE FINANCIAL, REGULATORY, AND OTHER RISKSOF MARKET ACCESS. SPECIFICALLY, DURING THE REVIEW PERIOD, UBSVIOLATED SECURITIES EXCHANGE ACT OF 1934 RULE 15C3-5(C), AND BYXRULES 3.1 AND 5.1 WHEN IT FAILED TO ESTABLISH, MAINTAIN ANDENFORCE A SYSTEM OF RISK MANAGEMENT CONTROLS ANDSUPERVISORY PROCEDURES REASONABLY DESIGNED TO PREVENT THEENTRY OF ERRONEOUS EQUITY OR OPTIONS ORDERS, BY REJECTINGORDERS THAT EXCEEDED APPROPRIATE PRICE OR SIZE PARAMETERS,ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIOD OF TIME, ORTHAT INDICATED DUPLICATIVE ORDERS. ADDITIONALLY, FROM NOVEMBER30, 2011 THROUGH MARCH 2015, UBS VIOLATED SECURITIES EXCHANGEACT OF 1934 RULE 15C3-5(C)(1)(I), AND BYX RULES 3.1 AND 5.1 WHEN ITFAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OF RISKMANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO PREVENT THE ENTRY OF ORDERS THATEXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDS IN THEAGGREGATE FOR ITS CUSTOMERS. FURTHERMORE, FROM FEBRUARY2014 TO JULY 2015, UBS VIOLATED SECURITIES EXCHANGE ACT OF 1934RULE 15C3-5(D), AND BYX RULES 3.1 AND 5.1 WHEN IT APPLIED CONTROLSTO TWO SPONSORED ACCESS CLIENT FLOWS THAT WERE NOTDEVELOPED INDEPENDENTLY OF SUCH CLIENTS. FINALLY, DURING THEREVIEW PERIOD, UBS VIOLATED SECURITIES EXCHANGE ACT OF 1934RULE 15C3-5(B), AND BYX RULES 3.1 AND 5.1 WHEN IT FAILED TOESTABLISH, MAINTAIN AND PRESERVE AN ADEQUATE WRITTENDESCRIPTION OF ITS RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES IN CONNECTION WITH EQUITY AND OPTION ERRONEOUSORDER CONTROLS, AND PRE-SET CREDIT THRESHOLDS FOR EQUITIESAND OPTIONS CLIENTELE.










Resolution:


Sanction Details: THE FIRM WAS CENSURED, FINED AN AGGREGATE FINE OF $1,250,000, OFWHICH $50,000 SHALL BE PAID TO BYX AND UNDERTAKES TO ADDRESSTHE MARKET ACCESS RULE DEFICIENCIES DESCRIBED ABOVE TOENSURE THAT THE FIRM HAS IMPLEMENTED PROCEDURES THAT AREREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE RULES ANDREGULATIONS CITED HEREIN. ACCEPTANCE OF THIS AWC ISCONDITIONED UPON ACCEPTANCE OF SIMILAR SETTLEMENTAGREEMENTS IN RELATED MATTERS BETWEEN UBS AND EACH OF THEFOLLOWING SELF-REGULATORY ORGANIZATIONS: BATS EXCHANGE, INC.;EDGX EXCHANGE, INC.; NYSE REGULATION, INC. ON BEHALF OF THE NEWYORK STOCK EXCHANGE LLC, NYSE MKT LLC (NYSE MKT EQUITIES ANDNYSE MKT OPTIONS MARKETS), AND NYSE ARCA, INC.; THE NASDAQSTOCK MARKET LLC; NASDAQ OMX PHLX LLC; AND FINRA.



No









Initiated By: BATS Y-EXCHANGE, INC.









Allegations: FINRA'S DEPARTMENT OF MARKET REGULATION (THE STAFF), ON BEHALFOF BATS Y-EXCHANGE, INC. AS WELL AS VARIOUS OTHER SECURITIESEXCHANGES AND FINRA, CONDUCTED A REVIEW OF THE FIRM'SCOMPLIANCE WITH SEC RULE 15C3-5 AND BYX RULES 3.1 AND 5.1 DURINGTHE REVIEW PERIOD BEGINNING ON JULY 14, 2011, AND CONTINUINGTHROUGH AT LEAST JULY 2015. AS A RESULT OF THE INVESTIGATION, THESTAFF DETERMINED THAT UBS FAILED TO HAVE FINANCIAL RISKMANAGEMENT CONTROLS REASONABLY DESIGNED TO PREVENT THETRANSMISSION OFNUMEROUS ERRONEOUS EQUITY OR OPTIONS ORDERS, AND ORDERSTHAT EXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDS IN THEAGGREGATE FOR ITS CUSTOMERS. ADDITIONALLY, UBS FAILED TO HAVEADEQUATE SUPERVISORY PROCEDURES DESIGNED TO MANAGE THEFINANCIAL, REGULATORY, AND OTHER RISKS OF MARKET ACCESS.SPECIFICALLY, DURING THE REVIEW PERIOD, UBS VIOLATED SEC RULE15C3-5(C) AND BYX RULES 3.1 AND 5.1 WHEN IT FAILED TO ESTABLISH,MAINTAIN AND ENFORCE A SYSTEM OF RISK MANAGEMENT CONTROLSAND SUPERVISORY PROCEDURES REASONABLY DESIGNED TO PREVENTTHE ENTRY OF ERRONEOUS EQUITY OR OPTIONS ORDERS, BYREJECTING ORDERS THAT EXCEEDED APPROPRIATE PRICE OR SIZEPARAMETERS, ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIODOF TIME, OR THAT INDICATED DUPLICATIVE ORDERS.



Resolution:









Sanction Details: UNDER THE OFFER OF SETTLEMENT AND CONSENT, UBS AGREED TO PAYA TOTAL FINE OF $1,250.000, OF WHICH $50,000.00 SHALL BE PAID TO BATSY-EXCHANGE, INC. AND THE REMAINING AMOUNT SHALL BE PAID TO (I)NYSE MKT LLC OPTIONS MARKET; (II) NYSE MKT LLC EQUITIES MARKET;(III) THE NASDAQ STOCK MARKET LLC; (IV) NASDAQ OMX PHLX LLC; (V)BATS EXCHANGE, INC.; (VI)EDGX EXCHANGE, INC. (VII)NYSE ARCA INC. ;(VIII) FINRA; AND (IX) NEW YORK STOCK EXCHANGE IN ACCORDANCE WITHTHE TERMS OF PARALLEL SETTLEMENT AGREEMENTS IN RELATEDMATTERS.ADDITIONALLY, UBS SECURITIES LLC CONSENTED TO A CENSURE, AND ANUNDERTAKING.

CensureMonetary/Fine $50,000.00


i


Allegations: THIS MATTER IS PART OF AN INVESTIGATION THAT INITIALLY FOCUSED ONTHE FIRM'S FAILURE ACROSS MULTIPLE DESKS WITHIN THE REVIEWPERIOD TO REASONABLY PREVENT THE ENTRY OF CERTAIN ERRONEOUSEQUITY OR OPTIONS ORDERS SENT TO NYSE MKT, NYSE ARCA, INC.(NYSE ARCA EQUITIES), THE NEW YORK STOCK EXCHANGE LLC (NYSE),THE NASDAQ STOCK MARKET LLC (NASDAQ), NASDAQ OMX PHLX LLC(PHLX), BATS EXCHANGE, INC. (BZX), BATS Y-EXCHANGE, INC. (BYX), ANDEDGX EXCHANGE, INC. (EDGX) (COLLECTIVELY THE EXCHANGES). AS ARESULT OF THE INVESTIGATION, FINRA'S DEPARTMENT OF MARKETREGULATION DETERMINED THAT UBS FAILED TO HAVE FINANCIAL RISKMANAGEMENT CONTROLS REASONABLY DESIGNED TO PREVENT THETRANSMISSION OF NUMEROUS ERRONEOUS EQUITY OR OPTIONSORDERS, AND ORDERS THAT EXCEEDED APPROPRIATE PRE-SET CREDITTHRESHOLDS IN THE AGGREGATE FOR ITS CUSTOMERS. ADDITIONALLY,UBS FAILED TO HAVE ADEQUATE SUPERVISORY PROCEDURES DESIGNEDTO MANAGE THE FINANCIAL, REGULATORY, AND OTHER RISKS OFMARKET ACCESS. SPECIFICALLY, DURING THE REVIEW PERIOD, UBSVIOLATED SEC RULE 15C3-5(C) AND NYSE MKT RULES 320 AND 476(A)(6)WHEN IT FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OFRISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO PREVENT THE ENTRY OF ERRONEOUSEQUITY OR OPTIONS ORDERS, BY REJECTING ORDERS THAT EXCEEDEDAPPROPRIATE PRICE OR SIZE PARAMETERS, ON AN ORDER-BY-ORDERBASIS OR OVER A SHORT PERIOD OF TIME, OR THAT INDICATEDDUPLICATIVE ORDERS. FROM NOVEMBER 30, 2011, THROUGH MARCH2015, UBS VIOLATED SEC RULE 15C3-5(C)(1)(I) AND NYSE MKT RULES 320AND 476(A)(6) WHEN IT FAILED TO ESTABLISH, MAINTAIN AND ENFORCE ASYSTEM OF RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES REASONABLY DESIGNED TO PREVENT THE ENTRY OFORDERS THAT EXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDSIN THE AGGREGATE FOR ITS CUSTOMERS. FINALLY, DURING THE REVIEWPERIOD, UBS VIOLATED SEC RULE 15C3-5(B) AND NYSE MKT RULES 320AND 476(A)(6) WHEN IT FAILED TO ESTABLISH, MAINTAIN AND PRESERVEAN ADEQUATE WRITTEN DESCRIPTION OF ITS RISK MANAGEMENTCONTROLS AND SUPERVISORY PROCEDURES IN CONNECTION WITHEQUITY AND OPTION ERRONEOUS ORDER CONTROLS, AND PRE-SETCREDIT THRESHOLDS FOR EQUITIES AND OPTIONS CLIENTELE.







Initiated By: NYSE MKT LLC (NYSE MKT OPTIONS MARKET)


Other


N/A





THIS MATTER IS PART OF AN INVESTIGATION THAT INITIALLY FOCUSED ONTHE FIRM'S FAILURE ACROSS MULTIPLE DESKS WITHIN THE REVIEWPERIOD TO REASONABLY PREVENT THE ENTRY OF CERTAIN ERRONEOUSEQUITY OR OPTIONS ORDERS SENT TO NYSE MKT, NYSE ARCA, INC.(NYSE ARCA EQUITIES), THE NEW YORK STOCK EXCHANGE LLC (NYSE),THE NASDAQ STOCK MARKET LLC (NASDAQ), NASDAQ OMX PHLX LLC(PHLX), BATS EXCHANGE, INC. (BZX), BATS Y-EXCHANGE, INC. (BYX), ANDEDGX EXCHANGE, INC. (EDGX) (COLLECTIVELY THE EXCHANGES). AS ARESULT OF THE INVESTIGATION, FINRA'S DEPARTMENT OF MARKETREGULATION DETERMINED THAT UBS FAILED TO HAVE FINANCIAL RISKMANAGEMENT CONTROLS REASONABLY DESIGNED TO PREVENT THETRANSMISSION OF NUMEROUS ERRONEOUS EQUITY OR OPTIONSORDERS, AND ORDERS THAT EXCEEDED APPROPRIATE PRE-SET CREDITTHRESHOLDS IN THE AGGREGATE FOR ITS CUSTOMERS. ADDITIONALLY,UBS FAILED TO HAVE ADEQUATE SUPERVISORY PROCEDURES DESIGNEDTO MANAGE THE FINANCIAL, REGULATORY, AND OTHER RISKS OFMARKET ACCESS. SPECIFICALLY, DURING THE REVIEW PERIOD, UBSVIOLATED SEC RULE 15C3-5(C) AND NYSE MKT RULES 320 AND 476(A)(6)WHEN IT FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OFRISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO PREVENT THE ENTRY OF ERRONEOUSEQUITY OR OPTIONS ORDERS, BY REJECTING ORDERS THAT EXCEEDEDAPPROPRIATE PRICE OR SIZE PARAMETERS, ON AN ORDER-BY-ORDERBASIS OR OVER A SHORT PERIOD OF TIME, OR THAT INDICATEDDUPLICATIVE ORDERS. FROM NOVEMBER 30, 2011, THROUGH MARCH2015, UBS VIOLATED SEC RULE 15C3-5(C)(1)(I) AND NYSE MKT RULES 320AND 476(A)(6) WHEN IT FAILED TO ESTABLISH, MAINTAIN AND ENFORCE ASYSTEM OF RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES REASONABLY DESIGNED TO PREVENT THE ENTRY OFORDERS THAT EXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDSIN THE AGGREGATE FOR ITS CUSTOMERS. FINALLY, DURING THE REVIEWPERIOD, UBS VIOLATED SEC RULE 15C3-5(B) AND NYSE MKT RULES 320AND 476(A)(6) WHEN IT FAILED TO ESTABLISH, MAINTAIN AND PRESERVEAN ADEQUATE WRITTEN DESCRIPTION OF ITS RISK MANAGEMENTCONTROLS AND SUPERVISORY PROCEDURES IN CONNECTION WITHEQUITY AND OPTION ERRONEOUS ORDER CONTROLS, AND PRE-SETCREDIT THRESHOLDS FOR EQUITIES AND OPTIONS CLIENTELE.


Resolution:

Other Sanctions Ordered: ADDRESS THE MARKET ACCESS RULE DEFICIENCIES DESCRIBED IN THISDECISION TO ENSURE THAT UBS HAS IMPLEMENTED PROCEDURES THATARE REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE RULESAND REGULATIONS CITED HEREIN

Sanction Details: A HEARING OFFICER AT FINRA CONSIDERED A STIPULATION OF FACTSAND CONSENT TO PENALTY ENTERED INTO BETWEEN FINRA'SDEPARTMENT OF MARKET REGULATION ON BEHALF OF NYSEREGULATION, INC. AND UBS SECURITIES LLC, A MEMBER ORGANIZATIONOF NYSE MKT LLC (NYSE MKT). UBS IS CENSURED AND FINED $75,000.UNDER THE STIPULATION OF FACTS AND CONSENT TO PENALTY, UBSAGREED TO PAY A TOTAL FINE OF $1,250,000, OF WHICH $75,000 SHALL BEPAID TO NYSE MKT OPTIONS MARKET AND THE REMAINING AMOUNTSHALL BE PAID TO NYSE MKT LLC EQUITIES MARKET; NYSE ARCA, INC.;THE NASDAQ STOCK MARKET LLC; NASDAQ OMX PHLX LLC; BATSEXCHANGE, INC.; BATS Y-EXCHANGE, INC.; EDGX EXCHANGE, INC.; FINRA;AND THE NEW YORK STOCK EXCHANGE IN ACCORDANCE WITH THETERMS OF PARALLEL SETTLEMENT AGREEMENTS IN RELATED MATTERSBETWEEN UBS AND EACH OF THESE SELF-REGULATORY ORGANIZATIONS.UBS IS ALSO ORDERED TO ADDRESS THE MARKET ACCESS RULEDEFICIENCIES DESCRIBED IN THIS DECISION TO ENSURE THAT UBS HASIMPLEMENTED PROCEDURES THAT ARE REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH THE RULES AND REGULATIONS CITEDHEREIN.


No


Decision





www.finra.org/brokercheck User GuidanceA HEARING OFFICER AT FINRA CONSIDERED A STIPULATION OF FACTSAND CONSENT TO PENALTY ENTERED INTO BETWEEN FINRA'SDEPARTMENT OF MARKET REGULATION ON BEHALF OF NYSEREGULATION, INC. AND UBS SECURITIES LLC, A MEMBER ORGANIZATIONOF NYSE MKT LLC (NYSE MKT). UBS IS CENSURED AND FINED $75,000.UNDER THE STIPULATION OF FACTS AND CONSENT TO PENALTY, UBSAGREED TO PAY A TOTAL FINE OF $1,250,000, OF WHICH $75,000 SHALL BEPAID TO NYSE MKT OPTIONS MARKET AND THE REMAINING AMOUNTSHALL BE PAID TO NYSE MKT LLC EQUITIES MARKET; NYSE ARCA, INC.;THE NASDAQ STOCK MARKET LLC; NASDAQ OMX PHLX LLC; BATSEXCHANGE, INC.; BATS Y-EXCHANGE, INC.; EDGX EXCHANGE, INC.; FINRA;AND THE NEW YORK STOCK EXCHANGE IN ACCORDANCE WITH THETERMS OF PARALLEL SETTLEMENT AGREEMENTS IN RELATED MATTERSBETWEEN UBS AND EACH OF THESE SELF-REGULATORY ORGANIZATIONS.UBS IS ALSO ORDERED TO ADDRESS THE MARKET ACCESS RULEDEFICIENCIES DESCRIBED IN THIS DECISION TO ENSURE THAT UBS HASIMPLEMENTED PROCEDURES THAT ARE REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH THE RULES AND REGULATIONS CITEDHEREIN.

Regulator Statement IN DETERMINING TO RESOLVE THIS MATTER IN THE MANNER SET FORTHIN THE STIPULATION OF FACTS AND CONSENT TO PENALTY, FINRA'SDEPARTMENT OF MARKET REGULATION CONSIDERED THAT UBS ON ITSOWN ACCORD ENGAGED AN OUTSIDE CONSULTANT TO REVIEW ANDMAKE RECOMMENDATIONS TO ENHANCE CONTROLS AND PROCEDURESWITH RESPECT TO CERTAIN ASPECTS OF ITS MARKET ACCESSCONTROLS AND RELATED SUPERVISORY PROCEDURES FORCOMPLIANCE WITH SEC RULE 15C3-5.


Allegations: FINRA'S DEPARTMENT OF MARKET REGULATION (THE STAFF), ON BEHALFOF NYSE MKT LLC (NYSE MKT OPTIONS MARKET), AS WELL AS VARIOUSOTHER SECURITIES EXCHANGES AND FINRA, CONDUCTED A REVIEW OFTHE FIRM'S COMPLIANCE WITH SEC RULE 15C3-5 AND NYSE MKT RULES320 AND 476(A)(6)DURING THE REVIEW PERIOD BEGINNING ON JULY 14,2011, AND CONTINUING THROUGH AT LEAST JULY 2015. AS A RESULT OFTHE INVESTIGATION, THE STAFF DETERMINED THAT UBS FAILED TO HAVEFINANCIAL RISK MANAGEMENT CONTROLS REASONABLY DESIGNED TOPREVENT THE TRANSMISSION OF NUMEROUS ERRONEOUS EQUITY OROPTIONS ORDERS, AND ORDERS THAT EXCEEDED APPROPRIATE PRE-SETCREDIT THRESHOLDS IN THE AGGREGATE FOR ITS CUSTOMERS.ADDITIONALLY, UBS FAILED TO HAVE ADEQUATE SUPERVISORYPROCEDURES DESIGNED TO MANAGE THE FINANCIAL, REGULATORY, ANDOTHER RISKS OF MARKET ACCESS. SPECIFICALLY, DURING THE REVIEWPERIOD, UBS VIOLATED SEC RULE 15C3-5(C) AND NYSE MKT RULES 320AND 476(A)(6) WHEN IT FAILED TO ESTABLISH, MAINTAIN AND ENFORCE ASYSTEM OF RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES REASONABLY DESIGNED TO PREVENT THE ENTRY OFERRONEOUS EQUITY OR OPTIONS ORDERS, BY REJECTING ORDERS THATEXCEEDED APPROPRIATE PRICE OR SIZE PARAMETERS, ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIOD OF TIME, OR THATINDICATED DUPLICATIVE ORDERS.







Initiated By: NYSE MKT LLC (NYSE MKT OPTIONS MARKET)




CENSURE





FINRA'S DEPARTMENT OF MARKET REGULATION (THE STAFF), ON BEHALFOF NYSE MKT LLC (NYSE MKT OPTIONS MARKET), AS WELL AS VARIOUSOTHER SECURITIES EXCHANGES AND FINRA, CONDUCTED A REVIEW OFTHE FIRM'S COMPLIANCE WITH SEC RULE 15C3-5 AND NYSE MKT RULES320 AND 476(A)(6)DURING THE REVIEW PERIOD BEGINNING ON JULY 14,2011, AND CONTINUING THROUGH AT LEAST JULY 2015. AS A RESULT OFTHE INVESTIGATION, THE STAFF DETERMINED THAT UBS FAILED TO HAVEFINANCIAL RISK MANAGEMENT CONTROLS REASONABLY DESIGNED TOPREVENT THE TRANSMISSION OF NUMEROUS ERRONEOUS EQUITY OROPTIONS ORDERS, AND ORDERS THAT EXCEEDED APPROPRIATE PRE-SETCREDIT THRESHOLDS IN THE AGGREGATE FOR ITS CUSTOMERS.ADDITIONALLY, UBS FAILED TO HAVE ADEQUATE SUPERVISORYPROCEDURES DESIGNED TO MANAGE THE FINANCIAL, REGULATORY, ANDOTHER RISKS OF MARKET ACCESS. SPECIFICALLY, DURING THE REVIEWPERIOD, UBS VIOLATED SEC RULE 15C3-5(C) AND NYSE MKT RULES 320AND 476(A)(6) WHEN IT FAILED TO ESTABLISH, MAINTAIN AND ENFORCE ASYSTEM OF RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES REASONABLY DESIGNED TO PREVENT THE ENTRY OFERRONEOUS EQUITY OR OPTIONS ORDERS, BY REJECTING ORDERS THATEXCEEDED APPROPRIATE PRICE OR SIZE PARAMETERS, ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIOD OF TIME, OR THATINDICATED DUPLICATIVE ORDERS.


Resolution:


Sanction Details: UNDER THE OFFER OF SETTLEMENT AND CONSENT, UBS AGREED TO PAYA TOTAL FINE OF $1,250.000, OF WHICH $75,000 SHALL BE PAID TO NYSEMKT LLC EQUITIES MARKET AND THE REMAINING AMOUNT SHALL BE PAIDTO (I)NYSE ARCA, INC. ; (II) NYSE MKT LLC EQUITIES MARKET; (III) THENASDAQ STOCK MARKET LLC; (IV) NASDAQ OMX PHLX LLC; (V) BATSEXCHANGE, INC.; (VI) BATS Y-EXCHANGE, INC.; (VII) EDGX EXCHANGE,INC ; (VIII) FINRA;AND (IX) THE NEW YORK STOCK EXCHANGE IN ACCORDANCE WITH THETERMS OF PARALLEL SETTLEMENT AGREEMENTS IN RELATED MATTERS.ADDITIONALLY, UBS SECURITIES LLC CONSENTED TO A CENSURE, AND ANUNDERTAKING.


Decision


i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THIS MATTERIS PART OF AN INVESTIGATION THAT INITIALLY FOCUSED ON THE FIRM'SFAILURE ACROSS MULTIPLE DESKS WITHIN THE REVIEW PERIOD TOREASONABLY PREVENT THE ENTRY OF CERTAIN ERRONEOUS EQUITY OROPTIONS ORDERS SENT TO THE NASDAQ STOCK MARKET LLC (NASDAQ),NASDAQ OMX PHLX LLC (PHLX), BATS EXCHANGE, INC. (BZX), BATS Y-EXCHANGE, INC. (BYX), EDGX EXCHANGE, INC. (EDGX), THE NEW YORKSTOCK EXCHANGE LLC (NYSE), NYSE ARCA, INC. (NYSE ARCA EQUITIES),AND NYSE MKT LLC (NYSE MKT) (COLLECTIVELY THE EXCHANGES). THEFINDINGS STATED THAT AS A RESULT OF THE INVESTIGATION, FINRADETERMINED THAT THE FIRM FAILED TO HAVE FINANCIAL RISKMANAGEMENT CONTROLS REASONABLY DESIGNED TO PREVENT THETRANSMISSION OF NUMEROUS ERRONEOUS EQUITY OR OPTIONSORDERS, AND ORDERS THAT EXCEEDED APPROPRIATE PRE-SET CREDITTHRESHOLDS IN THE AGGREGATE FOR ITS CUSTOMERS AND THE FIRMFAILED TO HAVE ADEQUATE SUPERVISORY PROCEDURES DESIGNED TOMANAGE THE FINANCIAL, REGULATORY, AND OTHER RISKS OF MARKETACCESS. THE FIRM FAILED TO ESTABLISH, MAINTAIN AND ENFORCE ASYSTEM OF RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES REASONABLY DESIGNED TO PREVENT THE ENTRY OFERRONEOUS EQUITY OR OPTIONS ORDERS, BY REJECTING ORDERS THATEXCEEDED APPROPRIATE PRICE OR SIZE PARAMETERS, ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIOD OF TIME, OR THATINDICATED DUPLICATIVE ORDERS, AND TO PREVENT THE ENTRY OFORDERS THAT EXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDSIN THE AGGREGATE FOR ITS CUSTOMERS. THE FINDINGS ALSO STATEDTHAT THE FIRM APPLIED CONTROLS TO TWO SPONSORED ACCESSCLIENT FLOWS THAT WERE NOT DEVELOPED INDEPENDENTLY OF SUCHCLIENTS. THE FINDINGS ALSO INCLUDED THAT THE FIRM FAILED TOESTABLISH, MAINTAIN AND PRESERVE AN ADEQUATE WRITTENDESCRIPTION OF ITS RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES IN CONNECTION WITH EQUITY AND OPTION ERRONEOUSORDER CONTROLS, AND PRE-SET CREDIT THRESHOLDS FOR EQUITIESAND OPTIONS CLIENTELE.







Initiated By: FINRA







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THIS MATTERIS PART OF AN INVESTIGATION THAT INITIALLY FOCUSED ON THE FIRM'SFAILURE ACROSS MULTIPLE DESKS WITHIN THE REVIEW PERIOD TOREASONABLY PREVENT THE ENTRY OF CERTAIN ERRONEOUS EQUITY OROPTIONS ORDERS SENT TO THE NASDAQ STOCK MARKET LLC (NASDAQ),NASDAQ OMX PHLX LLC (PHLX), BATS EXCHANGE, INC. (BZX), BATS Y-EXCHANGE, INC. (BYX), EDGX EXCHANGE, INC. (EDGX), THE NEW YORKSTOCK EXCHANGE LLC (NYSE), NYSE ARCA, INC. (NYSE ARCA EQUITIES),AND NYSE MKT LLC (NYSE MKT) (COLLECTIVELY THE EXCHANGES). THEFINDINGS STATED THAT AS A RESULT OF THE INVESTIGATION, FINRADETERMINED THAT THE FIRM FAILED TO HAVE FINANCIAL RISKMANAGEMENT CONTROLS REASONABLY DESIGNED TO PREVENT THETRANSMISSION OF NUMEROUS ERRONEOUS EQUITY OR OPTIONSORDERS, AND ORDERS THAT EXCEEDED APPROPRIATE PRE-SET CREDITTHRESHOLDS IN THE AGGREGATE FOR ITS CUSTOMERS AND THE FIRMFAILED TO HAVE ADEQUATE SUPERVISORY PROCEDURES DESIGNED TOMANAGE THE FINANCIAL, REGULATORY, AND OTHER RISKS OF MARKETACCESS. THE FIRM FAILED TO ESTABLISH, MAINTAIN AND ENFORCE ASYSTEM OF RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES REASONABLY DESIGNED TO PREVENT THE ENTRY OFERRONEOUS EQUITY OR OPTIONS ORDERS, BY REJECTING ORDERS THATEXCEEDED APPROPRIATE PRICE OR SIZE PARAMETERS, ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIOD OF TIME, OR THATINDICATED DUPLICATIVE ORDERS, AND TO PREVENT THE ENTRY OFORDERS THAT EXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDSIN THE AGGREGATE FOR ITS CUSTOMERS. THE FINDINGS ALSO STATEDTHAT THE FIRM APPLIED CONTROLS TO TWO SPONSORED ACCESSCLIENT FLOWS THAT WERE NOT DEVELOPED INDEPENDENTLY OF SUCHCLIENTS. THE FINDINGS ALSO INCLUDED THAT THE FIRM FAILED TOESTABLISH, MAINTAIN AND PRESERVE AN ADEQUATE WRITTENDESCRIPTION OF ITS RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES IN CONNECTION WITH EQUITY AND OPTION ERRONEOUSORDER CONTROLS, AND PRE-SET CREDIT THRESHOLDS FOR EQUITIESAND OPTIONS CLIENTELE.









Resolution:


Sanction Details: THE FIRM WAS CENSURED, FINED AN AGGREGATE FINE OF $1,250,000, OFWHICH $150,000 SHALL BE PAID TO FINRA, AND UNDERTAKES TO ADDRESSTHE MARKET ACCESS RULE DEFICIENCIES DESCRIBED ABOVE TOENSURE THAT THE FIRM HAS IMPLEMENTED PROCEDURES THAT AREREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE RULES ANDREGULATIONS CITED HEREIN. ACCEPTANCE OF THIS AWC ISCONDITIONED UPON ACCEPTANCE OF SIMILAR SETTLEMENTAGREEMENTS IN RELATED MATTERS BETWEEN UBS AND EACH OF THEFOLLOWING SELF-REGULATORY ORGANIZATIONS: NYSE REGULATION,INC. ON BEHALF OF THE NEW YORK STOCK EXCHANGE LLC, NYSE ARCAINC., AND NYSE MKT LLC (NYSE MKT EQUITIES AND NYSE MKT OPTIONSMARKETS); THE NASDAQ STOCK MARKET LLC; NASDAQ OMX PHLX LLC;BATS EXCHANGE, INC.; BATS Y-EXCHANGE, INC.; AND EDGX EXCHANGE,INC. FINE PAID IN FULL JANUARY 26, 2016.

Regulator Statement IN DETERMINING TO RESOLVE THIS MATTER IN THE MANNER SET FORTHHEREIN, FINRA TOOK INTO CONSIDERATION THAT, UBS, ON ITS OWNACCORD, ENGAGED AN OUTSIDE CONSULTANT TO REVIEW AND MAKERECOMMENDATIONS TO ENHANCE CONTROLS AND PROCEDURES WITHRESPECT TO CERTAIN ASPECTS OF THE FIRM'S MARKET ACCESSCONTROLS AND RELATED SUPERVISORY PROCEDURES FORCOMPLIANCE WITH SECURITIES EXCHANGE ACT OF 1934 RULE 15C3-5.


No










Initiated By: FINRA









Allegations: FINRA'S DEPARTMENT OF MARKET REGULATION (THE STAFF), ON BEHALFOF FINRA, AS WELL AS VARIOUS OTHER SECURITIES EXCHANGES,CONDUCTED A REVIEW OF THE FIRM'S COMPLIANCE WITH SEC RULE15C3-5, NASD RULE 3010 AND FINRA RULE 3110 DURING THE REVIEWPERIOD BEGINNING ON JULY 14, 2011, AND CONTINUING THROUGH ATLEAST JULY 2015. AS A RESULT OF THE INVESTIGATION, THE STAFFDETERMINED THAT UBS FAILED TO HAVE FINANCIAL RISK MANAGEMENTCONTROLS REASONABLY DESIGNED TO PREVENT THE TRANSMISSION OFNUMEROUS ERRONEOUS EQUITY OR OPTIONS ORDERS, AND ORDERSTHAT EXCEEDED APPROPRIATE PRE-SET CREDIT THRESHOLDS IN THEAGGREGATE FOR ITS CUSTOMERS. ADDITIONALLY, UBS FAILED TO HAVEADEQUATE SUPERVISORY PROCEDURES DESIGNED TO MANAGE THEFINANCIAL, REGULATORY, AND OTHER RISKS OF MARKET ACCESS.SPECIFICALLY, DURING THE REVIEW PERIOD, UBS VIOLATED SEC RULE15C3-5(C), NASD RULE 3010 AND FINRA RULE 3110 WHEN IT FAILED TOESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OF RISK MANAGEMENTCONTROLS AND SUPERVISORY PROCEDURES REASONABLY DESIGNEDTO PREVENT THE ENTRY OF ERRONEOUS EQUITY OR OPTIONS ORDERS,BY REJECTING ORDERS THAT EXCEEDED APPROPRIATE PRICE OR SIZEPARAMETERS, ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIODOF TIME, OR THAT INDICATED DUPLICATIVE ORDERS.


Resolution:


Sanction Details: UNDER THE OFFER OF SETTLEMENT AND CONSENT, UBS AGREED TO PAYA TOTAL FINE OF $1,250.000, OF WHICH $150,000 SHALL BE PAID TO FINRAAND THE REMAINING AMOUNT SHALL BE PAID TO (I) NYSE MKT LLCOPTIONS MARKET; (II) NYSE MKT LLC EQUITIES MARKET; (III) THE NASDAQSTOCK MARKET LLC; (IV) NASDAQ OMX PHLX LLC; (V) BATS EXCHANGE,INC.; (VI) BATS Y-EXCHANGE, INC.; (VII) EDGX EXCHANGE, INC ;(VIII) NYSEARCA INC.; AND (IX) THE NEW YORK STOCK EXCHANGE IN ACCORDANCEWITH THE TERMS OF PARALLEL SETTLEMENT AGREEMENTS IN RELATEDMATTERS. ADDITIONALLY, UBS SECURITIES LLC CONSENTED TO ACENSURE, AND AN UNDERTAKING.









UNDER THE OFFER OF SETTLEMENT AND CONSENT, UBS AGREED TO PAYA TOTAL FINE OF $1,250.000, OF WHICH $150,000 SHALL BE PAID TO FINRAAND THE REMAINING AMOUNT SHALL BE PAID TO (I) NYSE MKT LLCOPTIONS MARKET; (II) NYSE MKT LLC EQUITIES MARKET; (III) THE NASDAQSTOCK MARKET LLC; (IV) NASDAQ OMX PHLX LLC; (V) BATS EXCHANGE,INC.; (VI) BATS Y-EXCHANGE, INC.; (VII) EDGX EXCHANGE, INC ;(VIII) NYSEARCA INC.; AND (IX) THE NEW YORK STOCK EXCHANGE IN ACCORDANCEWITH THE TERMS OF PARALLEL SETTLEMENT AGREEMENTS IN RELATEDMATTERS. ADDITIONALLY, UBS SECURITIES LLC CONSENTED TO ACENSURE, AND AN UNDERTAKING.


i




Allegations: THE FIRM MADE AND ENTERED INTO AN OFFER OF SETTLEMENT,STIPULATION OF FACTS AND CONSENT TO SANCTIONS, PURSUANT TONASDAQ OMX PHLX LLC RULE 960.7, SOLELY FOR THE PURPOSES OFTHESE PROCEEDINGS AND TO SETTLE AND CONCLUDE ALL DISCIPLINARYACTIONS BY THE NASDAQ OMX PHLX LLC (THE EXCHANGE) BASED ON ORARISING OUT OF THE FACTS HEREINAFTER STIPULATED. THE FIRMSTIPULATES TO THE FACTS, CONSENTS TO THE CONCLUSION OFVIOLATIONS OF A CERTAIN PROVISION OF EXCHANGE RULES, ANDCONSENTS TO THE IMPOSITION OF SANCTIONS SPECIFICALLY INCLUDING,BUT NOT LIMITED TO, CONSENTING TO PAY THE FINE IMPOSED BY THEBUSINESS CONDUCT COMMITTEE OF THE EXCHANGE CONSISTENT WITHTHE OFFER, AND TO COMPLY WITH ALL OTHER SANCTIONS, ALL ASHEREINAFTER SET FORTH, WITHOUT ADMITTING OR DENYING THEALLEGATIONS OR CONCLUSIONS IN THE STATEMENT OF CHARGES. ON415 INSTANCES DURING THE REVIEW PERIOD, THE FIRM, WHILE ACTINGAS A DIRECTED REMOTE STREAMING QUOTE TRADER (DRSQT), FAILED TOQUOTE CONTINUOUS, TWO-SIDED MARKETS IN 99% OF THE OPTIONSSERIES LISTED ON THE EXCHANGE IN AT LEAST 60% OF ITS ASSIGNEDOPTIONS SERIES ON THE EXCHANGE FOR AT LEAST 90% OF THE TRADINGDAY. ON SEVEN SEPARATE TRADE DATES DURING THE REVIEW PERIOD,THE FIRM WHILE ACTING AS A DRSQT, FAILED TO QUOTE: (I) CONTINUOUS,TWO-SIDED MARKETS IN AT LEAST 99% OF THE OPTIONS SERIES LISTEDON THE EXCHANGE IN AT LEAST 60% OF ITS ASSIGNED OPTIONS SERIESFOR AT LEAST 90% OF THE TRADING DAY; AND/OR (II) AT LEAST 99% OFTHE SERIES IN AN OPTION FOR AT LEAST 90% OF THE TRADING DAY ASMEASURED FROM THE TIME IT HAD COMMENCED QUOTING IN THEOPTION TO THE END OF THE TRADING DAY. THE COMMITTEE ACCEPTSTHE FOREGOING STIPULATION OF FACTS, AND ON THE BASIS THEREOFFINDS THAT THE FIRM VIOLATED EXCHANGE RULE 1014(B)(II)(D)(1).








Other


N/A





Resolution:


Sanction Details: THE COMMITTEE BELIEVES THAT THE SANCTIONS PROPOSED BY THEFIRM IN ITS OFFER SERVE THE PUBLIC INTEREST, ARE SUFFICIENTLYREMEDIAL UNDER THE CIRCUMSTANCES, AND REPRESENT A PROPERDISCHARGE OF THE EXCHANGE'S REGULATORY RESPONSIBILITIESUNDER THE EXCHANGE ACT. THE COMMITTEE CONCURS IN THESANCTIONS CONSENTED TO BY THE FIRM, AND ORDERS THE IMPOSITIONOF THE FOLLOWING SANCTIONS: A CENSURE AND A FINE IN THE AMOUNTOF $35,000.

Regulator Statement ASSOCIATED FINRA CASE #20140438131/ENFORCEMENT NO. 2015-16


No


Decision


Initiated By: NASDAQ OMX PHLX LLC


Allegations: WHILE ACTING AS A DIRECTED REMOTE STREAMING QUOTE TRADER(DRSQT) UBS FAILED TO QUOTE CONTINUOUS, TWO SIDED MARKETS ONTHE NASDAQ OMX PHLX LLC IN VIOLATION OF EXCHANGE RULE1014(B)(II)(D)(1).










CENSURE






Resolution:


Sanction Details: CENSURE AND FINE OF $35,000


Decision


i


Allegations: THIS MATTER IS PART OF AN INVESTIGATION THAT INITIALLY FOCUSED ONTHE FIRM'S FAILURE ACROSS MULTIPLE DESKS WITHIN THE REVIEWPERIOD TO REASONABLY PREVENT THE ENTRY OF CERTAIN ERRONEOUSEQUITY OR OPTIONS ORDERS SENT TO NYSE ARCA EQUITIES, THE NEWYORK STOCK EXCHANGE LLC (NYSE), NYSE MKT LLC (NYSE MKT), THENASDAQ STOCK MARKET LLC (NASDAQ), NASDAQ OMX PHLX LLC (PHLX),BATS EXCHANGE, INC. (BZX), BATS Y-EXCHANGE, INC. (BYX), AND EDGXEXCHANGE, INC. (EDGX) (COLLECTIVELY THE EXCHANGES). FINRA'SDEPARTMENT OF MARKET REGULATION (THE STAFF), ON BEHALF OFNYSE ARCA EQUITIES, AS WELL AS VARIOUS OTHER SECURITIESEXCHANGES AND FINRA, CONDUCTED A REVIEW OF THE FIRM'SCOMPLIANCE WITH SEC RULE 15C3-5 AND NYSE ARCA EQUITIES RULES6.18 AND 2010 DURING THE REVIEW PERIOD BEGINNING ON JULY 14, 2011,AND CONTINUING THROUGH AT LEAST JULY 2015. AS A RESULT OF THEINVESTIGATION, THE STAFF DETERMINED THAT UBS FAILED TO HAVEFINANCIAL RISK MANAGEMENT CONTROLS REASONABLY DESIGNED TOPREVENT THE TRANSMISSION OF NUMEROUS ERRONEOUS EQUITY OROPTIONS ORDERS, AND ORDERS THAT EXCEEDED APPROPRIATE PRE-SETCREDIT THRESHOLDS IN THE AGGREGATE FOR ITS CUSTOMERS.ADDITIONALLY, UBS FAILED TO HAVE ADEQUATE SUPERVISORYPROCEDURES DESIGNED TO MANAGE THE FINANCIAL, REGULATORY, ANDOTHER RISKS OF MARKET ACCESS. SPECIFICALLY, DURING THE REVIEWPERIOD, UBS VIOLATED SEC RULE 15C3-5(C) AND NYSE ARCA EQUITIESRULES 6.18 AND 2010 WHEN IT FAILED TO ESTABLISH, MAINTAIN ANDENFORCE A SYSTEM OF RISK MANAGEMENT CONTROLS ANDSUPERVISORY PROCEDURES REASONABLY DESIGNED TO PREVENT THEENTRY OF ERRONEOUS EQUITY OR OPTIONS ORDERS, BY REJECTINGORDERS THAT EXCEEDED APPROPRIATE PRICE OR SIZE PARAMETERS,ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIOD OF TIME, ORTHAT INDICATED DUPLICATIVE ORDERS. FROM NOVEMBER 30, 2011,THROUGH MARCH 2015, UBS VIOLATED SEC RULE 15C3-5(C)(1)(I) ANDNYSE ARCA EQUITIES RULES 6.18 AND 2010 WHEN IT FAILED TOESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OF RISK MANAGEMENTCONTROLS AND SUPERVISORY PROCEDURES REASONABLY DESIGNEDTO PREVENT THE ENTRY OF ORDERS THAT EXCEEDED APPROPRIATEPRE-SET CREDIT THRESHOLDS IN THE AGGREGATE FOR ITS CUSTOMERS.FROM FEBRUARY 2014 TO JULY 2015, UBS VIOLATED SEC RULE 15C3-5(D)AND NYSE ARCA EQUITIES RULES 6.18 AND 2010 WHEN IT APPLIEDCONTROLS TO TWO SPONSORED ACCESS CLIENT FLOWS THAT WERENOT DEVELOPED INDEPENDENTLY OF SUCH CLIENTS. FINALLY, DURINGTHE REVIEW PERIOD, UBS VIOLATED SEC RULE 15C3-5(B) AND NYSE ARCAEQUITIES RULES 6.18 AND 2010 WHEN IT FAILED TO ESTABLISH, MAINTAINAND PRESERVE AN ADEQUATE WRITTEN DESCRIPTION OF ITS RISKMANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES INCONNECTION WITH EQUITY AND OPTION ERRONEOUS ORDERCONTROLS, AND PRE-SET CREDIT THRESHOLDS FOR EQUITIES ANDOPTIONS CLIENTELE.














THIS MATTER IS PART OF AN INVESTIGATION THAT INITIALLY FOCUSED ONTHE FIRM'S FAILURE ACROSS MULTIPLE DESKS WITHIN THE REVIEWPERIOD TO REASONABLY PREVENT THE ENTRY OF CERTAIN ERRONEOUSEQUITY OR OPTIONS ORDERS SENT TO NYSE ARCA EQUITIES, THE NEWYORK STOCK EXCHANGE LLC (NYSE), NYSE MKT LLC (NYSE MKT), THENASDAQ STOCK MARKET LLC (NASDAQ), NASDAQ OMX PHLX LLC (PHLX),BATS EXCHANGE, INC. (BZX), BATS Y-EXCHANGE, INC. (BYX), AND EDGXEXCHANGE, INC. (EDGX) (COLLECTIVELY THE EXCHANGES). FINRA'SDEPARTMENT OF MARKET REGULATION (THE STAFF), ON BEHALF OFNYSE ARCA EQUITIES, AS WELL AS VARIOUS OTHER SECURITIESEXCHANGES AND FINRA, CONDUCTED A REVIEW OF THE FIRM'SCOMPLIANCE WITH SEC RULE 15C3-5 AND NYSE ARCA EQUITIES RULES6.18 AND 2010 DURING THE REVIEW PERIOD BEGINNING ON JULY 14, 2011,AND CONTINUING THROUGH AT LEAST JULY 2015. AS A RESULT OF THEINVESTIGATION, THE STAFF DETERMINED THAT UBS FAILED TO HAVEFINANCIAL RISK MANAGEMENT CONTROLS REASONABLY DESIGNED TOPREVENT THE TRANSMISSION OF NUMEROUS ERRONEOUS EQUITY OROPTIONS ORDERS, AND ORDERS THAT EXCEEDED APPROPRIATE PRE-SETCREDIT THRESHOLDS IN THE AGGREGATE FOR ITS CUSTOMERS.ADDITIONALLY, UBS FAILED TO HAVE ADEQUATE SUPERVISORYPROCEDURES DESIGNED TO MANAGE THE FINANCIAL, REGULATORY, ANDOTHER RISKS OF MARKET ACCESS. SPECIFICALLY, DURING THE REVIEWPERIOD, UBS VIOLATED SEC RULE 15C3-5(C) AND NYSE ARCA EQUITIESRULES 6.18 AND 2010 WHEN IT FAILED TO ESTABLISH, MAINTAIN ANDENFORCE A SYSTEM OF RISK MANAGEMENT CONTROLS ANDSUPERVISORY PROCEDURES REASONABLY DESIGNED TO PREVENT THEENTRY OF ERRONEOUS EQUITY OR OPTIONS ORDERS, BY REJECTINGORDERS THAT EXCEEDED APPROPRIATE PRICE OR SIZE PARAMETERS,ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIOD OF TIME, ORTHAT INDICATED DUPLICATIVE ORDERS. FROM NOVEMBER 30, 2011,THROUGH MARCH 2015, UBS VIOLATED SEC RULE 15C3-5(C)(1)(I) ANDNYSE ARCA EQUITIES RULES 6.18 AND 2010 WHEN IT FAILED TOESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OF RISK MANAGEMENTCONTROLS AND SUPERVISORY PROCEDURES REASONABLY DESIGNEDTO PREVENT THE ENTRY OF ORDERS THAT EXCEEDED APPROPRIATEPRE-SET CREDIT THRESHOLDS IN THE AGGREGATE FOR ITS CUSTOMERS.FROM FEBRUARY 2014 TO JULY 2015, UBS VIOLATED SEC RULE 15C3-5(D)AND NYSE ARCA EQUITIES RULES 6.18 AND 2010 WHEN IT APPLIEDCONTROLS TO TWO SPONSORED ACCESS CLIENT FLOWS THAT WERENOT DEVELOPED INDEPENDENTLY OF SUCH CLIENTS. FINALLY, DURINGTHE REVIEW PERIOD, UBS VIOLATED SEC RULE 15C3-5(B) AND NYSE ARCAEQUITIES RULES 6.18 AND 2010 WHEN IT FAILED TO ESTABLISH, MAINTAINAND PRESERVE AN ADEQUATE WRITTEN DESCRIPTION OF ITS RISKMANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES INCONNECTION WITH EQUITY AND OPTION ERRONEOUS ORDERCONTROLS, AND PRE-SET CREDIT THRESHOLDS FOR EQUITIES ANDOPTIONS CLIENTELE.


Resolution:


No

Decision







Sanction Details: A HEARING OFFICER AT FINRA CONSIDERED AN OFFER OF SETTLEMENTAND CONSENT ENTERED INTO BETWEEN FINRA'S DEPARTMENT OFMARKET REGULATION ON BEHALF OF NYSE REGULATION, INC. AND UBSSECURITIES LLC. THE OFFER OF SETTLEMENT AND CONSENT WASSUBMITTED FOR THE SOLE PURPOSE OF SETTLING THIS DISCIPLINARYPROCEEDING, WITHOUT ADJUDICATION OF ANY ISSUES OF LAW OR FACT,AND WITHOUT ADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGSREFERRED TO THEREIN. THE HEARING OFFICER ACCEPTS THE OFFER OFSETTLEMENT AND CONSENT AND ISSUES THIS DECISION IN ACCORDANCEWITH NYSE ARCA EQUITIES RULES. UBS IS CENSURED AND FINED$162,500. UBS IS ALSO ORDERED TO ADDRESS THE MARKET ACCESSRULE DEFICIENCIES DESCRIBED IN THIS DECISION TO ENSURE THAT UBSHAS IMPLEMENTED PROCEDURES THAT ARE REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH THE RULES AND REGULATIONS CITEDHEREIN. UNDER THE OFFER OF SETTLEMENT AND CONSENT, UBSAGREED TO PAY A TOTAL FINE OF $1,250.000, OF WHICH $162,500 SHALLBE PAID TO NYSE ARCA. INC. AND THE REMAINING AMOUNT SHALL BE PAIDTO (I) NYSE MKT LLC OPTIONS MARKET; (II) NYSE MKT LLC EQUITIESMARKET; (III) THE NASDAQ STOCK MARKET LLC; (IV) NASDAQ OMX PHLXLLC; (V) BATS EXCHANGE, INC.; (VI) BATS Y-EXCHANGE, INC.; (VII) EDGXEXCHANGE, INC ; (VIII) FINRA; AND (IX) THE NEW YORK STOCK EXCHANGEIN ACCORDANCE WITH THE TERMS OF PARALLEL SETTLEMENTAGREEMENTS IN RELATED MATTERS BETWEEN UBS AND EACH OF THESESELF-REGULATORY ORGANIZATIONS.

Regulator Statement IN DETERMINING TO RESOLVE THIS MATTER IN THE MANNER SET FORTHIN THE OFFER OF SETTLEMENT AND CONSENT, MARKET REGULATIONCONSIDERED THAT UBS ON ITS OWN ACCORD ENGAGED AN OUTSIDECONSULTANT TO REVIEW AND MAKE RECOMMENDATIONS TO ENHANCECONTROLS AND PROCEDURES WITH RESPECT TO CERTAIN ASPECTS OFITS MARKET ACCESS CONTROLS AND RELATED SUPERVISORYPROCEDURES FOR COMPLIANCE WITH SEC RULE 15C3-5.


No












CENSUREUNDERTAKING





Allegations: FINRA'S DEPARTMENT OF MARKET REGULATION (THE STAFF), ON BEHALFOF NYSE ARCA EQUITIES, AS WELL AS VARIOUS OTHER SECURITIESEXCHANGES AND FINRA, CONDUCTED A REVIEW OF THE FIRM'SCOMPLIANCE WITH SEC RULE 15C3-5 AND NYSE ARCA EQUITIES RULES6.18 AND 2010 DURING THE REVIEW PERIOD BEGINNING ON JULY 14, 2011,AND CONTINUING THROUGH AT LEAST JULY 2015. AS A RESULT OF THEINVESTIGATION, THE STAFF DETERMINED THAT UBS FAILED TO HAVEFINANCIAL RISK MANAGEMENT CONTROLS REASONABLY DESIGNED TOPREVENT THE TRANSMISSION OF NUMEROUS ERRONEOUS EQUITY OROPTIONS ORDERS, AND ORDERS THAT EXCEEDED APPROPRIATE PRE-SETCREDIT THRESHOLDS IN THE AGGREGATE FOR ITS CUSTOMERS.ADDITIONALLY, UBS FAILED TO HAVE ADEQUATE SUPERVISORYPROCEDURES DESIGNED TO MANAGE THE FINANCIAL, REGULATORY, ANDOTHER RISKS OF MARKET ACCESS. SPECIFICALLY, DURING THE REVIEWPERIOD, UBS VIOLATED SEC RULE 15C3-5(C) AND NYSE ARCA EQUITIESRULES 6.18 AND 2010 WHEN IT FAILED TO ESTABLISH, MAINTAIN ANDENFORCE A SYSTEM OF RISK MANAGEMENT CONTROLS ANDSUPERVISORY PROCEDURES REASONABLY DESIGNED TO PREVENT THEENTRY OF ERRONEOUS EQUITY OR OPTIONS ORDERS, BY REJECTINGORDERS THAT EXCEEDED APPROPRIATE PRICE OR SIZE PARAMETERS,ON AN ORDER-BY-ORDER BASIS OR OVER A SHORT PERIOD OF TIME, ORTHAT INDICATED DUPLICATIVE ORDERS.



Resolution:


Sanction Details: UNDER THE OFFER OF SETTLEMENT AND CONSENT, UBS AGREED TO PAYA TOTAL FINE OF $1,250.000, OF WHICH $162,500 SHALL BE PAID TO NYSEARCA. INC. AND THE REMAINING AMOUNT SHALL BE PAID TO (I) NYSE MKTLLC OPTIONS MARKET; (II) NYSE MKT LLC EQUITIES MARKET; (III) THENASDAQ STOCK MARKET LLC; (IV) NASDAQ OMX PHLX LLC; (V) BATSEXCHANGE, INC.; (VI) BATS Y-EXCHANGE, INC.; (VII) EDGX EXCHANGE,INC ; (VIII) FINRA; AND (IX) THE NEW YORK STOCK EXCHANGE INACCORDANCE WITH THE TERMS OF PARALLEL SETTLEMENTAGREEMENTS IN RELATED MATTERS.ADDITIONALLY, UBS SECURITIES LLC CONSENTED TO A CENSURE, ANDAN UNDERTAKING.


Decision






Sanction Details: UNDER THE OFFER OF SETTLEMENT AND CONSENT, UBS AGREED TO PAYA TOTAL FINE OF $1,250.000, OF WHICH $162,500 SHALL BE PAID TO NYSEARCA. INC. AND THE REMAINING AMOUNT SHALL BE PAID TO (I) NYSE MKTLLC OPTIONS MARKET; (II) NYSE MKT LLC EQUITIES MARKET; (III) THENASDAQ STOCK MARKET LLC; (IV) NASDAQ OMX PHLX LLC; (V) BATSEXCHANGE, INC.; (VI) BATS Y-EXCHANGE, INC.; (VII) EDGX EXCHANGE,INC ; (VIII) FINRA; AND (IX) THE NEW YORK STOCK EXCHANGE INACCORDANCE WITH THE TERMS OF PARALLEL SETTLEMENTAGREEMENTS IN RELATED MATTERS.ADDITIONALLY, UBS SECURITIES LLC CONSENTED TO A CENSURE, ANDAN UNDERTAKING.


i


Initiated By: FINRA





Principal Product Type: Equity - OTC


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TODISPLAY IMMEDIATELY A BID OR OFFER THAT REFLECTED THE PRICE ANDTHE FULL SIZE OF CUSTOMER LIMIT ORDERS FOR OVER-THE-COUNTER(OTC) EQUITY SECURITIES HELD BY THE FIRM THAT WERE AT A PRICETHAT WOULD HAVE IMPROVED THE BID OR OFFER OF THE FIRM IN SUCHSECURITIES.



Resolution:


No










FINE PAID IN FULL ON NOVEMBER 25, 2015.


No



Initiated By: FINRA




CENSURE





Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TODISPLAY IMMEDIATELY A BID OR OFFER THAT REFLECTED THE PRICE ANDTHE FULL SIZE OF CUSTOMER LIMIT ORDERS FOR OVER THE-COUNTER(OTC)EQUITY SECURITIES HELD BY THE FIRM THAT WERE AT A PRICE THATWOULD HAVE IMPROVED THE BID OR OFFER OF THE FIRM IN SUCHSECURITIES.



Resolution:













i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOPROPERLY RETAIN AND REVIEW ATTACHMENTS TO CERTAIN WRITTENELECTRONIC COMMUNICATIONS SENT TO OR RECEIVED BY FIRMEMPLOYEES. THE FIRM'S EMPLOYEES, IN ADDITION TO USING FIRM'SEMAIL SYSTEMS, ALSO USED BLOOMBERG L.P, (BLOOMBERG)ELECTRONIC MAIL AND INSTANT MESSAGES (COLLECTIVELY, BLOOMBERGMESSAGES) SERVICE TO COMMUNICATE INTERNALLY AND EXTERNALLY.EACH DAY, BLOOMBERG PROVIDED THE FIRM WITH COPIES OF ALL OF ITSBLOOMBERG MESSAGES AND THEIR ATTACHMENTS SO THAT THE FIRMCOULD INGEST THEM INTO ITS EMAIL REVIEW SYSTEM AND RETAIN THEM.BLOOMBERG POSTED TO A FILE-TRANSFER PROTOCOL (FTP) SITE ONEFILE CONTAINING ALL OF THE BLOOMBERG MESSAGES AND ANOTHERFILE CONTAINING ALL OF THEIR ATTACHMENTS. THE FIRM THENDOWNLOADED THOSE TWO FILES INTO ITS OWN SYSTEM FOR RETENTIONAND SUPERVISION. HOWEVER, WITHOUT INFORMING THE FIRM,BLOOMBERG CHANGED THE WAY IT POSTED ELECTRONIC FILES TO THEFTP SITE. BECAUSE THE FIRM WAS NOT NOTIFIED OF THE CHANGE, ONDAYS WHEN BLOOMBERG POSTED MULTIPLE ATTACHMENT FILES, THEFIRM'S SYSTEM DOWNLOADED ONLY ONE OF THE FILES FROM THE FTPSITE FOR RETENTION AND SUPERVISION AND DID NOT DOWNLOAD ANYADDITIONAL FILES CONTAINING ATTACHMENTS. BECAUSE THE FIRM DIDNOT DOWNLOAD THE ADDITIONAL FILES, IT WAS NOT ABLE TO REVIEWTHE ATTACHMENTS CONTAINED IN THOSE FILES. THE FIRM'S SYSTEM DIDNOT DETECT ANY ERROR BECAUSE IT WAS PROGRAMMED TO DOWNLOADONE ATTACHMENT FILE. FOR OVER TWO YEARS, THE FIRM'S EMPLOYEESSENT AND RECEIVED APPROXIMATELY 13 MILLION BLOOMBERGMESSAGES WITH ATTACHMENTS; ABOUT 8 MILLION SUCH MESSAGES HADATTACHMENTS THAT WERE NOT INGESTED INTO THE FIRM'S ARCHIVE ANDTHEREFORE NOT AVAILABLE FOR SUPERVISORY REVIEW. NONE OF THEATTACHMENTS WAS DELETED OR LOST. THE FIRM DISCOVERED THEPROBLEM THEREAFTER, AND CORRECTED IT WITHIN A MONTH. THEFINDINGS STATED THAT FOR SEVERAL YEARS, THE FIRM SENT TENS OFMILLIONS OF EMAIL MESSAGES FROM ITS SHARED MAILBOXES BUTFAILED TO MAINTAIN A RECORD OF THE INDIVIDUAL EMPLOYEES ORAPPLICATION THAT SENT THE "SENT AS" EMAIL MESSAGES. BECAUSETHERE WAS NO RECORD AS TO WHO SENT THE EMAIL MESSAGES,ALTHOUGH THE MESSAGES WERE ARCHIVED, THE MESSAGES WERE NOTINCLUDED IN THE FIRM'S SUPERVISORY REVIEW OF EMPLOYEE EMAILS.THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO ESTABLISH,MAINTAIN, AND ENFORCE A SUPERVISORY SYSTEM AND/OR WRITTENSUPERVISORY PROCEDURES THAT WERE REASONABLY DESIGNED TOACHIEVE THE FIRM'S COMPLIANCE WITH APPLICABLE RULES REGARDINGTHE REVIEW AND STORAGE OF ELECTRONIC COMMUNICATIONS.







Initiated By: FINRA







WITHOUT ADMITTING OR DENYING THE FINDINGS THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOPROPERLY RETAIN AND REVIEW ATTACHMENTS TO CERTAIN WRITTENELECTRONIC COMMUNICATIONS SENT TO OR RECEIVED BY FIRMEMPLOYEES. THE FIRM'S EMPLOYEES, IN ADDITION TO USING FIRM'SEMAIL SYSTEMS, ALSO USED BLOOMBERG L.P, (BLOOMBERG)ELECTRONIC MAIL AND INSTANT MESSAGES (COLLECTIVELY, BLOOMBERGMESSAGES) SERVICE TO COMMUNICATE INTERNALLY AND EXTERNALLY.EACH DAY, BLOOMBERG PROVIDED THE FIRM WITH COPIES OF ALL OF ITSBLOOMBERG MESSAGES AND THEIR ATTACHMENTS SO THAT THE FIRMCOULD INGEST THEM INTO ITS EMAIL REVIEW SYSTEM AND RETAIN THEM.BLOOMBERG POSTED TO A FILE-TRANSFER PROTOCOL (FTP) SITE ONEFILE CONTAINING ALL OF THE BLOOMBERG MESSAGES AND ANOTHERFILE CONTAINING ALL OF THEIR ATTACHMENTS. THE FIRM THENDOWNLOADED THOSE TWO FILES INTO ITS OWN SYSTEM FOR RETENTIONAND SUPERVISION. HOWEVER, WITHOUT INFORMING THE FIRM,BLOOMBERG CHANGED THE WAY IT POSTED ELECTRONIC FILES TO THEFTP SITE. BECAUSE THE FIRM WAS NOT NOTIFIED OF THE CHANGE, ONDAYS WHEN BLOOMBERG POSTED MULTIPLE ATTACHMENT FILES, THEFIRM'S SYSTEM DOWNLOADED ONLY ONE OF THE FILES FROM THE FTPSITE FOR RETENTION AND SUPERVISION AND DID NOT DOWNLOAD ANYADDITIONAL FILES CONTAINING ATTACHMENTS. BECAUSE THE FIRM DIDNOT DOWNLOAD THE ADDITIONAL FILES, IT WAS NOT ABLE TO REVIEWTHE ATTACHMENTS CONTAINED IN THOSE FILES. THE FIRM'S SYSTEM DIDNOT DETECT ANY ERROR BECAUSE IT WAS PROGRAMMED TO DOWNLOADONE ATTACHMENT FILE. FOR OVER TWO YEARS, THE FIRM'S EMPLOYEESSENT AND RECEIVED APPROXIMATELY 13 MILLION BLOOMBERGMESSAGES WITH ATTACHMENTS; ABOUT 8 MILLION SUCH MESSAGES HADATTACHMENTS THAT WERE NOT INGESTED INTO THE FIRM'S ARCHIVE ANDTHEREFORE NOT AVAILABLE FOR SUPERVISORY REVIEW. NONE OF THEATTACHMENTS WAS DELETED OR LOST. THE FIRM DISCOVERED THEPROBLEM THEREAFTER, AND CORRECTED IT WITHIN A MONTH. THEFINDINGS STATED THAT FOR SEVERAL YEARS, THE FIRM SENT TENS OFMILLIONS OF EMAIL MESSAGES FROM ITS SHARED MAILBOXES BUTFAILED TO MAINTAIN A RECORD OF THE INDIVIDUAL EMPLOYEES ORAPPLICATION THAT SENT THE "SENT AS" EMAIL MESSAGES. BECAUSETHERE WAS NO RECORD AS TO WHO SENT THE EMAIL MESSAGES,ALTHOUGH THE MESSAGES WERE ARCHIVED, THE MESSAGES WERE NOTINCLUDED IN THE FIRM'S SUPERVISORY REVIEW OF EMPLOYEE EMAILS.THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO ESTABLISH,MAINTAIN, AND ENFORCE A SUPERVISORY SYSTEM AND/OR WRITTENSUPERVISORY PROCEDURES THAT WERE REASONABLY DESIGNED TOACHIEVE THE FIRM'S COMPLIANCE WITH APPLICABLE RULES REGARDINGTHE REVIEW AND STORAGE OF ELECTRONIC COMMUNICATIONS.


Resolution:


Sanction Details: UBS SECURITIES LLC WAS CENSURED, FINED $300,000 AND ORDERED TOCERTIFY TO FINRA THAT IT HAS REMEDIATED THE "SENT AS" (SHAREDMAILBOX) PROBLEM WITHIN 180 DAYS. FINE PAID IN FULL ON SEPTEMBER30, 2015.


No




Allegations: SINCE BEFORE 2008, BLOOMBERG PROVIDED UBS WITH COPIES OF ALLOF ITS BLOOMBERG MESSAGES AND THEIR ATTACHMENTS BY POSTINGTHEM TO A FILE-TRANSFER PROTOCOL SITE. IN OR AROUND EARLY 2008,WITHOUT INFORMING UBS, BLOOMBERG CHANGED THE WAY IT POSTEDELECTRONIC FILES TO THE FTP SITE. BECAUSE UBS WAS NOT NOTIFIEDOF THE CHANGE, ON DAYS WHEN BLOOMBERG POSTED MULTIPLEATTACHMENT FILES, UBS'S SYSTEM DOWNLOADED ONLY ONE OF THEFILES FROM THE FTP SITE FOR RETENTION AND SUPERVISION AND DIDNOT DOWNLOAD ANY ADDITIONAL FILES CONTAINING ATTACHMENTS. THEISSUE AFFECTED ONLY ATTACHMENTS, NOT THE MESSAGESTHEMSELVES, AND NONE OF THE ATTACHMENTS WAS DELETED OR LOST.UBS DISCOVERED THIS ISSUE IN OCTOBER 2011 AND CORRECTED IT INNOVEMBER 2011. UBS SELF-REPORTED THIS MATTER TO FINRA INDECEMBER 2011.

UBS USED "SHARED" ELECTRONIC MAILBOXES THAT ALLOWED MULTIPLEUSERS TO SEND EMAIL MESSAGES FROM A COMMON MAILBOX. MANY OFTHESE EMAIL MESSAGES INDICATED THAT THEY WERE SENT BY THESHARED MAILBOX ("SENT AS" EMAILS) RATHER THAN BY A PARTICULARUBS EMPLOYEE. FROM AT LEAST 2004 THROUGH DECEMBER 2013, UBSDID NOT MAINTAIN A RECORD OF THE INDIVIDUAL EMPLOYEES ORAPPLICATION THAT SENT THE "SENT AS" EMAIL MESSAGES. ALTHOUGHTHE MESSAGES WERE ARCHIVED, THEY WERE NOT INCLUDED IN UBS'SSUPERVISORY REVIEW OF EMPLOYEE EMAILS. UBS SELF-REPORTEDTHIS ISSUE TO FINRA IN JANUARY 2014.

BASED UPON THE FOREGOING, FINRA ALLEGED THAT UBS VIOLATEDSECTION 17(A) OF THE SECURITIES EXCHANGE ACT, RULE 17A-4THEREUNDER, NASD RULES 3110, 3010, AND 2110; AND F1NRA RULE 2010.








Initiated By: FINRA




CENSURE





Allegations: SINCE BEFORE 2008, BLOOMBERG PROVIDED UBS WITH COPIES OF ALLOF ITS BLOOMBERG MESSAGES AND THEIR ATTACHMENTS BY POSTINGTHEM TO A FILE-TRANSFER PROTOCOL SITE. IN OR AROUND EARLY 2008,WITHOUT INFORMING UBS, BLOOMBERG CHANGED THE WAY IT POSTEDELECTRONIC FILES TO THE FTP SITE. BECAUSE UBS WAS NOT NOTIFIEDOF THE CHANGE, ON DAYS WHEN BLOOMBERG POSTED MULTIPLEATTACHMENT FILES, UBS'S SYSTEM DOWNLOADED ONLY ONE OF THEFILES FROM THE FTP SITE FOR RETENTION AND SUPERVISION AND DIDNOT DOWNLOAD ANY ADDITIONAL FILES CONTAINING ATTACHMENTS. THEISSUE AFFECTED ONLY ATTACHMENTS, NOT THE MESSAGESTHEMSELVES, AND NONE OF THE ATTACHMENTS WAS DELETED OR LOST.UBS DISCOVERED THIS ISSUE IN OCTOBER 2011 AND CORRECTED IT INNOVEMBER 2011. UBS SELF-REPORTED THIS MATTER TO FINRA INDECEMBER 2011.

UBS USED "SHARED" ELECTRONIC MAILBOXES THAT ALLOWED MULTIPLEUSERS TO SEND EMAIL MESSAGES FROM A COMMON MAILBOX. MANY OFTHESE EMAIL MESSAGES INDICATED THAT THEY WERE SENT BY THESHARED MAILBOX ("SENT AS" EMAILS) RATHER THAN BY A PARTICULARUBS EMPLOYEE. FROM AT LEAST 2004 THROUGH DECEMBER 2013, UBSDID NOT MAINTAIN A RECORD OF THE INDIVIDUAL EMPLOYEES ORAPPLICATION THAT SENT THE "SENT AS" EMAIL MESSAGES. ALTHOUGHTHE MESSAGES WERE ARCHIVED, THEY WERE NOT INCLUDED IN UBS'SSUPERVISORY REVIEW OF EMPLOYEE EMAILS. UBS SELF-REPORTEDTHIS ISSUE TO FINRA IN JANUARY 2014.

BASED UPON THE FOREGOING, FINRA ALLEGED THAT UBS VIOLATEDSECTION 17(A) OF THE SECURITIES EXCHANGE ACT, RULE 17A-4THEREUNDER, NASD RULES 3110, 3010, AND 2110; AND F1NRA RULE 2010.


Resolution:










Sanction Details: UBS SECURITIES WAS CENSURED AND FINED $300,000.00.



i








Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT DESPITEHAVING PREVIOUSLY BEEN PUT ON NOTICE OF THE LARGE OPTIONSPOSITIONS REPORT (LOPR)-RELATED DEFICIENCIES, THE FIRMSUBMITTED INACCURATE REPORTS TO THE LOPR, IN THAT THE FIRMENTERED INCORRECT DATA IN THE "EFFECTIVE DATE" FIELD DUE TOERRORS INVOLVING THE FIRM'S THIRD PARTY VENDOR'S PROCESSING OFCERTAIN TRADES. THE FINDINGS STATED THAT THE FIRM SUBMITTEDREPORTS TO THE OPTIONS CLEARING CORPORATION (OCC) LOPR WITHTRUNCATED ACCOUNT NAMES IN THE "ACCOUNT NAME" FIELD, WHICHRESULTED IN ITS FAILURE TO PROVIDE THE IDENTITY OF THE FULL LEGALACCOUNT NAME OF THE HOLDER OF THE OPTIONS POSITION IN SUCHINSTANCES; THESE PARTICULAR ACCOUNT NAME ERRORS IMPACTEDREGULATORY SURVEILLANCE. THE FIRM, HOWEVER, HAD INCLUDED THENECESSARY CUSTOMER INFORMATION IN THE OTHER LOPR FIELDS,WHICH PROVIDED ADDITIONAL MEANS TO DETERMINE THE IDENTITY OFACCOUNT HOLDERS. THE FINDINGS ALSO STATED THAT THE FIRM FAILEDTO MAINTAIN AN ADEQUATE SYSTEM OF SUPERVISION, INCLUDINGSYSTEMS OF FOLLOW-UP AND REVIEW, WHICH WERE REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH THE NASDAQ OPTIONSMARKET LLC (NOM) RULES GOVERNING THE REPORTING OF OPTIONSPOSITIONS TO THE LOPR SYSTEM. THE FIRM ALSO LACKED SUFFICIENTWRITTEN SUPERVISORY PROCEDURES (WSPS) REQUIRING REVIEWS TODETERMINE THAT LOPR POSITIONS WERE ACCURATE, INCLUDINGREPORTING ACCOUNTS AS ACTING IN CONCERT.










Resolution:

Other Sanctions Ordered: UNDERTAKING: REVISE THE FIRM'S WSPS.

Sanction Details: THE FIRM WAS CENSURED, FINED $350,000 AND UNDERTAKES TO REVISEITS WSPS.


No




Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT DESPITEHAVING PREVIOUSLY BEEN PUT ON NOTICE OF THELARGE OPTIONS POSITIONS REPORT (LOPR)-RELATED DEFICIENCIES, THEFIRM SUBMITTED INACCURATE REPORTS TO THE LOPR, IN THAT THE FIRMENTERED INCORRECT DATA IN THE "EFFECTIVE DATE" FIELD DUE TOERRORS INVOLVING THE FIRM'S THIRD PARTY VENDOR'S PROCESSING OFCERTAIN TRADES. THE FINDINGS STATED THAT THE FIRM SUBMITTEDREPORTS TO THE OPTIONS CLEARING CORPORATION (OCC) LOPR WITHTRUNCATED ACCOUNT NAMES IN THE"ACCOUNT NAME" FIELD, WHICH RESULTED IN ITS FAILURE TO PROVIDETHE IDENTITY OF THE FULL LEGAL ACCOUNT NAME OF THE HOLDER OFTHE OPTIONS POSITION IN SUCH INSTANCES; THESEPARTICULAR ACCOUNT NAME ERRORS IMPACTED REGULATORYSURVEILLANCE. THE FIRM, HOWEVER, HAD INCLUDED THE NECESSARYCUSTOMER INFORMATION IN THE OTHER LOPR FIELDS, WHICH PROVIDEDADDITIONAL MEANS TO DETERMINE THE IDENTITY OF ACCOUNTHOLDERS. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TOMAINTAIN AN ADEQUATE SYSTEM OF SUPERVISION, INCLUDING SYSTEMSOF FOLLOW-UP AND REVIEW, WHICH WERE REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH THE NASDAQ OPTIONS MARKET LLC (NOM)RULES GOVERNING THE REPORTING OF OPTIONS POSITIONS TO THELOPR SYSTEM. THE FIRM ALSOLACKED SUFFICIENT WRITTEN SUPERVISORY PROCEDURES (WSPS)REQUIRING REVIEWS TO DETERMINE THAT LOPR POSITIONS WEREACCURATE, INCLUDING REPORTING ACCOUNTS AS ACTING IN CONCERT.











CENSURE





WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT DESPITEHAVING PREVIOUSLY BEEN PUT ON NOTICE OF THELARGE OPTIONS POSITIONS REPORT (LOPR)-RELATED DEFICIENCIES, THEFIRM SUBMITTED INACCURATE REPORTS TO THE LOPR, IN THAT THE FIRMENTERED INCORRECT DATA IN THE "EFFECTIVE DATE" FIELD DUE TOERRORS INVOLVING THE FIRM'S THIRD PARTY VENDOR'S PROCESSING OFCERTAIN TRADES. THE FINDINGS STATED THAT THE FIRM SUBMITTEDREPORTS TO THE OPTIONS CLEARING CORPORATION (OCC) LOPR WITHTRUNCATED ACCOUNT NAMES IN THE"ACCOUNT NAME" FIELD, WHICH RESULTED IN ITS FAILURE TO PROVIDETHE IDENTITY OF THE FULL LEGAL ACCOUNT NAME OF THE HOLDER OFTHE OPTIONS POSITION IN SUCH INSTANCES; THESEPARTICULAR ACCOUNT NAME ERRORS IMPACTED REGULATORYSURVEILLANCE. THE FIRM, HOWEVER, HAD INCLUDED THE NECESSARYCUSTOMER INFORMATION IN THE OTHER LOPR FIELDS, WHICH PROVIDEDADDITIONAL MEANS TO DETERMINE THE IDENTITY OF ACCOUNTHOLDERS. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TOMAINTAIN AN ADEQUATE SYSTEM OF SUPERVISION, INCLUDING SYSTEMSOF FOLLOW-UP AND REVIEW, WHICH WERE REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH THE NASDAQ OPTIONS MARKET LLC (NOM)RULES GOVERNING THE REPORTING OF OPTIONS POSITIONS TO THELOPR SYSTEM. THE FIRM ALSOLACKED SUFFICIENT WRITTEN SUPERVISORY PROCEDURES (WSPS)REQUIRING REVIEWS TO DETERMINE THAT LOPR POSITIONS WEREACCURATE, INCLUDING REPORTING ACCOUNTS AS ACTING IN CONCERT.


Resolution:

Other Sanctions Ordered: UNDERTAKING: REVISE THE FIRM'S WSPS.





i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITTRANSMITTED ORDER AUDIT TRAIL SYSTEM (OATS) REPORTSCONCERNING ORDERS THAT CONTAINED INACCURATE, INCOMPLETE, ORIMPROPERLY FORMATTED DATA. THE FINDINGS STATED THAT FOR ONEMONTH THE FIRM MADE AVAILABLE A REPORT ON THE COVERED ORDERSIN NATIONAL MARKET SYSTEM SECURITIES THAT IT RECEIVED FOREXECUTION FROM ANY PERSON. THIS REPORT INCLUDED INCORRECTINFORMATION FOR MULTIPLE DATA CATEGORIES CONCERNING CERTAINSECURITIES IN AT LEAST FIVE CLASSIFICATION AREAS PERTAINING TOMARKET ORDERS. THE FINDINGS ALSO STATED THAT THE FIRMMISCLASSIFIED TWO ORDERS ON ONE DAY FOR PURPOSES OFREPORTING COVERED ORDERS IN NATIONAL MARKET SYSTEMSECURITIES THAT IT RECEIVED FOR EXECUTION. THE FINDINGS ALSOINCLUDED THAT THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDEFOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCEWITH RESPECT TO CERTAIN APPLICABLE SECURITIES LAWS ANDREGULATIONS AND THE RULES OF FINRA. THE FIRM'S WRITTENSUPERVISORY PROCEDURES (WSPS) FAILED TO PROVIDE FOR THEMINIMUM REQUIREMENTS FOR ADEQUATE WSPS, CONCERNING RULE 605OF REGULATION NMS.







Initiated By: FINRA







WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITTRANSMITTED ORDER AUDIT TRAIL SYSTEM (OATS) REPORTSCONCERNING ORDERS THAT CONTAINED INACCURATE, INCOMPLETE, ORIMPROPERLY FORMATTED DATA. THE FINDINGS STATED THAT FOR ONEMONTH THE FIRM MADE AVAILABLE A REPORT ON THE COVERED ORDERSIN NATIONAL MARKET SYSTEM SECURITIES THAT IT RECEIVED FOREXECUTION FROM ANY PERSON. THIS REPORT INCLUDED INCORRECTINFORMATION FOR MULTIPLE DATA CATEGORIES CONCERNING CERTAINSECURITIES IN AT LEAST FIVE CLASSIFICATION AREAS PERTAINING TOMARKET ORDERS. THE FINDINGS ALSO STATED THAT THE FIRMMISCLASSIFIED TWO ORDERS ON ONE DAY FOR PURPOSES OFREPORTING COVERED ORDERS IN NATIONAL MARKET SYSTEMSECURITIES THAT IT RECEIVED FOR EXECUTION. THE FINDINGS ALSOINCLUDED THAT THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDEFOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCEWITH RESPECT TO CERTAIN APPLICABLE SECURITIES LAWS ANDREGULATIONS AND THE RULES OF FINRA. THE FIRM'S WRITTENSUPERVISORY PROCEDURES (WSPS) FAILED TO PROVIDE FOR THEMINIMUM REQUIREMENTS FOR ADEQUATE WSPS, CONCERNING RULE 605OF REGULATION NMS.


Resolution:


Sanction Details: THE FIRM WAS CENSURED, FINED $67,500, AND UNDERTAKES TO PROVIDEREPORTS, WRITTEN AND ORAL, TO FINRA CONCERNING THEIMPLEMENTATION AND EFFECTIVENESS OF THE FIRM'S SYSTEMS,POLICIES, AND PROCEDURES TO ADDRESS THE SUPERVISIONDEFICIENCIES DETAILED IN THE AWC.

FINE PAID IN FULL ON AUGUST 5, 2015.


No









THE FIRM WAS CENSURED, FINED $67,500, AND UNDERTAKES TO PROVIDEREPORTS, WRITTEN AND ORAL, TO FINRA CONCERNING THEIMPLEMENTATION AND EFFECTIVENESS OF THE FIRM'S SYSTEMS,POLICIES, AND PROCEDURES TO ADDRESS THE SUPERVISIONDEFICIENCIES DETAILED IN THE AWC.



Initiated By: FINRA




CENSURE





Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITTRANSMITTED ORDER AUDIT TRAIL SYSTEM (OATS) REPORTSCONCERNING ORDERS THAT CONTAINED INACCURATE, INCOMPLETE, ORIMPROPERLY FORMATTED DATA. THE FINDINGS STATED THAT FOR ONEMONTH THE FIRM MADE AVAILABLE A REPORT ON THE COVERED ORDERSIN NATIONAL MARKET SYSTEM SECURITIES THAT IT RECEIVED FOREXECUTION FROM ANY PERSON. THIS REPORT INCLUDED INCORRECTINFORMATION FOR MULTIPLE DATACATEGORIES CONCERNING CERTAIN SECURITIES IN AT LEAST FIVECLASSIFICATION AREAS PERTAINING TO MARKET ORDERS. THE FINDINGSALSO STATED THAT THE FIRM MISCLASSIFIED TWO ORDERS ON ONE DAYFOR PURPOSES OF REPORTING COVERED ORDERS IN NATIONAL MARKETSYSTEM SECURITIES THAT IT RECEIVED FOR EXECUTION. THE FINDINGSALSO INCLUDED THAT THE FIRM'S SUPERVISORY SYSTEM DID NOTPROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH RESPECT TO CERTAIN APPLICABLE SECURITIES LAWSAND REGULATIONS AND THE RULES OF FINRA. THE FIRM'S WRITTENSUPERVISORY PROCEDURES (WSPS) FAILED TO PROVIDE FOR THEMINIMUM REQUIREMENTS FOR ADEQUATE WSPS, CONCERNING RULE 605OF REGULATION NMS.



Resolution:










Sanction Details: THE FIRM WAS CENSURED, FINED $67,500, AND UNDERTAKES TO PROVIDEREPORTS, WRITTEN AND ORAL, TO FINRA CONCERNING THEIMPLEMENTATION AND EFFECTIVENESS OF THE FIRM'S SYSTEMS,POLICIES, AND PROCEDURES TO ADDRESS THE SUPERVISIONDEFICIENCIES DETAILED IN THE AWC.



i


Initiated By: CHICAGO BOARD OF TRADE





Docket/Case Number: CBOT 12-9036-BC



Allegations: PURSUANT TO AN OFFER OF SETTLEMENT IN WHICH THE FIRM NEITHERADMITTED NOR DENIED THE RULE VIOLATIONS UPON WHICH THEPENALTY IS BASED, THE EXCHANGE PANEL FOUND THE FIRM VIOLATEDCBOT RULE 538.A. IT WAS ALLEGED THAT ON AUGUST 3, 2012, THE FIRMENTERED INTO THREE EFRP TRANSACTIONS THAT DID NOT CONTAINDOCUMENTATION OF THE CORRESPONDING CASH POSITIONS AND, THUS,WERE NOT BONA FIDE EFRP TRANSACTIONS.



Resolution:


Sanction Details: FINE $35,000.00


Settled


i















Allegations: PURSUANT TO AN OFFER OF SETTLEMENT IN WHICH THE FIRM NEITHERADMITTED NOR DENIED THE RULE VIOLATIONS UPON WHICH THEPENALTY IS BASED, THE EXCHANGE PANEL FOUND THE FIRM VIOLATEDCBOT RULE 538.A. (LEGACY). IT WAS ALLEGED THAT ON APRIL 3, 2014,THE FIRM EXECUTED AN EFRP TRANSACTION FOR A CUSTOMER AND THEFIRM FAILED TO IDENTIFY THE EFRP TRANSACTION ON THE MONTHLYACCOUNT STATEMENT DELIVERED TO THE CUSTOMER.



Resolution:




Settled


i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT AS MANAGINGUNDERWRITER, FAILED TO REPORT NEW ISSUE OFFERINGS IN TRADEREPORTING AND COMPLIANCE ENGINE (TRACE)-ELIGIBLE CORPORATEDEBT SECURITIES TO FINRA ACCORDING TO THE TIME FRAMES SETFORTH IN FINRA RULE 6760. THE FINDINGS STATED THAT THE FIRM FAILEDTO REPORT THE CORRECT TIME OF EXECUTION IN TRACE-ELIGIBLESECURITIZED PRODUCTS AND S1 TRANSACTIONS IN TRACE-ELIGIBLEAGENCY DEBT SECURITIES TO TRACE. THE FINDINGS ALSO STATED THATTHE FIRM FAILED TO SHOW THE CORRECT TIME OF EXECUTION ON THEMEMORANDUM OF BROKERAGE ORDERS. THE FINDINGS ALSO INCLUDEDTHAT THE FIRM FAILED TO REPORT S1 TRANSACTIONS IN TRACE-ELIGIBLEAGENCY DEBT SECURITIES TO TRACE WITHIN 15 MINUTES OF THEEXECUTION TIME. FINRA FOUND THAT THE FIRM'S SUPERVISORY SYSTEMDID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH RESPECT TO THE APPLICABLE SECURITIESLAWS AND REGULATIONS AND THE RULES OF FINRA, CONCERNING TRADEREPORTING IN TRACE-ELIGIBLE SECURITIES.







Initiated By: FINRA






Other Product Type(s): AGENCY DEBT SECURITIES AND SECURITIZED PRODUCTS.

WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT AS MANAGINGUNDERWRITER, FAILED TO REPORT NEW ISSUE OFFERINGS IN TRADEREPORTING AND COMPLIANCE ENGINE (TRACE)-ELIGIBLE CORPORATEDEBT SECURITIES TO FINRA ACCORDING TO THE TIME FRAMES SETFORTH IN FINRA RULE 6760. THE FINDINGS STATED THAT THE FIRM FAILEDTO REPORT THE CORRECT TIME OF EXECUTION IN TRACE-ELIGIBLESECURITIZED PRODUCTS AND S1 TRANSACTIONS IN TRACE-ELIGIBLEAGENCY DEBT SECURITIES TO TRACE. THE FINDINGS ALSO STATED THATTHE FIRM FAILED TO SHOW THE CORRECT TIME OF EXECUTION ON THEMEMORANDUM OF BROKERAGE ORDERS. THE FINDINGS ALSO INCLUDEDTHAT THE FIRM FAILED TO REPORT S1 TRANSACTIONS IN TRACE-ELIGIBLEAGENCY DEBT SECURITIES TO TRACE WITHIN 15 MINUTES OF THEEXECUTION TIME. FINRA FOUND THAT THE FIRM'S SUPERVISORY SYSTEMDID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH RESPECT TO THE APPLICABLE SECURITIESLAWS AND REGULATIONS AND THE RULES OF FINRA, CONCERNING TRADEREPORTING IN TRACE-ELIGIBLE SECURITIES.


Resolution:





No




Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE IMPOSITION OF A CENSURE AND A FINE OF $90,000 AS WELL AS TOTHE ENTRY OF FINDINGS THAT: AS MANAGING UNDERWRITER, THE FIRMFAILED TO REPORT NEW ISSUE OFFERINGS IN TRADE REPORTING ANDCOMPLIANCE ENGINE (TRACE)-ELIGIBLE CORPORATE DEBT SECURITIESTO FINRA ACCORDING TO THE TIME FRAMES SET FORTH IN FINRA RULE6760. THE FINDINGS STATED THAT THE FIRM FAILED TO REPORT TO TRACETHE CORRECT TIME OF EXECUTION IN TRACE-ELIGIBLE SECURITIZEDPRODUCTS AND/OR CERTAIN TRANSACTIONS IN TRACE-ELIGIBLE AGENCYDEBT SECURITIES; THAT THE FIRM FAILED TO SHOW THE CORRECT TIMEOF EXECUTION ON THE MEMORANDUM OF BROKERAGE ORDERS; THATTHE FIRM FAILED TO REPORT TO TRACE TRANSACTIONS IN TRACE-ELIGIBLE AGENCY DEBT SECURITIES WITHIN 15 MINUTES OF THEEXECUTION TIME; AND THAT THE FIRM'S SUPERVISORY SYSTEM DID NOTPROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH RESPECT TO THE APPLICABLE SECURITIES LAWS ANDREGULATIONS AND THE RULES OF FINRA, CONCERNING TRADEREPORTING IN TRACE-ELIGIBLE SECURITIES.








Initiated By: FINRA




CENSURE




Other Product Type(s): AGENCY DEBT SECURITIES AND SECURITIZED PRODUCTS.

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE IMPOSITION OF A CENSURE AND A FINE OF $90,000 AS WELL AS TOTHE ENTRY OF FINDINGS THAT: AS MANAGING UNDERWRITER, THE FIRMFAILED TO REPORT NEW ISSUE OFFERINGS IN TRADE REPORTING ANDCOMPLIANCE ENGINE (TRACE)-ELIGIBLE CORPORATE DEBT SECURITIESTO FINRA ACCORDING TO THE TIME FRAMES SET FORTH IN FINRA RULE6760. THE FINDINGS STATED THAT THE FIRM FAILED TO REPORT TO TRACETHE CORRECT TIME OF EXECUTION IN TRACE-ELIGIBLE SECURITIZEDPRODUCTS AND/OR CERTAIN TRANSACTIONS IN TRACE-ELIGIBLE AGENCYDEBT SECURITIES; THAT THE FIRM FAILED TO SHOW THE CORRECT TIMEOF EXECUTION ON THE MEMORANDUM OF BROKERAGE ORDERS; THATTHE FIRM FAILED TO REPORT TO TRACE TRANSACTIONS IN TRACE-ELIGIBLE AGENCY DEBT SECURITIES WITHIN 15 MINUTES OF THEEXECUTION TIME; AND THAT THE FIRM'S SUPERVISORY SYSTEM DID NOTPROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH RESPECT TO THE APPLICABLE SECURITIES LAWS ANDREGULATIONS AND THE RULES OF FINRA, CONCERNING TRADEREPORTING IN TRACE-ELIGIBLE SECURITIES.


Resolution:






i








Initiated By: ICE FUTURES U.S., INC.








Allegations: THE BUSINESS CONDUCT COMMITTEE OF THE ICE FUTURES U.S., INC.ALLEGED THAT UBS SECURITIES LLC MAY HAVE VIOLATED EXCHANGERULE 2.35, ON TRADE DATES NOVEMBER 12TH AND 13TH, 2014. THE FIRMNEITHER ADMITTED NOR DENIED THE ALLEGATION.



Resolution:




Settled


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Allegations: BETWEEN JANUARY 2012 AND JULY 2013 (THE "REVIEW PERIOD"), ON 68INSTANCES, UBS TRADED AT PRICES EQUAL TO THE ISE BEST BID &OFFER ("IBBO") BUT IMPROPERLY AHEAD OF THE OTHER ISE MARKETPARTICIPANT ORDERS THAT HAD PRIORITY, AS A RESULT OF ANINADVERTENT PROGRAMMING ERROR THAT CAUSED ITS PROPRIETARYSYSTEM TO INACCURATELY OBSERVE THE IBBO PRIOR TO ITSUTILIZATION OF THE TRADE REPORT FUNCTION. DURING THE REVIEWPERIOD, ON 15 INSTANCES, UBS TRADED AT PRICES INFERIOR TO THEIBBO AND IMPROPERLY AHEAD OF THE OTHER ISE MARKET PARTICIPANTORDERS THAT HAD PRIORITY, AS A RESULT OF THE SAME PROGRAMMINGERROR. THIS CONDUCT CONSTITUTES VIOLATION OF ISE RULE 713 (C),AND (E).DURING THE REVIEW PERIOD, UBS EXPERIENCED 27 INSTANCES WHERESYSTEM ISSUES CAUSED ORDERS THAT HAD BEEN LOCKED TO THE FIRMTO REMAIN UNEXECUTED FOR AN EXTENDED PERIOD OF TIME RATHERTHAN IMMEDIATELY HANDLING EACH OTHER. THIS CONDUCTCONSTITUTES VIOLATION OF ISE RULE 803DURING THE REVIEW PERIOD, UBS FAILED TO MAINTAIN ADEQUATEWRITTEN SUPERVISORY PROCEDURES SPECIFIC TO THE ISE'S TRADEREPORT FUNCTION., AND FAILED TO IMPLEMENT AN ADEQUATE SYSTEMOF REVIEW TO ENSURE COMPLIANCE WITH ISE RULES 713 & 803. THISCONDUCT CONSTITUTES VIOLATION OF ISE RULE 401.












Docket/Case Number: 2012-071, 2012-138, 2012-203, 2013-013,2013-88 & 2013-152



BETWEEN JANUARY 2012 AND JULY 2013 (THE "REVIEW PERIOD"), ON 68INSTANCES, UBS TRADED AT PRICES EQUAL TO THE ISE BEST BID &OFFER ("IBBO") BUT IMPROPERLY AHEAD OF THE OTHER ISE MARKETPARTICIPANT ORDERS THAT HAD PRIORITY, AS A RESULT OF ANINADVERTENT PROGRAMMING ERROR THAT CAUSED ITS PROPRIETARYSYSTEM TO INACCURATELY OBSERVE THE IBBO PRIOR TO ITSUTILIZATION OF THE TRADE REPORT FUNCTION. DURING THE REVIEWPERIOD, ON 15 INSTANCES, UBS TRADED AT PRICES INFERIOR TO THEIBBO AND IMPROPERLY AHEAD OF THE OTHER ISE MARKET PARTICIPANTORDERS THAT HAD PRIORITY, AS A RESULT OF THE SAME PROGRAMMINGERROR. THIS CONDUCT CONSTITUTES VIOLATION OF ISE RULE 713 (C),AND (E).DURING THE REVIEW PERIOD, UBS EXPERIENCED 27 INSTANCES WHERESYSTEM ISSUES CAUSED ORDERS THAT HAD BEEN LOCKED TO THE FIRMTO REMAIN UNEXECUTED FOR AN EXTENDED PERIOD OF TIME RATHERTHAN IMMEDIATELY HANDLING EACH OTHER. THIS CONDUCTCONSTITUTES VIOLATION OF ISE RULE 803DURING THE REVIEW PERIOD, UBS FAILED TO MAINTAIN ADEQUATEWRITTEN SUPERVISORY PROCEDURES SPECIFIC TO THE ISE'S TRADEREPORT FUNCTION., AND FAILED TO IMPLEMENT AN ADEQUATE SYSTEMOF REVIEW TO ENSURE COMPLIANCE WITH ISE RULES 713 & 803. THISCONDUCT CONSTITUTES VIOLATION OF ISE RULE 401.


Resolution:


Sanction Details: FIRM FINED $65,000.


Yes




Allegations: DURING THE REVIEW PERIOD JANUARY 2012 THRU JULY 2013, THE ISEALLEGED THAT UBS SECURITIES LLC VIOLATED ISE RULES: 713(C) AND(E)803, AND 401. THE FIRM DOES NOT ADMIT OR DENY THE ALLEGATIONS.







Initiated By: INTERNATIONAL SECURITIES EXCHANGE LLC


Censure


FINE 65,000





DURING THE REVIEW PERIOD JANUARY 2012 THRU JULY 2013, THE ISEALLEGED THAT UBS SECURITIES LLC VIOLATED ISE RULES: 713(C) AND(E)803, AND 401. THE FIRM DOES NOT ADMIT OR DENY THE ALLEGATIONS.


Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED.




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Allegations: SEC ADMIN RELEASES 33-9697 AND 34-74060 / JANUARY 15, 2015: THESECURITIES AND EXCHANGE COMMISSION DEEMS IT APPROPRIATE ANDIN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED AGAINST UBSSECURITIES LLC ("UBS"). IN ANTICIPATION OF THE INSTITUTION OF THESEPROCEEDINGS, UBS HAS SUBMITTED AN OFFER OF SETTLEMENT("OFFER") WHICH THE COMMISSION HAS DETERMINED TO ACCEPT.SOLELY FOR THE PURPOSE OF THESE PROCEEDINGS AND ANY OTHERPROCEEDINGS BROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TOWHICH THE COMMISSION IS A PARTY, AND WITHOUT ADMITTING ORDENYING THE FINDINGS HEREIN, EXCEPT AS TO THE COMMISSION'SJURISDICTION OVER IT AND THE SUBJECT MATTER OF THESEPROCEEDINGS, WHICH ARE ADMITTED, UBS CONSENTS TO THE ENTRY OFTHIS ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESISTPROCEEDINGS MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONSAND A CEASE-AND-DESIST ORDER. ON THE BASIS OF THIS ORDER ANDUBS'S OFFER, THE COMMISSION FINDS THAT: UBS IS THE OWNER ANDOPERATOR OF UBS ATS, AN ALTERNATIVE TRADING SYSTEM ("ATS")COMMONLY REFERRED TO AS A "DARK POOL." BETWEEN 2008 AND 2012,UBS'S OPERATION OF AND DISCLOSURES REGARDING UBS ATS VIOLATEDFEDERAL SECURITIES LAWS AND REGULATIONS AT DIFFERENT TIMES ANDIN NUMEROUS WAYS. BETWEEN MAY 2008 AND MARCH 2011, UBSVIOLATED RULE 612 OF REGULATION NMS PROMULGATED UNDER THEEXCHANGE ACT BY ACCEPTING AND RANKING HUNDREDS OF MILLIONSOF ORDERS PRICED IN INCREMENTS SMALLER THAN ONE CENT ("SUB-PENNY ORDERS"). WHILE MANY OF THE SUB-PENNY ORDERS ACCEPTEDBY UBS RESULTED FROM TECHNICAL PROBLEMS, MANY ALSO WERE THEPRODUCT OF TWO ORDER TYPES CREATED FOR UBS ATS:PRIMARYPEGPLUS ("PPP") AND WHOLE PENNY OFFSET. IN ADDITION,BECAUSE EXCHANGES AND ATSS THAT COMPLIED WITH RULE 612 OFREGULATION ATS REJECTED SUB-PENNY PRICED ORDERS SUBMITTED BYTHEIR SUBSCRIBERS OR DID NOT PROVIDE THOSE SUBSCRIBERS WITHACCESS TO FUNCTIONALITIES THAT PERMITTED THEM TO ENTER SUB-PENNY ORDERS, THOSE ORDER TYPES PROVIDED UBS ATS WITH ANUNFAIR COMPETITIVE ADVANTAGE OVER THOSE TRADING VENUES.DURING THE PERIOD JUNE 2010 THROUGH MARCH 2011, UBS VIOLATEDSECTION 17(A)(2) OF THE SECURITIES ACT BY FAILING TO DISCLOSE PPPTO ALL UBS ATS SUBSCRIBERS. ALTHOUGH IT WAS EVENTUALLYDISCLOSED TO MOST SUBSCRIBERS, PPP WAS PITCHED ALMOSTEXCLUSIVELY TO MARKET MAKERS AND/OR HIGH-FREQUENCY TRADING("HFT") FIRMS, WHICH UBS EXPECTED TO BE THE PRIMARY USERS OF THEORDER TYPE. DURING THE PERIOD MARCH 2010 THROUGH JULY 2012,UBS VIOLATED SECTION 17(A)(2) OF THE SECURITIES ACT BY FAILING TOPROVIDE ALL UBS ATS SUBSCRIBERS WITH NOTICE OF A FEATURE THATCOULD PREVENT AN ORDER FROM EXECUTING IN THE ATS AGAINSTORDERS FROM SUBSCRIBERS WHOSE FLOW WAS DESIGNATED AS "NON-NATURAL," TYPICALLY MARKET MAKERS AND/OR HFT FIRMS. THISFEATURE - CALLED THE "NATURAL-ONLY CROSSING RESTRICTION" - WASNEITHER DISCLOSED TO NOR MADE AVAILABLE TO ALL UBS ATSSUBSCRIBERS. PRIOR TO JULY 2012, UBS HAD NO INTERNAL POLICY ORPROCEDURE REQUIRING THE DISCLOSURE OF SUCH FEATURES OR NEWORDER TYPES TO ALL SUBSCRIBERS. (CONT. IN COMMENT SECTION)







Initiated By: UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Cease and Desist





SEC ADMIN RELEASES 33-9697 AND 34-74060 / JANUARY 15, 2015: THESECURITIES AND EXCHANGE COMMISSION DEEMS IT APPROPRIATE ANDIN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED AGAINST UBSSECURITIES LLC ("UBS"). IN ANTICIPATION OF THE INSTITUTION OF THESEPROCEEDINGS, UBS HAS SUBMITTED AN OFFER OF SETTLEMENT("OFFER") WHICH THE COMMISSION HAS DETERMINED TO ACCEPT.SOLELY FOR THE PURPOSE OF THESE PROCEEDINGS AND ANY OTHERPROCEEDINGS BROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TOWHICH THE COMMISSION IS A PARTY, AND WITHOUT ADMITTING ORDENYING THE FINDINGS HEREIN, EXCEPT AS TO THE COMMISSION'SJURISDICTION OVER IT AND THE SUBJECT MATTER OF THESEPROCEEDINGS, WHICH ARE ADMITTED, UBS CONSENTS TO THE ENTRY OFTHIS ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESISTPROCEEDINGS MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONSAND A CEASE-AND-DESIST ORDER. ON THE BASIS OF THIS ORDER ANDUBS'S OFFER, THE COMMISSION FINDS THAT: UBS IS THE OWNER ANDOPERATOR OF UBS ATS, AN ALTERNATIVE TRADING SYSTEM ("ATS")COMMONLY REFERRED TO AS A "DARK POOL." BETWEEN 2008 AND 2012,UBS'S OPERATION OF AND DISCLOSURES REGARDING UBS ATS VIOLATEDFEDERAL SECURITIES LAWS AND REGULATIONS AT DIFFERENT TIMES ANDIN NUMEROUS WAYS. BETWEEN MAY 2008 AND MARCH 2011, UBSVIOLATED RULE 612 OF REGULATION NMS PROMULGATED UNDER THEEXCHANGE ACT BY ACCEPTING AND RANKING HUNDREDS OF MILLIONSOF ORDERS PRICED IN INCREMENTS SMALLER THAN ONE CENT ("SUB-PENNY ORDERS"). WHILE MANY OF THE SUB-PENNY ORDERS ACCEPTEDBY UBS RESULTED FROM TECHNICAL PROBLEMS, MANY ALSO WERE THEPRODUCT OF TWO ORDER TYPES CREATED FOR UBS ATS:PRIMARYPEGPLUS ("PPP") AND WHOLE PENNY OFFSET. IN ADDITION,BECAUSE EXCHANGES AND ATSS THAT COMPLIED WITH RULE 612 OFREGULATION ATS REJECTED SUB-PENNY PRICED ORDERS SUBMITTED BYTHEIR SUBSCRIBERS OR DID NOT PROVIDE THOSE SUBSCRIBERS WITHACCESS TO FUNCTIONALITIES THAT PERMITTED THEM TO ENTER SUB-PENNY ORDERS, THOSE ORDER TYPES PROVIDED UBS ATS WITH ANUNFAIR COMPETITIVE ADVANTAGE OVER THOSE TRADING VENUES.DURING THE PERIOD JUNE 2010 THROUGH MARCH 2011, UBS VIOLATEDSECTION 17(A)(2) OF THE SECURITIES ACT BY FAILING TO DISCLOSE PPPTO ALL UBS ATS SUBSCRIBERS. ALTHOUGH IT WAS EVENTUALLYDISCLOSED TO MOST SUBSCRIBERS, PPP WAS PITCHED ALMOSTEXCLUSIVELY TO MARKET MAKERS AND/OR HIGH-FREQUENCY TRADING("HFT") FIRMS, WHICH UBS EXPECTED TO BE THE PRIMARY USERS OF THEORDER TYPE. DURING THE PERIOD MARCH 2010 THROUGH JULY 2012,UBS VIOLATED SECTION 17(A)(2) OF THE SECURITIES ACT BY FAILING TOPROVIDE ALL UBS ATS SUBSCRIBERS WITH NOTICE OF A FEATURE THATCOULD PREVENT AN ORDER FROM EXECUTING IN THE ATS AGAINSTORDERS FROM SUBSCRIBERS WHOSE FLOW WAS DESIGNATED AS "NON-NATURAL," TYPICALLY MARKET MAKERS AND/OR HFT FIRMS. THISFEATURE - CALLED THE "NATURAL-ONLY CROSSING RESTRICTION" - WASNEITHER DISCLOSED TO NOR MADE AVAILABLE TO ALL UBS ATSSUBSCRIBERS. PRIOR TO JULY 2012, UBS HAD NO INTERNAL POLICY ORPROCEDURE REQUIRING THE DISCLOSURE OF SUCH FEATURES OR NEWORDER TYPES TO ALL SUBSCRIBERS. (CONT. IN COMMENT SECTION)







Cease and Desist



Resolution:

Other Sanctions Ordered: PREJUDGMENT INTEREST ON DISGORGEMENT

Sanction Details: UBS CEASE AND DESIST FROM COMMITTING OR CAUSING ANYVIOLATIONS AND ANY FUTURE VIOLATIONS OF THESE FEDERALSECURITIES LAWS AND REGULATIONS; IS CENSURED; SHALL PAY A CIVILMONEY PENALTY IN THE AMOUNT OF $12,000,000, DISGORGEMENT OF$2,240,702.50 AND PREJUDGMENT INTEREST OF $235,686.14.

Regulator Statement (CONT. FROM #7 ALLEGATIONS SECTION) UBS VIOLATED RULE 301(B)(2) OFREGULATION ATS PROMULGATED UNDER THE EXCHANGE ACT BY (A)FILING WITH THE COMMISSION AND FAILING TO AMEND A FORM ATS THATINCLUDED INCONSISTENT AND INCOMPLETE STATEMENTS CONCERNINGUBS ATS'S ACCEPTANCE OF SUB-PENNY ORDERS, (B) FAILING TO FILE, ATLEAST 20 DAYS BEFORE IT IMPLEMENTED THE CHANGE, AN AMENDMENTON FORM ATS THAT DISCLOSED A MODIFICATION TO THE PPP ORDERTYPE; (C) FAILING TO FILE, AT LEAST 20 DAYS BEFORE IT IMPLEMENTEDTHE NATURAL-ONLY CROSSING RESTRICTION, AN AMENDMENT ON FORMATS THAT DISCLOSED THE EXISTENCE OF THE NATURAL-ONLY CROSSINGRESTRICTION AND THE FACT THAT IT WAS NOT AVAILABLE TO ALL USERSOF THE ATS, AND (D) FAILING TO ATTACH TO THE FORM ATS A COPY OFUBS ATS'S SUBSCRIBER MANUAL OR OTHER MATERIALS THAT WEREPROVIDED TO UBS ATS SUBSCRIBERS. DURING FIVE MONTHS IN 2011 ANDWITH RESPECT TO SECURITIES FOR WHICH UBS ATS ACCOUNTED FORFIVE PERCENT OR MORE OF THE AVERAGE DAILY VOLUME IN FOUR OFTHE SIX PRECEDING MONTHS AS A RESULT OF A LAPSE IN MONITORING,UBS VIOLATED RULE 301(B)(5) OF REGULATION ATS BY (A) FAILING TOESTABLISH WRITTEN STANDARDS FOR GRANTING SUBSCRIBERS ACCESSTO THE NATURAL-ONLY CROSSING RESTRICTION, (B) UNREASONABLYPROHIBITING SUBSCRIBERS FROM UTILIZING THAT CROSSINGRESTRICTION, AND (C) FAILING TO DISCLOSE INFORMATION ABOUT ITSGRANTS, DENIALS, AND LIMITATIONS OF ACCESS IN FORMS ATS-R THAT ITFILED WITH THE COMMISSION. PRIOR TO AUGUST 2012, UBS VIOLATEDRULE 301(B)(10) OF REGULATION ATS BY FAILING TO LIMIT ACCESS TO THECONFIDENTIAL TRADING INFORMATION OF UBS ATS SUBSCRIBERS,INCLUDING BY GRANTING ACCESS TO THE UBS ATS ORDER BOOK TO 103OF ITS EMPLOYEES - PRIMARILY INFORMATION TECHNOLOGY ("IT")PERSONNEL - WHO NEITHER OPERATED UBS ATS NOR HADRESPONSIBILITY FOR ITS COMPLIANCE FUNCTIONS. PRIOR TODECEMBER 2010, UBS VIOLATED SECTION 17(A) OF THE EXCHANGE ACT,EXCHANGE ACT RULE 17A-4(B)(1), AND RULES 301(B)(8) AND 303 OFREGULATION ATS BY FAILING TO KEEP FOR PRESCRIBED PERIODS ANDPRESERVE CERTAIN ORDER DATA FOR UBS ATS. AS A RESULT OF THECONDUCT, UBS WILLFULLY VIOLATED SECTION 17(A)(2) OF THESECURITIES ACT; SECTION 17(A) OF THE EXCHANGE ACT AND RULE 17A-4(B)(1); RULE 301(B)(2) OF REGULATION ATS; RULES 301(B)(5)(II)(A), (B) AND(D) OF REGULATION ATS; RULES 301(B)(8), 301(B)(10) AND 303 OFREGULATION ATS; AND RULE 612 OF REGULATION NMS.

ACCORDINGLY, IT IS HEREBY ORDERED THAT: UBS CEASE AND DESISTFROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTUREVIOLATIONS OF SECTION 17(A)(2) OF THE SECURITIES ACT, SECTION 17(A)OF THE EXCHANGE ACT AND RULE 17A-4(B)(1) THEREUNDER, RULES301(B)(2), 301(B)(5)(II)(A), 301(B)(5)(II)(B), 301(B)(5)(II)(D), 301(B)(8), 301(B)(10)AND 303 OF REGULATION ATS, AND RULE 612 OF REGULATION NMS; ISCENSURED; SHALL, WITHIN TEN DAYS OF THE ENTRY OF THIS ORDER, PAYA CIVIL MONEY PENALTY IN THE AMOUNT OF $12,000,000, DISGORGEMENTOF $2,240,702.50 AND PREJUDGMENT INTEREST OF $235,686.14 TO THESECURITIES AND EXCHANGE COMMISSION FOR TRANSFER TO THE U.S.TREASURY.


Yes

Sanctions Ordered: CensureMonetary/Fine $12,000,000.00Disgorgement/RestitutionCease and Desist/Injunction

Order






(CONT. FROM #7 ALLEGATIONS SECTION) UBS VIOLATED RULE 301(B)(2) OFREGULATION ATS PROMULGATED UNDER THE EXCHANGE ACT BY (A)FILING WITH THE COMMISSION AND FAILING TO AMEND A FORM ATS THATINCLUDED INCONSISTENT AND INCOMPLETE STATEMENTS CONCERNINGUBS ATS'S ACCEPTANCE OF SUB-PENNY ORDERS, (B) FAILING TO FILE, ATLEAST 20 DAYS BEFORE IT IMPLEMENTED THE CHANGE, AN AMENDMENTON FORM ATS THAT DISCLOSED A MODIFICATION TO THE PPP ORDERTYPE; (C) FAILING TO FILE, AT LEAST 20 DAYS BEFORE IT IMPLEMENTEDTHE NATURAL-ONLY CROSSING RESTRICTION, AN AMENDMENT ON FORMATS THAT DISCLOSED THE EXISTENCE OF THE NATURAL-ONLY CROSSINGRESTRICTION AND THE FACT THAT IT WAS NOT AVAILABLE TO ALL USERSOF THE ATS, AND (D) FAILING TO ATTACH TO THE FORM ATS A COPY OFUBS ATS'S SUBSCRIBER MANUAL OR OTHER MATERIALS THAT WEREPROVIDED TO UBS ATS SUBSCRIBERS. DURING FIVE MONTHS IN 2011 ANDWITH RESPECT TO SECURITIES FOR WHICH UBS ATS ACCOUNTED FORFIVE PERCENT OR MORE OF THE AVERAGE DAILY VOLUME IN FOUR OFTHE SIX PRECEDING MONTHS AS A RESULT OF A LAPSE IN MONITORING,UBS VIOLATED RULE 301(B)(5) OF REGULATION ATS BY (A) FAILING TOESTABLISH WRITTEN STANDARDS FOR GRANTING SUBSCRIBERS ACCESSTO THE NATURAL-ONLY CROSSING RESTRICTION, (B) UNREASONABLYPROHIBITING SUBSCRIBERS FROM UTILIZING THAT CROSSINGRESTRICTION, AND (C) FAILING TO DISCLOSE INFORMATION ABOUT ITSGRANTS, DENIALS, AND LIMITATIONS OF ACCESS IN FORMS ATS-R THAT ITFILED WITH THE COMMISSION. PRIOR TO AUGUST 2012, UBS VIOLATEDRULE 301(B)(10) OF REGULATION ATS BY FAILING TO LIMIT ACCESS TO THECONFIDENTIAL TRADING INFORMATION OF UBS ATS SUBSCRIBERS,INCLUDING BY GRANTING ACCESS TO THE UBS ATS ORDER BOOK TO 103OF ITS EMPLOYEES - PRIMARILY INFORMATION TECHNOLOGY ("IT")PERSONNEL - WHO NEITHER OPERATED UBS ATS NOR HADRESPONSIBILITY FOR ITS COMPLIANCE FUNCTIONS. PRIOR TODECEMBER 2010, UBS VIOLATED SECTION 17(A) OF THE EXCHANGE ACT,EXCHANGE ACT RULE 17A-4(B)(1), AND RULES 301(B)(8) AND 303 OFREGULATION ATS BY FAILING TO KEEP FOR PRESCRIBED PERIODS ANDPRESERVE CERTAIN ORDER DATA FOR UBS ATS. AS A RESULT OF THECONDUCT, UBS WILLFULLY VIOLATED SECTION 17(A)(2) OF THESECURITIES ACT; SECTION 17(A) OF THE EXCHANGE ACT AND RULE 17A-4(B)(1); RULE 301(B)(2) OF REGULATION ATS; RULES 301(B)(5)(II)(A), (B) AND(D) OF REGULATION ATS; RULES 301(B)(8), 301(B)(10) AND 303 OFREGULATION ATS; AND RULE 612 OF REGULATION NMS.

ACCORDINGLY, IT IS HEREBY ORDERED THAT: UBS CEASE AND DESISTFROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTUREVIOLATIONS OF SECTION 17(A)(2) OF THE SECURITIES ACT, SECTION 17(A)OF THE EXCHANGE ACT AND RULE 17A-4(B)(1) THEREUNDER, RULES301(B)(2), 301(B)(5)(II)(A), 301(B)(5)(II)(B), 301(B)(5)(II)(D), 301(B)(8), 301(B)(10)AND 303 OF REGULATION ATS, AND RULE 612 OF REGULATION NMS; ISCENSURED; SHALL, WITHIN TEN DAYS OF THE ENTRY OF THIS ORDER, PAYA CIVIL MONEY PENALTY IN THE AMOUNT OF $12,000,000, DISGORGEMENTOF $2,240,702.50 AND PREJUDGMENT INTEREST OF $235,686.14 TO THESECURITIES AND EXCHANGE COMMISSION FOR TRANSFER TO THE U.S.TREASURY.


Allegations: THE ORDER IS THE RESULT OF A SETTLEMENT BETWEEN UBSSECURITIES LLC AND THE U.S. SECURITIES AND EXCHANGE COMMISSION("SEC"). THE ALLEGATIONS IN THE ORDER RELATE TO THE OPERATION OFUBS' ALTERNATIVE TRADING SYSTEMS ("ATS") DURING THE PERIOD FROM2008 THROUGH MID-2012 AND INCLUDE THE FOLLOWING: (A) A FAILURETO DISCLOSE TO ALL SUBSCRIBERS OF THE UBS ATS A CROSSINGRESTRICTION REFERRED TO AS A "NATURAL-ONLY" RESTRICTION AND ANORDER TYPE CALLED THE PRIMARY PEG PLUS ("PPP") (B) VIOLATION OFREG NMS'S SUBPENNY RULE DUE TO CODING ERRORS AND THE USE OFTHE PPP ORDER TYPE AND ANOTHER ORDER TYPE CALLED THE WHOLEPENNY OFFSET ORDER TYPE; AND (C) VIOLATIONS OF REG ATS BYFAILING TO (1) LIMIT ACCESS TO CONFIDENTIAL ORDER INFORMATION, (2)ACCURATELY AND TIMELY FILE FORM ATS AMENDMENTS WITH THE SEC,(3) COMPLY WITH CERTAIN ACCESS AND FILING REQUIREMENTS THATWERE TRIGGERED DUE TO A LAPSE OF MONITORING DURING A FOURMONTH PERIOD IN 2011, AND (4) MAINTAIN ADEQUATE BOOKS ANDRECORDS. THE ORDER FINDS THAT UBS SECURITIES VIOLATED SECTION17(A)(2) OF THE SECURITIES ACT RULE 612 OF REG NMS, REG ATS RULES301(B)(5), 301(B)(10), AND 301(B)(2), AND SECTION 17(A) OF THE EXCHANGEACT AND RULE 17A-4 THEREUNDER.









Cease and Desist


CENSURE, MONETARY FINE





THE ORDER IS THE RESULT OF A SETTLEMENT BETWEEN UBSSECURITIES LLC AND THE U.S. SECURITIES AND EXCHANGE COMMISSION("SEC"). THE ALLEGATIONS IN THE ORDER RELATE TO THE OPERATION OFUBS' ALTERNATIVE TRADING SYSTEMS ("ATS") DURING THE PERIOD FROM2008 THROUGH MID-2012 AND INCLUDE THE FOLLOWING: (A) A FAILURETO DISCLOSE TO ALL SUBSCRIBERS OF THE UBS ATS A CROSSINGRESTRICTION REFERRED TO AS A "NATURAL-ONLY" RESTRICTION AND ANORDER TYPE CALLED THE PRIMARY PEG PLUS ("PPP") (B) VIOLATION OFREG NMS'S SUBPENNY RULE DUE TO CODING ERRORS AND THE USE OFTHE PPP ORDER TYPE AND ANOTHER ORDER TYPE CALLED THE WHOLEPENNY OFFSET ORDER TYPE; AND (C) VIOLATIONS OF REG ATS BYFAILING TO (1) LIMIT ACCESS TO CONFIDENTIAL ORDER INFORMATION, (2)ACCURATELY AND TIMELY FILE FORM ATS AMENDMENTS WITH THE SEC,(3) COMPLY WITH CERTAIN ACCESS AND FILING REQUIREMENTS THATWERE TRIGGERED DUE TO A LAPSE OF MONITORING DURING A FOURMONTH PERIOD IN 2011, AND (4) MAINTAIN ADEQUATE BOOKS ANDRECORDS. THE ORDER FINDS THAT UBS SECURITIES VIOLATED SECTION17(A)(2) OF THE SECURITIES ACT RULE 612 OF REG NMS, REG ATS RULES301(B)(5), 301(B)(10), AND 301(B)(2), AND SECTION 17(A) OF THE EXCHANGEACT AND RULE 17A-4 THEREUNDER.


Resolution:


Sanction Details: CENSURED, CIVIL MONEY PENALTY IN THE AMOUNT OF $12,000,000,DISGORGEMENT OF $2,240,702.50 AND PREJUDGMENT INTEREST OF$235,686.14.


Order


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Allegations: THE NEW YORK MERCANTILE EXCHANGE BUSINESS CONDUCTCOMMITTEE ALLEGED THAT UBS SECURITIES LLC VIOLATED RULE 526.UBS SECURIITES LLC NEITHER ADMITTED NOR DENIED THESE FINDINGS.







Initiated By: NEW YORK MERCANTILE EXCHANGE





Docket/Case Number: NYMEX 11-8359-BC



Allegations: THE NEW YORK MERCANTILE EXCHANGE BUSINESS CONDUCTCOMMITTEE ALLEGED THAT UBS SECURITIES LLC VIOLATED RULE 526.UBS SECURIITES LLC NEITHER ADMITTED NOR DENIED THESE FINDINGS.


Resolution:


Sanction Details: IN ACCORDANCE WITH THE SETTLEMENT OFFER, THE PANEL ORDEREDUBS SECURITIES LLC TO PAY A FINE OF $30,000.




i










Allegations: THE CHICAGO BOARD OF TRADE BUSINESS CONDUCT COMMITTEEALLEGED THAT UBS SECURITIES LLC VIOLATED CBOT RULES 526.F, 526.AAND 536.A. UBS SECURIITES LLC NEITHER ADMITTED NOR DENIED THESEFINDINGS.









Resolution:


Sanction Details: IN ACCORDANCE WITH THE SETTLEMENT OFFER, THE PANEL ORDEREDUBS SECURITIES LLC TO PAY A FINE OF $90,000.




i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITTRANSMITTED ORDER AUDIT TRAIL SYSTEM (OATS) REPORTSCONCERNING ORDERS THAT CONTAINED INACCURATE, INCOMPLETE, ORIMPROPERLY FORMATTED DATA. THE FINDINGS STATED THAT THE FIRMMADE AVAILABLE A REPORT THAT INCLUDED INCORRECT INFORMATIONON THE COVERED ORDERS IN NATIONAL MARKET SYSTEM SECURITIESTHAT IT RECEIVED FOR EXECUTION FROM ANY PERSON. THE FIRMFAILED TO REPORT THE CORRECT RELATED MARKET CENTER CODE(RMMC) TO THE FINRA/NASDAQ TRADE REPORTING FACILITY (FNTRF) ONLAST SALE REPORTS OF DESIGNATED SECURITIES, FAILED TO REPORTTHE CORRECT RMMC TO THE OVER-THE-COUNTER REPORTING FACILITY(OTCRF) ON LAST SALE REPORTS OF TRANSACTIONS IN OTC EQUITYSECURITIES AND FAILED TO REPORT THE CORRECT MARKET PARTICIPANTID (MPID) ON LAST REPORTS OF TRANSACTIONS IN OTC EQUITYSECURITIES. IN SIX INSTANCES, THE FIRM INCORRECTLY SUBMITTED TOTHE OTCRF A CLEARING-ONLY OR NON-TAPE, NON-CLEARING REPORT,BECAUSE THE FIRM INCORRECTLY DESIGNATED SIX TRANSACTIONS INOTC EQUITY SECURITIES AS OFFSETTING, "RISKLESS" PORTIONS OF "RISKLESS" PRINCIPAL TRANSACTIONS WHEN THE TRANSACTIONSSHOULD HAVE BEEN MEDIA REPORTED AS PRINCIPAL TRANSACTIONSINSTEAD. THE FIRM INCORRECTLY REPORTED A TRADE REPORTINGMODIFIER TO THE FNTRF RELATED TO DERIVATIVELY PRICEDTRANSACTIONS FOR ORDERS (AND INCORRECTLY REPORTED A "B"MODIFIER AS TO ONE OF THOSE ORDERS) AND ON THREE OCCASIONS,INCORRECTLY SUBMITTED TO THE FNTRF A CLEARING-ONLY OR NON-TAPE, NON-CLEARING REPORT, BECAUSE THE FIRM INCORRECTLYDESIGNATED THREE TRANSACTIONS IN DESIGNATED SECURITIES ASOFFSETTING, "RISKLESS" PORTIONS OF "RISKLESS" PRINCIPALTRANSACTIONS WHEN THE TRANSACTIONS SHOULD HAVE BEEN MEDIAREPORTED AS PRINCIPAL TRANSACTIONS INSTEAD. THE FINDINGS ALSOSTATED THAT THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO CERTAIN APPLICABLE SECURITIES LAWS AND REGULATIONS,AND FINRA RULES. THE FIRM'S WRITTEN SUPERVISORY PROCEDURES(WSPS) FAILED TO PROVIDE FOR ONE OR MORE OF THE FOUR MINIMUMREQUIREMENTS FOR ADEQUATE WSPS REGARDING RULE 605 OFREGULATION NMS, OATS ACCURACY, AND MULTIPLE MPID USAGE.







Initiated By: FINRA







WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITTRANSMITTED ORDER AUDIT TRAIL SYSTEM (OATS) REPORTSCONCERNING ORDERS THAT CONTAINED INACCURATE, INCOMPLETE, ORIMPROPERLY FORMATTED DATA. THE FINDINGS STATED THAT THE FIRMMADE AVAILABLE A REPORT THAT INCLUDED INCORRECT INFORMATIONON THE COVERED ORDERS IN NATIONAL MARKET SYSTEM SECURITIESTHAT IT RECEIVED FOR EXECUTION FROM ANY PERSON. THE FIRMFAILED TO REPORT THE CORRECT RELATED MARKET CENTER CODE(RMMC) TO THE FINRA/NASDAQ TRADE REPORTING FACILITY (FNTRF) ONLAST SALE REPORTS OF DESIGNATED SECURITIES, FAILED TO REPORTTHE CORRECT RMMC TO THE OVER-THE-COUNTER REPORTING FACILITY(OTCRF) ON LAST SALE REPORTS OF TRANSACTIONS IN OTC EQUITYSECURITIES AND FAILED TO REPORT THE CORRECT MARKET PARTICIPANTID (MPID) ON LAST REPORTS OF TRANSACTIONS IN OTC EQUITYSECURITIES. IN SIX INSTANCES, THE FIRM INCORRECTLY SUBMITTED TOTHE OTCRF A CLEARING-ONLY OR NON-TAPE, NON-CLEARING REPORT,BECAUSE THE FIRM INCORRECTLY DESIGNATED SIX TRANSACTIONS INOTC EQUITY SECURITIES AS OFFSETTING, "RISKLESS" PORTIONS OF "RISKLESS" PRINCIPAL TRANSACTIONS WHEN THE TRANSACTIONSSHOULD HAVE BEEN MEDIA REPORTED AS PRINCIPAL TRANSACTIONSINSTEAD. THE FIRM INCORRECTLY REPORTED A TRADE REPORTINGMODIFIER TO THE FNTRF RELATED TO DERIVATIVELY PRICEDTRANSACTIONS FOR ORDERS (AND INCORRECTLY REPORTED A "B"MODIFIER AS TO ONE OF THOSE ORDERS) AND ON THREE OCCASIONS,INCORRECTLY SUBMITTED TO THE FNTRF A CLEARING-ONLY OR NON-TAPE, NON-CLEARING REPORT, BECAUSE THE FIRM INCORRECTLYDESIGNATED THREE TRANSACTIONS IN DESIGNATED SECURITIES ASOFFSETTING, "RISKLESS" PORTIONS OF "RISKLESS" PRINCIPALTRANSACTIONS WHEN THE TRANSACTIONS SHOULD HAVE BEEN MEDIAREPORTED AS PRINCIPAL TRANSACTIONS INSTEAD. THE FINDINGS ALSOSTATED THAT THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO CERTAIN APPLICABLE SECURITIES LAWS AND REGULATIONS,AND FINRA RULES. THE FIRM'S WRITTEN SUPERVISORY PROCEDURES(WSPS) FAILED TO PROVIDE FOR ONE OR MORE OF THE FOUR MINIMUMREQUIREMENTS FOR ADEQUATE WSPS REGARDING RULE 605 OFREGULATION NMS, OATS ACCURACY, AND MULTIPLE MPID USAGE.


Resolution:

Other Sanctions Ordered: UNDERTAKING: REQUIRED TO REVISE THE FIRM'S WSPS



No




Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE IMPOSITION OF A CENSURE, $75,000 FINE, AN UNDERTAKING ANDTO THE ENTRY OF FINDINGS THAT IT TRANSMITTED REPORTS THATINCLUDED INACCURATE, INCOMPLETE, OR IMPROPERLY FORMATTEDDATA IN CONNECTION WITH THE FIRM'S AUDIT TRAIL SYSTEM (OATS),FINRA/NASDAQ TRADE REPORTING FACILITY (FNTRF), AND OVER-THE-COUNTER REPORTING FACILITY (OTCRF) REPORTING. THE FINDINGSALSO STATED THAT THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDEFOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCEWITH RESPECT TO CERTAIN APPLICABLE SECURITIES LAWS ANDREGULATIONS, AND FINRA RULES. THE FIRM'S WRITTEN SUPERVISORYPROCEDURES (WSPS) FAILED TO PROVIDE FOR ONE OR MORE OF THEFOUR MINIMUM REQUIREMENTS FOR ADEQUATE WSPS REGARDING RULE605 OF REGULATION NMS, OATS ACCURACY, AND MULTIPLE MARKETPARTICIPANT ID (MPID) USAGE.








Initiated By: FINRA









Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE IMPOSITION OF A CENSURE, $75,000 FINE, AN UNDERTAKING ANDTO THE ENTRY OF FINDINGS THAT IT TRANSMITTED REPORTS THATINCLUDED INACCURATE, INCOMPLETE, OR IMPROPERLY FORMATTEDDATA IN CONNECTION WITH THE FIRM'S AUDIT TRAIL SYSTEM (OATS),FINRA/NASDAQ TRADE REPORTING FACILITY (FNTRF), AND OVER-THE-COUNTER REPORTING FACILITY (OTCRF) REPORTING. THE FINDINGSALSO STATED THAT THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDEFOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCEWITH RESPECT TO CERTAIN APPLICABLE SECURITIES LAWS ANDREGULATIONS, AND FINRA RULES. THE FIRM'S WRITTEN SUPERVISORYPROCEDURES (WSPS) FAILED TO PROVIDE FOR ONE OR MORE OF THEFOUR MINIMUM REQUIREMENTS FOR ADEQUATE WSPS REGARDING RULE605 OF REGULATION NMS, OATS ACCURACY, AND MULTIPLE MARKETPARTICIPANT ID (MPID) USAGE.


Resolution:


Sanction Details: CENSURED, FINED $75,000, AND UNDERTAKING




i


Initiated By: CME CLEARING

Allegations: THE CME CDS RISK COMMITTEE ALLEGED THAT UBS SECURITIES LLC WASIN VIOLATION OF CME DATA SUBMISSION REQUIREMENTS.







Initiated By: CME CLEARING





Docket/Case Number:

Principal Product Type: Derivative(s)



Resolution:


Sanction Details: $10,000 FINE


Decision


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Initiated By: FINRA







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT EFFECTED322 TRANSACTIONS IN SECURITIES DURING 59 TRADING HALTS WITHRESPECT TO SUCH SECURITIES.












Sanction Details: THE FIRM WAS CENSURED AND FINED $30,000.FINE PAID IN FULL ON OCTOBER 30, 2014.


No



Initiated By: FINRA




CENSURE





Allegations: FINRA ALLEGED THAT THE FIRM EFFECTED 322 TRANSACTIONS INSECURITIES DURING 59 TRADING HALTS WITH RESPECT TO SUCHSECURITIES. THIS VIOLATED NASD RULE 3340 PRIOR TO DECEMBER 14,2009, FINRA RULE 5260 FOR CONDUCT ON OR AFTER DECEMBER 14, 2009AND FINRA RULE 2010. THE FIRM NEITHER ADMITS NOR DENIES THESEFINDINGS.



Resolution:













i


Initiated By: FINRA







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED ONFIVE OCCASIONS TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TOITS CUSTOMER ITS CORRECT CAPACITY IN THE TRANSACTION. THEFINDINGS STATED THAT THE FIRM FAILED ON TWO OCCASIONS TOPROVIDE WRITTEN NOTIFICATION TO ITS CUSTOMER OF THE DETAILS OFITS TRANSACTION WITH OR FOR THE CUSTOMER SPECIFIED IN SEC RULE10B-10. THE FIRM FAILED TO REPORT THE CORRECT TIME OF EXECUTIONTO THE FINRA/NASDAQ TRADE REPORTING FACILITY IN LAST SALEREPORTS OF TRANSACTIONS IN DESIGNATED SECURITIES. THE FINDINGSALSO STATED THAT THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDEFOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCEWITH RESPECT TO CERTAIN APPLICABLE SECURITIES LAWS ANDREGULATIONS, AND FINRA RULES. THE FIRM'S WRITTEN SUPERVISORYPROCEDURES FAILED TO PROVIDE FOR ONE OR MORE OF THE FOURMINIMUM REQUIREMENTS FOR ADEQUATE WRITTEN SUPERVISORYPROCEDURES, IN THE FOLLOWING SUBJECT AREAS: ALGORITHMICTRADING, BACKING AWAY, AND THE SUB-PENNY RULE.



Resolution:


No








Other Sanctions Ordered: UNDERTAKING: REQUIRED TO REVISE ITS WRITTEN SUPERVISORYPROCEDURES

Sanction Details: THE FIRM WAS CENSURED, FINED $27,500 AND UNDERTAKES TO REVISEITS WRITTEN SUPERVISORY PROCEDURES.FINE PAID IN FULL ON OCTOBER 28, 2014.


No



Initiated By: FINRA




CENSURE AND UNDERTAKING




Other Product Type(s): UNSPECIFIED SECURIITES

Allegations: FOR THE RELEVANT TIMEFRAME OCTOBER 5 - 6, 2011, FINRA ALLEGEDTHAT THE FIRM VIOLATED SEC RULE 10B-10 AND FINRA RULE 7230A. THEFIRM NEITHER ADMITTED OR DENIED THESE FINDINGS



Resolution:


Sanction Details: THE FIRM WAS CENSURED, FINED $27,500 AND UNDERTAKESTO REVISE ITS WRITTEN SUPERVISORY PROCEDURES.










i


Initiated By: FINRA







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOPROVIDE THE CORRECT CAPACITY IN WHICH THE FIRM ACTED IN 44,706TRANSACTIONS REPORTED TO THE FINRA/NASDAQ TRADE REPORTINGFACILITY AND THE OVER-THE-COUNTER (OTC) REPORTING FACILITYDURING A PORTION OF THE REVIEW PERIOD FROM FOURTH QUARTER2009 AND BETWEEN APRIL 21, 2011 AND JANUARY 3, 2012. THE FINDINGSSTATED THAT THE 44,706 INCIDENTS CONSTITUTED THE SUBSET OFMISREPORTS THAT THE FIRM COULD IDENTIFY OUT OF AN UNSPECIFIEDGREATER NUMBER OF TOTAL MISCAPACITY REPORTS THAT THE FIRMWAS UNABLE TO RECONSTRUCT DUE TO SYSTEMS CHANGES AND THEAGE OF THE CONDUCT. THE FINDINGS ALSO STATED THAT THE FIRMFAILED TO REASONABLY SUPERVISE COMPLIANCE WITH TRADEREPORTING REQUIREMENTS PERTAINING TO CAPACITY INPUT ACCURACY.THE FIRM FAILED TO PROMPTLY FOLLOW-UP ON A SERVICE ORDER THEFIRM SUBMITTED TO CORRECT A SYSTEMS ISSUE THAT LED TO THEABOVE MISCAPACITY ISSUES, AND FAILED TO PROMPTLY DETECT THATTHE SERVICE ORDER HAD NOT BEEN PROCESSED (WHICH RESULTED INTHE REPORTING ISSUE PERSISTING FOR MORE THAN A YEAR BEYONDTHE FIRM'S INITIAL ATTEMPT TO REMEDIATE IT).



Resolution:


No









Sanction Details: THE FIRM WAS CENSURED, FINED $60,000 AND IS REQUIRED TO EVALUATEAND UPDATE ITS SUPERVISORY SYSTEM, INCLUDING ITS WRITTENSUPERVISORY PROCEDURES, AS NECESSARY TO RECTIFY AND ADDRESSTHE SUPERVISORY FAILURES.FINE PAID IN FULL ON NOVEMBER 6, 2014.


No



Initiated By: FINRA









Allegations: FINRA ALLEGED THAT THE FIRM VIOLATED RULE 7230A(D)(7) AND 7330(D)(7) DURING THE PERIOD FOURTH QUARTER 2009 AND BETWEEN APRIL21,2011 AND JANUARY 3, 2012. THE FIRM NEITHER ADMITS OR DENIES THEFINDINGS.



Resolution:


Sanction Details: THE FIRM WAS CENSURED, FINED $60,000 AND IS REQUIRED TO EVALUATEAND UPDATE ITS SUPERVISORY SYSTEM, INCLUDING ITS WRITTENSUPERVISORY PROCEDURES, AS NECESSARY TO RECTIFY AND ADDRESSTHE SUPERVISORY FAILURES.









Sanction Details: THE FIRM WAS CENSURED, FINED $60,000 AND IS REQUIRED TO EVALUATEAND UPDATE ITS SUPERVISORY SYSTEM, INCLUDING ITS WRITTENSUPERVISORY PROCEDURES, AS NECESSARY TO RECTIFY AND ADDRESSTHE SUPERVISORY FAILURES.


i


Initiated By: NASDAQ OMX PHLX, LLC




CENSURE


Docket/Case Number: NO. 2014-07



Allegations: DURING THE PERIOD MARCH 1, 2014 THROUGH MARCH 31, 2014 IT WASALLEGED THAT UBS SECURITIES LLC FAILED TO QUOTE CONTINUOUSLY,WHICH VIOLATED EXCHANGE RULE 1014(B)(II)(D)(1).



Resolution:


Sanction Details: CENSURE AND FINE




i


Allegations: THE ICE BUSINESS CONDUCT COMMITTEE DETERMINED THAT UBSSECURITIES LLC MAY HAVE VIOLATED ICE CLEAR U.S. INC. RULE 403(A) BYREPORTING INACCURATE OPEN INTEREST DATA ON TWO INSTANCES,OCTOBER 15, 2012 AND NOVEMBER 27, 2012.







Initiated By: ICE FUTURES U.S., INC.








THE ICE BUSINESS CONDUCT COMMITTEE DETERMINED THAT UBSSECURITIES LLC MAY HAVE VIOLATED ICE CLEAR U.S. INC. RULE 403(A) BYREPORTING INACCURATE OPEN INTEREST DATA ON TWO INSTANCES,OCTOBER 15, 2012 AND NOVEMBER 27, 2012.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE VILOATION OF EXCHANGE RULES,UBS SECURITIES LLC HAS ENTERED INTO A SETTLEMENT AGREEMENTWITH ICE FUTURES U.S., INC. THE FIRM AGREES TO PAY A FINE OF $15,000.


Settled


i


Initiated By: FINRA



Allegations: FINRA RULES 2010, 2360(B)(5), NASD RULE 3010 - UBS SECURITIES LLCFAILED TO REPORT THE CONTRA PARTY TO THE LARGE OPTIONSPOSITIONS REPORT (LOPR) FOR APPROXIMATELY 40 PERCENT OF ITSREPORTED OVER-THE-COUNTER (OTC) OPTIONS POSITIONS. FIRMCUSTOMER RECORDS WERE REPORTED WITH AN INCORRECT ACCOUNTTYPE DESIGNATION OF FIRM FOR SOME OTC LOPR RECORDS. THE FIRMFAILED TO REPORT OTC POSITIONS TO THE LOPR WHERE THE ISSUERHAD BEEN THE PURCHASER OF THE SECURITY. THE FIRM FAILED TOESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, INCLUDING WRITTENSUPERVISORY PROCEDURES, REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH RULES GOVERNING THE REPORTING OF LARGEOPTIONS POSITIONS.














Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $40,000. FINE PAID INFULL 02/25/2014.


No




Allegations: DURING THE PERIOD FROM AUGUST 24, 2009 THROUGH AUGUST 20, 2010,UBS SECURITIES LLC ("UBS-S" OR THE "FIRM") FAILED TO REPORT THECONTRA PARTY TO THE LARGE OPTIONS POSITIONS REPORT ("LOPR")FOR APPROXIMATELY 40% OF THE FIRM'S REPORTED OVER-THE-COUNTER ("OTC") OPTIONS POSITIONS. DURING THE PERIOD FROMJANUARY 19, 2010 THROUGH MAY 5, 2010, THE FIRM'S CUSTOMERRECORDS WERE REPORTED WITH AN INCORRECT ACCOUNT TYPEDESIGNATION OF THE FIRM FOR SOME OTC LOPR RECORDS. DURINGTHE PERIOD FROM JANUARY 10, 2010 THROUGH OCTOBER 26, 2010, THEFIRM FAILED TO REPORT OTC POSITIONS TO THE LOPR WHERE THEISSUER HAD BEEN THE PURCHASER OF THE SECURITY. (FOR THE ABOVE,FINRA RULE 2360(B)(5) IS APPLICABLE.) FURTHER, DURING THE PERIODFROM AUGUST 24, 2009 THROUGH AUGUST 20, 2010, THE FIRM FAILED TOESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, INCLUDING WRITTENSUPERVISORY PROCEDURES, REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH RULE GOVERNING THE REPORTING OF LARGEOPTIONS POSITIONS. (FOR THE SUPERVISORY ALLEGATIONS, FINRARULE 2010 AND NASD RULE 3010 ARE APPLICABLE.)








Initiated By: FINRA




CENSURE





DURING THE PERIOD FROM AUGUST 24, 2009 THROUGH AUGUST 20, 2010,UBS SECURITIES LLC ("UBS-S" OR THE "FIRM") FAILED TO REPORT THECONTRA PARTY TO THE LARGE OPTIONS POSITIONS REPORT ("LOPR")FOR APPROXIMATELY 40% OF THE FIRM'S REPORTED OVER-THE-COUNTER ("OTC") OPTIONS POSITIONS. DURING THE PERIOD FROMJANUARY 19, 2010 THROUGH MAY 5, 2010, THE FIRM'S CUSTOMERRECORDS WERE REPORTED WITH AN INCORRECT ACCOUNT TYPEDESIGNATION OF THE FIRM FOR SOME OTC LOPR RECORDS. DURINGTHE PERIOD FROM JANUARY 10, 2010 THROUGH OCTOBER 26, 2010, THEFIRM FAILED TO REPORT OTC POSITIONS TO THE LOPR WHERE THEISSUER HAD BEEN THE PURCHASER OF THE SECURITY. (FOR THE ABOVE,FINRA RULE 2360(B)(5) IS APPLICABLE.) FURTHER, DURING THE PERIODFROM AUGUST 24, 2009 THROUGH AUGUST 20, 2010, THE FIRM FAILED TOESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, INCLUDING WRITTENSUPERVISORY PROCEDURES, REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH RULE GOVERNING THE REPORTING OF LARGEOPTIONS POSITIONS. (FOR THE SUPERVISORY ALLEGATIONS, FINRARULE 2010 AND NASD RULE 3010 ARE APPLICABLE.)


Resolution:


Sanction Details: THE FIRM, WITHOUT ADMITTING OR DENYING THE FINDINGS, CONSENTEDAN ENTRY OF FINDINGS ON THE ABOVE ALLEGATIONS AND TO THEIMPOSITION OF THE FOLLOWING SANCTION: A CENSURE AND FINE OF$40,000 ($25,000 FOR OPTIONS REPORTING VIOLATIONS; $15,000 FORSUPERVISION VIOLATIONS).




i


Allegations: FINRA RULES 6760, 7450 - UBS SECURITIES LLC TRANSMITTEDREPORTABLE ORDER EVENTS (ROES) TO THE ORDER AUDIT TRAILSYSTEM (OATS) THAT WERE REJECTED BY OATS FOR CONTEXT ORSYNTAX ERRORS AND WERE REPAIRABLE. THE FIRM FAILED TO REPAIRSOME OF THE REJECTED REPAIRABLE ROES SO THAT THE FIRM FAILEDTO TRANSMIT THEM TO OATS DURING THE REVIEW PERIOD. THE FIRMALSO FAILED TO REPAIR ADDITIONAL REJECTED ROES WITHIN THEREQUIRED FIVE BUSINESS DAYS, FAILED TO POPULATE THE MANDATORYROE RECONCILIATION ID ON OTHER REJECTED ROES, FAILED TO TIMELYREPAIR ADDITIONAL REJECTED ROES WITH A CORRECT ROERECONCILIATION ID, AND FAILED TO SUBMIT THE CORRECT MANDATORYROE RECONCILIATION ID ON ADDITIONAL REJECTED ROES DURING THEREVIEW PERIOD. THE FIRM, AS MANAGING UNDERWRITER, FAILED TOREPORT TO FINRA NEW ISSUE OFFERINGS IN CORPORATE BONDS WITHINTHE TIMEFRAME REQUIRED BY FINRA RULE 6760. THESE NEW ISSUEOFFERINGS CONSTITUTED 61 PERCENT OF THE NEW ISSUE OFFERINGSFOR WHICH FINRA IDENTIFIED THE FIRM AS HAVING SUCH FINRANOTIFICATION REQUIREMENTS FOR CORPORATE BOND OFFERINGS. THEFIRM, AS MANAGING UNDERWRITER, FAILED TO REPORT TO FINRA NEWISSUE OFFERINGS IN SECURITIZED PRODUCTS WITHIN THE TIMEFRAMEREQUIRED BY FINRA RULE 6760. THESE NEW ISSUE OFFERINGSCONSTITUTED 50 PERCENT OF THE NEW ISSUE OFFERINGS INSECURITIZED PRODUCTS INVOLVING COLLATERALIZED MORTGAGEOBLIGATIONS OR ASSET BACKED SECURITIES FOR WHICH FINRAIDENTIFIED THE FIRM AS HAVING SUCH FINRA NOTIFICATIONREQUIREMENTS.








Initiated By: FINRA






Other Product Type(s): SECURITIZED PRODUCTS

FINRA RULES 6760, 7450 - UBS SECURITIES LLC TRANSMITTEDREPORTABLE ORDER EVENTS (ROES) TO THE ORDER AUDIT TRAILSYSTEM (OATS) THAT WERE REJECTED BY OATS FOR CONTEXT ORSYNTAX ERRORS AND WERE REPAIRABLE. THE FIRM FAILED TO REPAIRSOME OF THE REJECTED REPAIRABLE ROES SO THAT THE FIRM FAILEDTO TRANSMIT THEM TO OATS DURING THE REVIEW PERIOD. THE FIRMALSO FAILED TO REPAIR ADDITIONAL REJECTED ROES WITHIN THEREQUIRED FIVE BUSINESS DAYS, FAILED TO POPULATE THE MANDATORYROE RECONCILIATION ID ON OTHER REJECTED ROES, FAILED TO TIMELYREPAIR ADDITIONAL REJECTED ROES WITH A CORRECT ROERECONCILIATION ID, AND FAILED TO SUBMIT THE CORRECT MANDATORYROE RECONCILIATION ID ON ADDITIONAL REJECTED ROES DURING THEREVIEW PERIOD. THE FIRM, AS MANAGING UNDERWRITER, FAILED TOREPORT TO FINRA NEW ISSUE OFFERINGS IN CORPORATE BONDS WITHINTHE TIMEFRAME REQUIRED BY FINRA RULE 6760. THESE NEW ISSUEOFFERINGS CONSTITUTED 61 PERCENT OF THE NEW ISSUE OFFERINGSFOR WHICH FINRA IDENTIFIED THE FIRM AS HAVING SUCH FINRANOTIFICATION REQUIREMENTS FOR CORPORATE BOND OFFERINGS. THEFIRM, AS MANAGING UNDERWRITER, FAILED TO REPORT TO FINRA NEWISSUE OFFERINGS IN SECURITIZED PRODUCTS WITHIN THE TIMEFRAMEREQUIRED BY FINRA RULE 6760. THESE NEW ISSUE OFFERINGSCONSTITUTED 50 PERCENT OF THE NEW ISSUE OFFERINGS INSECURITIZED PRODUCTS INVOLVING COLLATERALIZED MORTGAGEOBLIGATIONS OR ASSET BACKED SECURITIES FOR WHICH FINRAIDENTIFIED THE FIRM AS HAVING SUCH FINRA NOTIFICATIONREQUIREMENTS.


Resolution:



No









Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $100,000. FINE PAID INFULL ON JANUARY 16, 2014.


Initiated By: FINRA






Other Product Type(s): SECURITIZED PRODUCTS

Allegations: UBS, WITHOUT ADMITTING OR DENYING, CONSENTED TO FINDINGS THATTHE FIRM VIOLATED FINRA RULES 6760 AND 7450. SPECIFICALLY, UBSSECURITIES LLC TRANSMITTED REPORTABLE ORDER EVENTS (ROES) TOTHE ORDER AUDIT TRAIL SYSTEM (OATS) THAT WERE REJECTED BY OATSFOR CONTEXT OR SYNTAX ERRORS AND WERE REPAIRABLE. THE FIRMFAILED TO REPAIR SOME OF THE REJECTED REPAIRABLE ROES SO THATTHE FIRM FAILED TO TRANSMIT THEM TO OATS DURING THE REVIEWPERIOD. THE FIRM ALSO FAILED TO REPAIR ADDITIONAL REJECTED ROESWITHIN THE REQUIRED FIVE BUSINESS DAYS, FAILED TO POPULATE THEMANDATORY ROE RECONCILIATION ID ON OTHER REJECTED ROES,FAILED TO TIMELY REPAIR ADDITIONAL REJECTED ROES WITH A CORRECTROE RECONCILIATION ID, AND FAILED TO SUBMIT THE CORRECTMANDATORY ROE RECONCILIATION ID ON ADDITIONAL REJECTED ROESDURING THE REVIEW PERIOD. THE FIRM, AS MANAGING UNDERWRITER,FAILED TO REPORT TO FINRA NEW ISSUE OFFERINGS IN CORPORATEBONDS WITHIN THE TIMEFRAME REQUIRED BY FINRARULE 6760. THESE NEW ISSUE OFFERINGS CONSTITUTED 61 PERCENT OFTHE NEW ISSUE OFFERINGS FOR WHICH FINRA IDENTIFIED THE FIRM ASHAVING SUCH FINRA NOTIFICATION REQUIREMENTS FOR CORPORATEBOND OFFERINGS. THE FIRM, AS MANAGING UNDERWRITER, FAILED TOREPORT TO FINRA NEW ISSUE OFFERINGS IN SECURITIZED PRODUCTSWITHIN THE TIMEFRAME REQUIRED BY FINRA RULE 6760. THESE NEWISSUE OFFERINGS CONSTITUTED 50 PERCENT OF THE NEW ISSUEOFFERINGS IN SECURITIZED PRODUCTS INVOLVING COLLATERALIZEDMORTGAGE OBLIGATIONS OR ASSET BACKED SECURITIES FOR WHICHFINRA IDENTIFIED THE FIRM AS HAVING SUCH FINRA NOTIFICATIONREQUIREMENTS.











CENSURE


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $100,000.




i







Docket/Case Number: NYMEX RSRH-13-2017



Allegations: AFTER CONDUCTING A REVIEW OF UBS SECURITIES LLC'S (UBS-S)POSITION REPORTING DURING THE PERIOD AUGUST 1 - 30, 2013, CMEGROUP MARKET REGULATION IDENTIFIED THE FOLLOWING REPORTINGINFRACTIONS IN VIOLATION OF NYMEX RULE 811:FOR TRADE DATE AUGUST 16, 2013, UBS-S REPORTED 4,082 LONG AND4,849 SHORT IN THE SEPTEMBER 2013 CRUDE OIL FUTURES CONTRACT,OVERSTATING OPEN INTEREST BY 4.90%; AND ON TRADE DATE AUGUST19, 2013, UBS-S SUBMITTED AN EQUAL ADJUSTMENT DECREASING OPENINTEREST IN THE SEPTEMBER 2013 CRUDE OIL FUTURES CONTRACT BY3,408 CONTRACTS.


Resolution: Other 203©2022 FINRA. All rights reserved. Report about UBS SECURITIES LLC






Resolution:


Sanction Details: SUMMARY FINE


Other


i


Initiated By: FINRA






Other Product Type(s): DESIGNATED SECURITIES

Allegations: FINRA RULE 6380A(B) - UBS SECURITIES LLC DOUBLE REPORTED TO THEFINRA/NASDAQ TRADE REPORTING FACILITY (FNTRF) LAST SALEREPORTS OF TRANSACTIONS IN DESIGNATED SECURITIES.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $25,000. INDETERMINING THE AMOUNT OF THE FINE, FINRA TOOK INTOCONSIDERATION THAT BEFORE IT COMMENCED THE REVIEW, THE FIRMSELF-REPORTED TO FINRA ITS DEFICIENCIES WITH RESPECT TOCOMPLYING WITH FINRA RULE 6380A(B) AND ALSO UNDERTOOKCORRECTIVE MEASURES.FINE PAID IN FULL ON NOVEMBER 12, 2013.


No









Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $25,000. INDETERMINING THE AMOUNT OF THE FINE, FINRA TOOK INTOCONSIDERATION THAT BEFORE IT COMMENCED THE REVIEW, THE FIRMSELF-REPORTED TO FINRA ITS DEFICIENCIES WITH RESPECT TOCOMPLYING WITH FINRA RULE 6380A(B) AND ALSO UNDERTOOKCORRECTIVE MEASURES.FINE PAID IN FULL ON NOVEMBER 12, 2013.


Initiated By: FINRA




CENSURE




Other Product Type(s): DESIGNATED SECURITIES

Allegations: FINRA ALLEGED THAT UBS SECURITIES LLC DOUBLE REPORTED TO THEFINRA/NASDAQ TRADE REPORTING FACILITY (FNTRF) LAST SALEREPORTS OF TRANSACTIONS IN DESIGNATED SECURITIES VIOLATINGFINRA RULE 6380A(B).



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM HAS BEEN CENSURED AND FINED$25,000.

Firm Statement IN DETERMINING THE AMOUNT OF THE FINE, FINRA TOOK INTOCONSIDERATION THAT BEFORE IT COMMENCED THE REVIEW, THE FIRMSELF-REPORTED TO FINRA ITS DEFICIENCIES WITH RESPECT TOCOMPLYING WITH FINRA RULE 6380A(B) AND ALSO UNDERTOOKCORRECTIVE MEASURES.









IN DETERMINING THE AMOUNT OF THE FINE, FINRA TOOK INTOCONSIDERATION THAT BEFORE IT COMMENCED THE REVIEW, THE FIRMSELF-REPORTED TO FINRA ITS DEFICIENCIES WITH RESPECT TOCOMPLYING WITH FINRA RULE 6380A(B) AND ALSO UNDERTOOKCORRECTIVE MEASURES.


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Initiated By: FINRA






Allegations: SECURITIES EXCHANGE ACT OF 1934 RULES 15C3-3(E), 15C3-3(G), FINRARULE 2010, NASD RULE 3010(A): THE FIRM HAD AN APPROXIMATELY $400MILLION HINDSIGHT DEFICIENCY IN ITS RESERVE BANK ACCOUNTS AS ARESULT OF CASH BEING SUBSTITUTED FOR UNQUALIFIED SECURITIESAFTER 10:00 A.M. THIS SUBSTITUTION WAS NOT ATTRIBUTABLE TO THEFIRM. NEVERTHELESS, THE FIRM WAS RESPONSIBLE FOR ENSURINGTHAT ITS RESERVE BANK ACCOUNTS MAINTAINED SUFFICIENT FUNDS TOSATISFY ITS RESERVE REQUIREMENTS. THE HINDSIGHT DEFICIENCY WASCORRECTED WITHIN EIGHTEEN MINUTES. THE FIRM HAD A SYSTEM TOSUPERVISE THE DELIVERY OF ELIGIBLE COLLATERAL INTO ITS RESERVEBANK ACCOUNTS PRIOR TO 10:00 A.M. THE SUPERVISORY SYSTEM ALSOINCLUDED A REVIEW OF NIGHTLY BATCH RECONCILIATIONS TO CONFIRMTHAT THE BALANCE OF THE ACCOUNTS CONTINUED TO SATISFY ITSRESERVE REQUIREMENTS. HOWEVER, THE FIRM'S SUPERVISORYSYSTEM WAS INADEQUATE TO ENSURE THAT INTRADAY DEBIT ANDCREDIT MOVEMENTS IN THE RESERVE BANK ACCOUNTS AFTER 10:00 A.M.WERE DETECTED AND ELEVATED.THE FIRM COMPLETED RESERVE FORMULA COMPUTATIONS ON FRIDAYSAND MOVED QUALIFIED SECURITIES EITHER INTO OR OUT OF ITSRESERVE BANK ACCOUNTS BY 10:00 A.M. ON TUESDAYS IN ORDER TOMEET INCREASED OR DECREASED RESERVE REQUIREMENTS. ALTHOUGHQUALIFIED SECURITIES WERE MOVED EITHER INTO OR OUT OF THERESERVE BANK ACCOUNTS PRIOR TO 10:00 A.M., THERE WERE ALSOINTRADAY OFFSETTING DEBIT AND CREDIT ENTRIES. BASED ON THEINFORMATION AVAILABLE CONCERNING THE TIMING OF CASHMOVEMENTS INTO AND OUT OF THE RESERVE BANK ACCOUNTS, THESEINTRADAY OFFSETTING DEBIT AND CREDIT ENTRIES MAY HAVE RESULTEDIN WITHDRAWALS OCCURRING AFTER 10:00 A.M. ON 16 DAYS AND FOURHINDSIGHT DEFICIENCIES.











Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE IT IS CENSURED AND FINED $100,000. FINE PAID IN FULL10/15/13.


No




Allegations: THE FIRM HAD AN APPROXIMATELY $400 MILLION HINDSIGHT DEFICIENCYIN ITS RESERVE BANK ACCOUNTS AS A RESULT OF CASH BEINGSUBSTITUTED FOR UNQUALIFIED SECURITIES AFTER 10:00 A.M. THISSUBSTITUTION WAS NOT ATTRIBUTABLE TO THE FIRM. NEVERTHELESS,THE FIRM WAS RESPONSIBLE FOR ENSURING THAT ITS RESERVE BANKACCOUNTS MAINTAINED SUFFICIENT FUNDS TO SATISFY ITS RESERVEREQUIREMENTS. THE HINDSIGHT DEFICIENCY WAS CORRECTED WITHINEIGHTEEN MINUTES. THE FIRM HAD A SYSTEM TO SUPERVISE THEDELIVERY OF ELIGIBLE COLLATERAL INTO ITS RESERVE BANK ACCOUNTSPRIOR TO 10:00 A.M. THE SUPERVISORY SYSTEM ALSO INCLUDED AREVIEW OF NIGHTLY BATCH RECONCILIATIONS TO CONFIRM THAT THEBALANCE OF THE ACCOUNTS CONTINUED TO SATISFY ITS RESERVEREQUIREMENTS. HOWEVER, THE FIRM'S SUPERVISORY SYSTEM WASINADEQUATE TO ENSURE THAT INTRADAY DEBIT AND CREDITMOVEMENTS IN THE RESERVE BANK ACCOUNTS AFTER 10:00 A.M. WEREDETECTED AND ELEVATED. THE FIRM COMPLETED RESERVE FORMULACOMPUTATIONS ON FRIDAYS AND MOVED QUALIFIED SECURITIES EITHERINTO OR OUT OF ITS RESERVE BANK ACCOUNTS BY 10:00 A.M. ONTUESDAYS IN ORDER TO MEET INCREASED OR DECREASED RESERVEREQUIREMENTS. ALTHOUGH QUALIFIED SECURITIES WERE MOVEDEITHER INTO OR OUT OF THE RESERVE BANK ACCOUNTS PRIOR TO 10:00A.M., THERE WERE ALSO INTRADAY OFFSETTING DEBIT AND CREDITENTRIES. BASED ON THE INFORMATION AVAILABLE CONCERNING THETIMING OF CASH MOVEMENTS INTO AND OUT OF THE RESERVE BANKACCOUNTS, THESE INTRADAY OFFSETTING DEBIT AND CREDIT ENTRIESMAY HAVE RESULTED IN WITHDRAWALS OCCURRING AFTER 10:00 A.M. ON16 DAYS AND FOUR HINDSIGHT DEFICIENCIES.







Initiated By: FINRA




CENSURE





THE FIRM HAD AN APPROXIMATELY $400 MILLION HINDSIGHT DEFICIENCYIN ITS RESERVE BANK ACCOUNTS AS A RESULT OF CASH BEINGSUBSTITUTED FOR UNQUALIFIED SECURITIES AFTER 10:00 A.M. THISSUBSTITUTION WAS NOT ATTRIBUTABLE TO THE FIRM. NEVERTHELESS,THE FIRM WAS RESPONSIBLE FOR ENSURING THAT ITS RESERVE BANKACCOUNTS MAINTAINED SUFFICIENT FUNDS TO SATISFY ITS RESERVEREQUIREMENTS. THE HINDSIGHT DEFICIENCY WAS CORRECTED WITHINEIGHTEEN MINUTES. THE FIRM HAD A SYSTEM TO SUPERVISE THEDELIVERY OF ELIGIBLE COLLATERAL INTO ITS RESERVE BANK ACCOUNTSPRIOR TO 10:00 A.M. THE SUPERVISORY SYSTEM ALSO INCLUDED AREVIEW OF NIGHTLY BATCH RECONCILIATIONS TO CONFIRM THAT THEBALANCE OF THE ACCOUNTS CONTINUED TO SATISFY ITS RESERVEREQUIREMENTS. HOWEVER, THE FIRM'S SUPERVISORY SYSTEM WASINADEQUATE TO ENSURE THAT INTRADAY DEBIT AND CREDITMOVEMENTS IN THE RESERVE BANK ACCOUNTS AFTER 10:00 A.M. WEREDETECTED AND ELEVATED. THE FIRM COMPLETED RESERVE FORMULACOMPUTATIONS ON FRIDAYS AND MOVED QUALIFIED SECURITIES EITHERINTO OR OUT OF ITS RESERVE BANK ACCOUNTS BY 10:00 A.M. ONTUESDAYS IN ORDER TO MEET INCREASED OR DECREASED RESERVEREQUIREMENTS. ALTHOUGH QUALIFIED SECURITIES WERE MOVEDEITHER INTO OR OUT OF THE RESERVE BANK ACCOUNTS PRIOR TO 10:00A.M., THERE WERE ALSO INTRADAY OFFSETTING DEBIT AND CREDITENTRIES. BASED ON THE INFORMATION AVAILABLE CONCERNING THETIMING OF CASH MOVEMENTS INTO AND OUT OF THE RESERVE BANKACCOUNTS, THESE INTRADAY OFFSETTING DEBIT AND CREDIT ENTRIESMAY HAVE RESULTED IN WITHDRAWALS OCCURRING AFTER 10:00 A.M. ON16 DAYS AND FOUR HINDSIGHT DEFICIENCIES.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED ANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE IT WAS CENSURED AND FINED $100,000.




i


Allegations: SECURITIES EXCHANGE ACT OF 1934 RULES 10B-10(A), 15A-6, 17A-3(A),17A-4, FINRA RULES 2010, 2232, NASD RULES 2110, 2230, 3010(A), 3010(B),3110(A): THE FIRM FAILED TO DELIVER CERTAIN TRADE CONFIRMATIONSAND ACCOUNT STATEMENTS, AND IN CERTAIN INSTANCES FAILED TODISCLOSE REQUIRED TRANSACTION INFORMATION TO INSTITUTIONALCUSTOMERS WHO EXECUTED TRADES IN NON-US SECURITIES THROUGHFIRM NON-REGISTERED FOREIGN AFFILIATES. THE FIRM DISCOVEREDDURING ROUTINE TESTING THAT IN SOME INSTANCES, IT EITHER FAILEDTO PRODUCE OR SEND PAPER AND ELECTRONIC TRADE CONFIRMATIONSAND ACCOUNTS STATEMENTS, OR SENT SUCH CONFIRMATIONS ANDACCOUNT STATEMENTS WITHOUT CERTAIN REQUIRED DISCLOSURELANGUAGE TO CERTAIN US INSTITUTIONAL CLIENTS. ADDITIONALLY,TRADE CONFIRMATIONS FOR OVER-THE-COUNTER (OTC) EQUITYDERIVATIVE TRANSACTIONS LACKED CERTAIN REQUIRED DISCLOSURELANGUAGE. THE FIRM'S TESTING ALSO REVEALED INSTANCES OF THEAFOREMENTIONED FAILURES AS EARLY AS 2003. IMPROPER CODING OFCERTAIN ACCOUNTS CAUSED THE SYSTEM TO FAIL TO RECOGNIZE THETRANSACTION AS ONE FOR WHICH THE FIRM SHOULD GENERATE ACONFIRMATION. INSTEAD, EITHER THE EXECUTING FIRM FOREIGNAFFILIATE PRODUCED AND SENT THE CONFIRMATION ELECTRONICALLY,OR THE FIRM GENERATED A CONFIRMATION WITHOUT THE REQUIREDDISCLOSURE LANGUAGE, OR NO CONFIRMATION WAS PRODUCED AT ALL.THE FIRM USED FIVE MAIN SYSTEMS TO GENERATE PRODUCT SPECIFICTRADE CONFIRMATIONS AND ACCOUNT STATEMENTS. THE FIRM'SFAILURE TO SEND REQUIRED SECURITIES EXCHANGE ACT OF 1934(EXCHANGE ACT) RULES 10B-10 AND 15A-6 TRADE CONFIRMATIONS ANDACCOUNT STATEMENTS STEMMED FROM MISSING OR INCORRECT DATAOR PROGRAM INDICATORS IN THE FIRM'S MAIN SYSTEMS. SPECIFICALLY,FIRM STAFF FAILED TO CAPTURE AND POPULATE SYSTEM FIELDS WITHCLIENT-SPECIFIC "STATIC DATA" INFORMATION THAT, HAD IT BEENENTERED COMPLETELY AND ACCURATELY, WOULD HAVE TRIGGERED THEGENERATION OF A REQUIRED CONFIRMATION. THE FIRM FAILED TO SENDEXCHANGE ACT RULES 15A-6 AND 10B-10 COMPLIANT PAPER TRADECONFIRMATIONS AND ACCOUNT STATEMENTS FOR EQUITIESTRANSACTIONS, EQUITY DERIVATIVES TRANSACTIONS AND FIXEDINCOME TRANSACTIONS EFFECTED BY CLIENTS IN CLIENT SUB-ACCOUNTS. FOR ALL OF THE EQUITIES TRANSACTIONS AND EQUITYDERIVATIVES TRANSACTIONS, THE CUSTOMERS RECEIVED SOME TYPEOF ELECTRONIC NOTICE OF EXECUTION STATING THE TERMS OF THETRANSACTION. OF THE AFFECTED FIXED INCOME TRANSACTIONS,APPROXIMATELY 49% DID NOT RECEIVE EITHER PAPER OR ELECTRONICTRADE CONFIRMATIONS. FOR THE AFFECTED TRANSACTIONS, TWO FIRMFOREIGN AFFILIATES ELECTRONICALLY PROVIDED TO US INSTITUTIONALCUSTOMERS NOTICES OF EXECUTION STATING CERTAIN TERMS OF THETRANSACTIONS. THOSE CONTEMPORANEOUS NOTICES FOR EACHTRANSACTION, HOWEVER, LACKED 15A-6 LANGUAGE AND 10B-10DISCLOSURES, REGARDING, AMONG OTHER THINGS, EXECUTION TIME,AGENCY/PRINCIPAL CAPACITY, SELLER/BUYER NAME, REMUNERATION,EFFECTS OF REDEMPTION, RATINGS AND YIELD DETAILS. IN ADDITION,THE FIRM, RATHER THAN THE AFFILIATE, SHOULD HAVE ISSUED THETRADE CONFIRMATIONS. THE FIRM WAS REQUIRED TO ISSUE PAPERTRADE CONFIRMATIONS REGARDING EQUITIES AND FIXED INCOMETRANSACTIONS ABSENT AN AGREEMENT WITH THE CUSTOMERS TOACCEPT ELECTRONIC CONFIRMATIONS IN LIEU OF PAPER. THE FIRM ANDITS NON-REGISTERED FOREIGN AFFILIATES DID NOT HAVE SUCH ANAGREEMENT. IN CERTAIN INSTANCES, HOWEVER, EITHER THE FIRM ORITS FOREIGN AFFILIATE ISSUED SOME FORM OF ELECTRONIC TRADECONFIRMATIONS FOR EQUITIES AND FIXED INCOME TRANSACTIONSINSTEAD OF THE REQUIRED PAPER CONFIRMATION, WHICH DID NOTCOMPLY WITH EXCHANGE ACT RULES 10-10 AND 15A-6. THE INCORRECTSTATIC DATA CODING IN THE FIRM'S SYSTEMS ALSO IMPACTED THEGENERATION OF CUSTOMER ACCOUNT STATEMENTS RELATING TO THEFOREIGN AFFILIATE TRANSACTIONS IN NON-US SECURITIES FOR USINSTITUTIONAL CUSTOMERS. [CONTINUED IN COMMENT]







www.finra.org/brokercheck User GuidanceSECURITIES EXCHANGE ACT OF 1934 RULES 10B-10(A), 15A-6, 17A-3(A),17A-4, FINRA RULES 2010, 2232, NASD RULES 2110, 2230, 3010(A), 3010(B),3110(A): THE FIRM FAILED TO DELIVER CERTAIN TRADE CONFIRMATIONSAND ACCOUNT STATEMENTS, AND IN CERTAIN INSTANCES FAILED TODISCLOSE REQUIRED TRANSACTION INFORMATION TO INSTITUTIONALCUSTOMERS WHO EXECUTED TRADES IN NON-US SECURITIES THROUGHFIRM NON-REGISTERED FOREIGN AFFILIATES. THE FIRM DISCOVEREDDURING ROUTINE TESTING THAT IN SOME INSTANCES, IT EITHER FAILEDTO PRODUCE OR SEND PAPER AND ELECTRONIC TRADE CONFIRMATIONSAND ACCOUNTS STATEMENTS, OR SENT SUCH CONFIRMATIONS ANDACCOUNT STATEMENTS WITHOUT CERTAIN REQUIRED DISCLOSURELANGUAGE TO CERTAIN US INSTITUTIONAL CLIENTS. ADDITIONALLY,TRADE CONFIRMATIONS FOR OVER-THE-COUNTER (OTC) EQUITYDERIVATIVE TRANSACTIONS LACKED CERTAIN REQUIRED DISCLOSURELANGUAGE. THE FIRM'S TESTING ALSO REVEALED INSTANCES OF THEAFOREMENTIONED FAILURES AS EARLY AS 2003. IMPROPER CODING OFCERTAIN ACCOUNTS CAUSED THE SYSTEM TO FAIL TO RECOGNIZE THETRANSACTION AS ONE FOR WHICH THE FIRM SHOULD GENERATE ACONFIRMATION. INSTEAD, EITHER THE EXECUTING FIRM FOREIGNAFFILIATE PRODUCED AND SENT THE CONFIRMATION ELECTRONICALLY,OR THE FIRM GENERATED A CONFIRMATION WITHOUT THE REQUIREDDISCLOSURE LANGUAGE, OR NO CONFIRMATION WAS PRODUCED AT ALL.THE FIRM USED FIVE MAIN SYSTEMS TO GENERATE PRODUCT SPECIFICTRADE CONFIRMATIONS AND ACCOUNT STATEMENTS. THE FIRM'SFAILURE TO SEND REQUIRED SECURITIES EXCHANGE ACT OF 1934(EXCHANGE ACT) RULES 10B-10 AND 15A-6 TRADE CONFIRMATIONS ANDACCOUNT STATEMENTS STEMMED FROM MISSING OR INCORRECT DATAOR PROGRAM INDICATORS IN THE FIRM'S MAIN SYSTEMS. SPECIFICALLY,FIRM STAFF FAILED TO CAPTURE AND POPULATE SYSTEM FIELDS WITHCLIENT-SPECIFIC "STATIC DATA" INFORMATION THAT, HAD IT BEENENTERED COMPLETELY AND ACCURATELY, WOULD HAVE TRIGGERED THEGENERATION OF A REQUIRED CONFIRMATION. THE FIRM FAILED TO SENDEXCHANGE ACT RULES 15A-6 AND 10B-10 COMPLIANT PAPER TRADECONFIRMATIONS AND ACCOUNT STATEMENTS FOR EQUITIESTRANSACTIONS, EQUITY DERIVATIVES TRANSACTIONS AND FIXEDINCOME TRANSACTIONS EFFECTED BY CLIENTS IN CLIENT SUB-ACCOUNTS. FOR ALL OF THE EQUITIES TRANSACTIONS AND EQUITYDERIVATIVES TRANSACTIONS, THE CUSTOMERS RECEIVED SOME TYPEOF ELECTRONIC NOTICE OF EXECUTION STATING THE TERMS OF THETRANSACTION. OF THE AFFECTED FIXED INCOME TRANSACTIONS,APPROXIMATELY 49% DID NOT RECEIVE EITHER PAPER OR ELECTRONICTRADE CONFIRMATIONS. FOR THE AFFECTED TRANSACTIONS, TWO FIRMFOREIGN AFFILIATES ELECTRONICALLY PROVIDED TO US INSTITUTIONALCUSTOMERS NOTICES OF EXECUTION STATING CERTAIN TERMS OF THETRANSACTIONS. THOSE CONTEMPORANEOUS NOTICES FOR EACHTRANSACTION, HOWEVER, LACKED 15A-6 LANGUAGE AND 10B-10DISCLOSURES, REGARDING, AMONG OTHER THINGS, EXECUTION TIME,AGENCY/PRINCIPAL CAPACITY, SELLER/BUYER NAME, REMUNERATION,EFFECTS OF REDEMPTION, RATINGS AND YIELD DETAILS. IN ADDITION,THE FIRM, RATHER THAN THE AFFILIATE, SHOULD HAVE ISSUED THETRADE CONFIRMATIONS. THE FIRM WAS REQUIRED TO ISSUE PAPERTRADE CONFIRMATIONS REGARDING EQUITIES AND FIXED INCOMETRANSACTIONS ABSENT AN AGREEMENT WITH THE CUSTOMERS TOACCEPT ELECTRONIC CONFIRMATIONS IN LIEU OF PAPER. THE FIRM ANDITS NON-REGISTERED FOREIGN AFFILIATES DID NOT HAVE SUCH ANAGREEMENT. IN CERTAIN INSTANCES, HOWEVER, EITHER THE FIRM ORITS FOREIGN AFFILIATE ISSUED SOME FORM OF ELECTRONIC TRADECONFIRMATIONS FOR EQUITIES AND FIXED INCOME TRANSACTIONSINSTEAD OF THE REQUIRED PAPER CONFIRMATION, WHICH DID NOTCOMPLY WITH EXCHANGE ACT RULES 10-10 AND 15A-6. THE INCORRECTSTATIC DATA CODING IN THE FIRM'S SYSTEMS ALSO IMPACTED THEGENERATION OF CUSTOMER ACCOUNT STATEMENTS RELATING TO THEFOREIGN AFFILIATE TRANSACTIONS IN NON-US SECURITIES FOR USINSTITUTIONAL CUSTOMERS. [CONTINUED IN COMMENT]






Initiated By: FINRA






Other Product Type(s): FIXED INCOME

SECURITIES EXCHANGE ACT OF 1934 RULES 10B-10(A), 15A-6, 17A-3(A),17A-4, FINRA RULES 2010, 2232, NASD RULES 2110, 2230, 3010(A), 3010(B),3110(A): THE FIRM FAILED TO DELIVER CERTAIN TRADE CONFIRMATIONSAND ACCOUNT STATEMENTS, AND IN CERTAIN INSTANCES FAILED TODISCLOSE REQUIRED TRANSACTION INFORMATION TO INSTITUTIONALCUSTOMERS WHO EXECUTED TRADES IN NON-US SECURITIES THROUGHFIRM NON-REGISTERED FOREIGN AFFILIATES. THE FIRM DISCOVEREDDURING ROUTINE TESTING THAT IN SOME INSTANCES, IT EITHER FAILEDTO PRODUCE OR SEND PAPER AND ELECTRONIC TRADE CONFIRMATIONSAND ACCOUNTS STATEMENTS, OR SENT SUCH CONFIRMATIONS ANDACCOUNT STATEMENTS WITHOUT CERTAIN REQUIRED DISCLOSURELANGUAGE TO CERTAIN US INSTITUTIONAL CLIENTS. ADDITIONALLY,TRADE CONFIRMATIONS FOR OVER-THE-COUNTER (OTC) EQUITYDERIVATIVE TRANSACTIONS LACKED CERTAIN REQUIRED DISCLOSURELANGUAGE. THE FIRM'S TESTING ALSO REVEALED INSTANCES OF THEAFOREMENTIONED FAILURES AS EARLY AS 2003. IMPROPER CODING OFCERTAIN ACCOUNTS CAUSED THE SYSTEM TO FAIL TO RECOGNIZE THETRANSACTION AS ONE FOR WHICH THE FIRM SHOULD GENERATE ACONFIRMATION. INSTEAD, EITHER THE EXECUTING FIRM FOREIGNAFFILIATE PRODUCED AND SENT THE CONFIRMATION ELECTRONICALLY,OR THE FIRM GENERATED A CONFIRMATION WITHOUT THE REQUIREDDISCLOSURE LANGUAGE, OR NO CONFIRMATION WAS PRODUCED AT ALL.THE FIRM USED FIVE MAIN SYSTEMS TO GENERATE PRODUCT SPECIFICTRADE CONFIRMATIONS AND ACCOUNT STATEMENTS. THE FIRM'SFAILURE TO SEND REQUIRED SECURITIES EXCHANGE ACT OF 1934(EXCHANGE ACT) RULES 10B-10 AND 15A-6 TRADE CONFIRMATIONS ANDACCOUNT STATEMENTS STEMMED FROM MISSING OR INCORRECT DATAOR PROGRAM INDICATORS IN THE FIRM'S MAIN SYSTEMS. SPECIFICALLY,FIRM STAFF FAILED TO CAPTURE AND POPULATE SYSTEM FIELDS WITHCLIENT-SPECIFIC "STATIC DATA" INFORMATION THAT, HAD IT BEENENTERED COMPLETELY AND ACCURATELY, WOULD HAVE TRIGGERED THEGENERATION OF A REQUIRED CONFIRMATION. THE FIRM FAILED TO SENDEXCHANGE ACT RULES 15A-6 AND 10B-10 COMPLIANT PAPER TRADECONFIRMATIONS AND ACCOUNT STATEMENTS FOR EQUITIESTRANSACTIONS, EQUITY DERIVATIVES TRANSACTIONS AND FIXEDINCOME TRANSACTIONS EFFECTED BY CLIENTS IN CLIENT SUB-ACCOUNTS. FOR ALL OF THE EQUITIES TRANSACTIONS AND EQUITYDERIVATIVES TRANSACTIONS, THE CUSTOMERS RECEIVED SOME TYPEOF ELECTRONIC NOTICE OF EXECUTION STATING THE TERMS OF THETRANSACTION. OF THE AFFECTED FIXED INCOME TRANSACTIONS,APPROXIMATELY 49% DID NOT RECEIVE EITHER PAPER OR ELECTRONICTRADE CONFIRMATIONS. FOR THE AFFECTED TRANSACTIONS, TWO FIRMFOREIGN AFFILIATES ELECTRONICALLY PROVIDED TO US INSTITUTIONALCUSTOMERS NOTICES OF EXECUTION STATING CERTAIN TERMS OF THETRANSACTIONS. THOSE CONTEMPORANEOUS NOTICES FOR EACHTRANSACTION, HOWEVER, LACKED 15A-6 LANGUAGE AND 10B-10DISCLOSURES, REGARDING, AMONG OTHER THINGS, EXECUTION TIME,AGENCY/PRINCIPAL CAPACITY, SELLER/BUYER NAME, REMUNERATION,EFFECTS OF REDEMPTION, RATINGS AND YIELD DETAILS. IN ADDITION,THE FIRM, RATHER THAN THE AFFILIATE, SHOULD HAVE ISSUED THETRADE CONFIRMATIONS. THE FIRM WAS REQUIRED TO ISSUE PAPERTRADE CONFIRMATIONS REGARDING EQUITIES AND FIXED INCOMETRANSACTIONS ABSENT AN AGREEMENT WITH THE CUSTOMERS TOACCEPT ELECTRONIC CONFIRMATIONS IN LIEU OF PAPER. THE FIRM ANDITS NON-REGISTERED FOREIGN AFFILIATES DID NOT HAVE SUCH ANAGREEMENT. IN CERTAIN INSTANCES, HOWEVER, EITHER THE FIRM ORITS FOREIGN AFFILIATE ISSUED SOME FORM OF ELECTRONIC TRADECONFIRMATIONS FOR EQUITIES AND FIXED INCOME TRANSACTIONSINSTEAD OF THE REQUIRED PAPER CONFIRMATION, WHICH DID NOTCOMPLY WITH EXCHANGE ACT RULES 10-10 AND 15A-6. THE INCORRECTSTATIC DATA CODING IN THE FIRM'S SYSTEMS ALSO IMPACTED THEGENERATION OF CUSTOMER ACCOUNT STATEMENTS RELATING TO THEFOREIGN AFFILIATE TRANSACTIONS IN NON-US SECURITIES FOR USINSTITUTIONAL CUSTOMERS. [CONTINUED IN COMMENT]


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE IT IS CENSURED AND FINED $575,000. FINRAACKNOWLEDGES THAT AS A RESULT OF INTERNAL TESTING, THE FIRMDISCOVERED THE ABOVE DESCRIBED VIOLATIONS, INTERNALLYINVESTIGATED THE CAUSES AND SCOPE OF THE VIOLATIONS, ANDPROACTIVELY TOOK STEPS TO REMEDIATE THE PROBLEMS PRIOR TOSELF-REPORTING THE ISSUES TO FINRA. THE FIRM ALSO SUBSTANTIALLYASSISTED FINRA STAFF DURING ITS INVESTIGATION. ACCORDINGLY, THESANCTIONS REFLECT THE CREDIT THAT THE FIRM HAS RECEIVED FORSELF-REPORTING AND SUBSTANTIALLY ASSISTING FINRA. FINE PAID INFULL 10/21/13.


No








www.finra.org/brokercheck User GuidanceWITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE IT IS CENSURED AND FINED $575,000. FINRAACKNOWLEDGES THAT AS A RESULT OF INTERNAL TESTING, THE FIRMDISCOVERED THE ABOVE DESCRIBED VIOLATIONS, INTERNALLYINVESTIGATED THE CAUSES AND SCOPE OF THE VIOLATIONS, ANDPROACTIVELY TOOK STEPS TO REMEDIATE THE PROBLEMS PRIOR TOSELF-REPORTING THE ISSUES TO FINRA. THE FIRM ALSO SUBSTANTIALLYASSISTED FINRA STAFF DURING ITS INVESTIGATION. ACCORDINGLY, THESANCTIONS REFLECT THE CREDIT THAT THE FIRM HAS RECEIVED FORSELF-REPORTING AND SUBSTANTIALLY ASSISTING FINRA. FINE PAID INFULL 10/21/13.

Regulator Statement [CONTINUED FROM ALLEGATIONS]: THE FIRM FAILED TO DELIVERACCOUNT STATEMENTS IT GENERATED BECAUSE: THE FIRM'S SYSTEM'SWAS MISSING CUSTOMER ADDRESS INFORMATION IN A STATIC DATAFIELD; OR THE STATIC DATA FIELD WAS POPULATED WITH AN INVALIDCUSTOMER ADDRESS. PRIOR TO JULY 2011, THE FIRM DID NOT HAVE ANADEQUATE SUPERVISORY SYSTEM, INCLUDING ROBUST EXCEPTIONREPORTS, TO MONITOR THE EXCHANGE ACT RULE 15A-6 CONFIRMATIONAND ACCOUNT PROCESS. WHILE THE FIRM HAD A PROCESS TO REVIEW ASAMPLE OF CONFIRMATIONS PERIODICALLY, NONE OF THE INCORRECTLYCODED ACCOUNTS WERE PART OF THE SAMPLE REVIEW, THEREFORE,THE STATIC DATA ISSUES WERE NOT TIMELY IDENTIFIED. THOSE SAMPLEREVIEWS WERE ALSO NOT DESIGNED TO DETECT IF A CODE ORINDICATOR NECESSARY FOR GENERATION OF A COMPLIANT 15A-6CONFIRMATION WAS ABSENT. THE FIRM DID NOT RECEIVE ANYCUSTOMER COMPLAINTS THAT TRADE CONFIRMATIONS AND ACCOUNTSTATEMENTS WERE NOT BEING PROVIDED AS REQUIRED. ALTHOUGH THEFIRM HAD A PROCESS TO MONITOR FOR MISSING CUSTOMERADDRESSES, IT DETECTED INCORRECT CUSTOMER ADDRESSESPRIMARILY THROUGH RECEIPT OF RETURNED MAIL. THE FIRM'SINADEQUATE SUPERVISION RESULTED IN A FAILURE TO DELIVEREXCHANGE ACT RULES 10B-10(A) AND 15A-6 COMPLIANT PAPER TRADECONFIRMATIONS AND ACCOUNT STATEMENTS. THIS CONSTITUTEDNEARLY 40% OF CLIENTS' TRADES DURING THAT TIME PERIOD. INADDITION, BECAUSE OF THE FIRM'S FAILURE TO SUPERVISE, ITSINSTITUTIONAL CUSTOMERS DID NOT RECEIVE PAPER OR ELECTRONICCONFIRMATIONS FOR THE AFFECTED TRANSACTIONS. IN JUNE 2011, THEFIRM DISCOVERED THE ABOVE-DESCRIBED VIOLATIONS AND SELF-REPORTED THE MATTER TO FINRA IN JULY 2011. BY AUGUST 2011, THEFIRM HAD BEGUN TO IMPLEMENT RECONCILIATION PROCEDURES ANDREPORTS TO CORRECT THE STATIC DATA FAILURES. MOREOVER, THEFIRM ENHANCED ITS INTERNAL SYSTEMS, CREATED MORE ROBUST DAILYAND MONTHLY EXCEPTION REPORTS, AND REVISED ITS WRITTENPOLICIES AND PROCEDURES TO INCLUDE MORE COMPREHENSIVEPROTOCOLS TO MONITOR TRANSACTIONS IN NON-US SECURITIESEFFECTED THROUGH NON-REGISTERED FOREIGN AFFILIATES ON BEHALFOF US INSTITUTIONAL CUSTOMERS. WITH ROUTINE RECONCILIATIONSAND CONTROLS, THE FIRM NOW VERIFIES THE EFFECTIVENESS OF THEREMEDIATION EFFORTS.






[CONTINUED FROM ALLEGATIONS]: THE FIRM FAILED TO DELIVERACCOUNT STATEMENTS IT GENERATED BECAUSE: THE FIRM'S SYSTEM'SWAS MISSING CUSTOMER ADDRESS INFORMATION IN A STATIC DATAFIELD; OR THE STATIC DATA FIELD WAS POPULATED WITH AN INVALIDCUSTOMER ADDRESS. PRIOR TO JULY 2011, THE FIRM DID NOT HAVE ANADEQUATE SUPERVISORY SYSTEM, INCLUDING ROBUST EXCEPTIONREPORTS, TO MONITOR THE EXCHANGE ACT RULE 15A-6 CONFIRMATIONAND ACCOUNT PROCESS. WHILE THE FIRM HAD A PROCESS TO REVIEW ASAMPLE OF CONFIRMATIONS PERIODICALLY, NONE OF THE INCORRECTLYCODED ACCOUNTS WERE PART OF THE SAMPLE REVIEW, THEREFORE,THE STATIC DATA ISSUES WERE NOT TIMELY IDENTIFIED. THOSE SAMPLEREVIEWS WERE ALSO NOT DESIGNED TO DETECT IF A CODE ORINDICATOR NECESSARY FOR GENERATION OF A COMPLIANT 15A-6CONFIRMATION WAS ABSENT. THE FIRM DID NOT RECEIVE ANYCUSTOMER COMPLAINTS THAT TRADE CONFIRMATIONS AND ACCOUNTSTATEMENTS WERE NOT BEING PROVIDED AS REQUIRED. ALTHOUGH THEFIRM HAD A PROCESS TO MONITOR FOR MISSING CUSTOMERADDRESSES, IT DETECTED INCORRECT CUSTOMER ADDRESSESPRIMARILY THROUGH RECEIPT OF RETURNED MAIL. THE FIRM'SINADEQUATE SUPERVISION RESULTED IN A FAILURE TO DELIVEREXCHANGE ACT RULES 10B-10(A) AND 15A-6 COMPLIANT PAPER TRADECONFIRMATIONS AND ACCOUNT STATEMENTS. THIS CONSTITUTEDNEARLY 40% OF CLIENTS' TRADES DURING THAT TIME PERIOD. INADDITION, BECAUSE OF THE FIRM'S FAILURE TO SUPERVISE, ITSINSTITUTIONAL CUSTOMERS DID NOT RECEIVE PAPER OR ELECTRONICCONFIRMATIONS FOR THE AFFECTED TRANSACTIONS. IN JUNE 2011, THEFIRM DISCOVERED THE ABOVE-DESCRIBED VIOLATIONS AND SELF-REPORTED THE MATTER TO FINRA IN JULY 2011. BY AUGUST 2011, THEFIRM HAD BEGUN TO IMPLEMENT RECONCILIATION PROCEDURES ANDREPORTS TO CORRECT THE STATIC DATA FAILURES. MOREOVER, THEFIRM ENHANCED ITS INTERNAL SYSTEMS, CREATED MORE ROBUST DAILYAND MONTHLY EXCEPTION REPORTS, AND REVISED ITS WRITTENPOLICIES AND PROCEDURES TO INCLUDE MORE COMPREHENSIVEPROTOCOLS TO MONITOR TRANSACTIONS IN NON-US SECURITIESEFFECTED THROUGH NON-REGISTERED FOREIGN AFFILIATES ON BEHALFOF US INSTITUTIONAL CUSTOMERS. WITH ROUTINE RECONCILIATIONSAND CONTROLS, THE FIRM NOW VERIFIES THE EFFECTIVENESS OF THEREMEDIATION EFFORTS.


Initiated By: FINRA







Other Product Type(s): FIXED INCOME

Allegations: FROM 2003 THROUGH JUNE 21, 2011, UBS-S FAILED TO DELIVER CERTAINTRADE CONFIRMATIONS AND ACCOUNT STATEMENTS, AND IN CERTAININSTANCES FAILED TO DISCLOSE REQUIRED TRANSACTION INFORMATIONTO INSTITUTIONAL CUSTOMERS WHO EXECUTED TRADES IN NON-U.S.SECURITIES THROUGH UBS-S' NON-REGISTERED FOREIGN AFFILIATES. INTHE MAJORITY OF THESE INSTANCES THE FIRM'S INSTITUTIONALCUSTOMERS RECEIVED SOME TYPE OF ELECTRONIC NOTICE OFEXECUTION SETTING FORTH THE TERMS OF TRANSACTIONS. THEELECTRONIC NOTICES, HOWEVER, LACKED CERTAIN REQUIREDTRANSACTION DISCLOSURE LANGUAGE. ADDITIONALLY THE TRADECONFIRMATIONS FOR OVER-THE-COUNTER EQUITY DERIVATIVETRANSACTIONS LACKED CERTAIN REQUIRED DISCLOSURE LANGUAGE.THE VIOLATIONS STEMMED FROM THE FIRM'S FAILURE TO HAVEADEQUATE PROCEDURES TO SUPERVISE AND MONITOR THE SYSTEMSRELATED TO DELIVERY OF THE TRADE CONFIRMATIONS AND ACCOUNTSTATEMENTS. IN ADDITION, THE VIOLATIONS RESULTED IN THE FIRM'SFAILURE TO MAKE AND RETAIN CERTAIN REQUIRED BOOKS ANDRECORDS. AS A RESULT, THE FIRM'S CONDUCT VIOLATED SECTION 10,15(A), AND 17(A) OF THE SECURITIES EXCHANGE ACT OF 1934, RULES1B010(A), 15A-6, 17A-3 AND 17A-4 PROMULGATED THEREUNDER, NASDRULES 2230, 3010 AND 2100 AND FINRA RULES 2232 AND 2010.



Resolution:










Sanction Details: CENSURE AND MONETARY FINE OF $575,000.00

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE IT IS CENSURED AND FINED $575,000.FINRA ACKNOWLEDGES THAT AS A RESULT OF INTERNAL TESTING, THEFIRM DISCOVERED THE ABOVE DESCRIBED VIOLATIONS, INTERNALLYINVESTIGATED THE CAUSES AND SCOPE OF THEVIOLATIONS, AND PROACTIVELY TOOK STEPS TO REMEDIATE THEPROBLEMS PRIOR TO SELFREPORTING THE ISSUES TO FINRA. THE FIRMALSO SUBSTANTIALLY ASSISTED FINRA STAFF DURING ITSINVESTIGATION. ACCORDINGLY, THE SANCTIONS REFLECT THE CREDITTHAT THE FIRM HAS RECEIVED FOR SELF-REPORTING ANDSUBSTANTIALLY ASSISTING FINRA.



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Initiated By: MINNEAPOLIS GRAIN EXCHANGE (MGEX)





Docket/Case Number: 13-I-11



Allegations: THE MGEX ALLEGED THAT UBS SECURITIES LLC VIOLATED MGEX RULE718.01 ON TWO OCCASIONS. ONCE ON FEBRUARY 27, 2013 AND AGAIN ONAPRIL 29, 2013.



Resolution:



Settled






Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS OF THE MGEX UBSSECURITIES LLC PAID THE FINE OF $3500.00 ON 08/06/2013.


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Allegations: SEC ADMIN RELEASES 33-9438, 34-70121, IA RELEASE 40-3643, AUGUST 6,2013:

THE SECURITIES AND EXCHANGE COMMISSION ("COMMISSION") DEEMS ITAPPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLICADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, ANDHEREBY ARE, INSTITUTED PURSUANT TO SECTION 8A OF THE SECURITIESACT OF 1933 ("SECURITIES ACT"), SECTION 15(B)(4) OF THE SECURITIESEXCHANGE ACT OF 1934 ("EXCHANGE ACT"), AND SECTIONS 203(E) AND203(K) OF THE INVESTMENT ADVISERS ACT OF 1940 ("ADVISERS ACT")AGAINST UBS SECURITIES LLC ("RESPONDENT" OR "UBS").

UBS VIOLATED CERTAIN PROVISIONS OF THE FEDERAL SECURITIES LAWSIN CONNECTION WITH THE STRUCTURING AND MARKETING OF A LARGELYSYNTHETIC COLLATERALIZED DEBT OBLIGATION ("CDO"). UBSSTRUCTURED THE CDO, AND MARKETED IT TOGETHER WITH THE CDO'SCOLLATERAL MANAGER. THE CDO'S COLLATERAL CONSISTED LARGELYOF CREDIT DEFAULT SWAPS ("CDS") REFERENCING SUBPRIMERESIDENTIAL MORTGAGE-BACKED SECURITIES ("RMBS").

THE COLLATERAL MANAGER WAS RESPONSIBLE FOR DETERMINING THEPRICE THAT THE CDO PAID FOR COLLATERAL. IN THE CASE OF CDSCOLLATERAL, THE PRICE WAS THE AMOUNT THE CDO WAS PAID FORSELLING PROTECTION ON THE UNDERLYING ASSET. THE COLLATERALMANAGER TYPICALLY WOULD SELECT COLLATERAL FOR THIS TYPE OFCDO BY SENDING OUT TO THE STREET BWIC ("BIDS WANTED INCOMPETITION") LISTS SOLICITING BIDS FOR CDS ON PARTICULAR SINGLE-NAME RMBS. THE WINNERS OF THE BWIC PROCESS WOULD BE THOSECOUNTERPARTIES WHO OFFERED TO PAY THE HIGHEST PREMIUMS ONTHE CDS.

FOR THE CDO, HOWEVER, THE BIDDING ON A NUMBER OF BWICS WASBIFURCATED: UBSAND THE COLLATERAL MANAGER AGREED THAT, IN CERTAIN BWICS, THECOLLATERAL MANAGER WOULD INSTRUCT PROSPECTIVE BIDDERS TOBID IN TWO PARTS. THE FIRST PART WAS A SPECIFIED RUNNING SPREAD:FOR EXAMPLE, IN THE FIRST BWIC, THE COLLATERAL MANAGER TOLDPROSPECTIVE BIDDERS THAT THEY WOULD NEED TO PAY A RUNNINGSPREAD OF 300 BASIS POINTS. THE SPREAD WAS NONNEGOTIABLE.INSTEAD, THE COMPETITION WAS OVER THE SECOND PART, CALLED "UPFRONT POINTS." THE COLLATERAL MANAGER SOLICITED THEUPFRONT POINTS AS ONE-TIME CASH PAYMENTS TO BE MADE BY THEBIDDERS TO UBS WHEN THE CDS WERE TRADED. THUS, THE WINNERS OFTHE BWIC WERE THOSE WHO, IN ADDITION TO AGREEING TO PAY THESPECIFIED BASE PREMIUM, BID THE HIGHEST NUMBER OF UPFRONTPOINTS.

BY THE TIME THE CDO WAS LAUNCHED, THE BWICS HAD RESULTED INAPPROXIMATELY $23.6 MILLION IN UPFRONT POINTS. HOWEVER, THOSEUPFRONT POINTS WERE RETAINED BY UBS AND NOT CONTRIBUTED TOTHE CDO. THE MARKETING MATERIALS FOR THE CDO DID NOT DISCLOSEUBS'S RETENTION OF THE $23.6 MILLION IN UPFRONT POINTS. THEMATERIALS FURTHER REPRESENTED THAT THE CDO HAD TO ACQUIREALL COLLATERAL "ON AN 'ARM'S-LENGTH BASIS' FOR FAIR MARKETVALUE," OR AT THE PRICE THE COLLATERAL WAS ACQUIRED BY UBS. THISREPRESENTATION WAS INACCURATE BECAUSE THE CDO DID NOTRECEIVE THE $23.6 MILLION IN UPFRONT POINTS RETAINED BY UBS. UBSEMPLOYEES REFERRED TO THE UPFRONT POINTS INTERNALLY AS ANEXTRA "FEE" ON TOP OF UBS'S DISCLOSED FEE OF APPROXIMATELY $10.8MILLION. ADDITIONALLY, UBS NEGLIGENTLY CAUSED VIOLATIONS OF THESECURITIES LAWS BY THE COLLATERAL MANAGER, WHICH HAD AFIDUCIARY DUTY AS AN INVESTMENT ADVISER TO THE CDO.

UBS WILLFULLY VIOLATED SECTIONS 17(A)(2) AND 17(A)(3) OF THESECURITIES ACT AND NEGLIGENTLY CAUSED VIOLATIONS OF SECTION206(2) OF THE ADVISERS ACT.









Cease and Desist




Principal Product Type: Debt - Asset Backed


SEC ADMIN RELEASES 33-9438, 34-70121, IA RELEASE 40-3643, AUGUST 6,2013:

THE SECURITIES AND EXCHANGE COMMISSION ("COMMISSION") DEEMS ITAPPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLICADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, ANDHEREBY ARE, INSTITUTED PURSUANT TO SECTION 8A OF THE SECURITIESACT OF 1933 ("SECURITIES ACT"), SECTION 15(B)(4) OF THE SECURITIESEXCHANGE ACT OF 1934 ("EXCHANGE ACT"), AND SECTIONS 203(E) AND203(K) OF THE INVESTMENT ADVISERS ACT OF 1940 ("ADVISERS ACT")AGAINST UBS SECURITIES LLC ("RESPONDENT" OR "UBS").

UBS VIOLATED CERTAIN PROVISIONS OF THE FEDERAL SECURITIES LAWSIN CONNECTION WITH THE STRUCTURING AND MARKETING OF A LARGELYSYNTHETIC COLLATERALIZED DEBT OBLIGATION ("CDO"). UBSSTRUCTURED THE CDO, AND MARKETED IT TOGETHER WITH THE CDO'SCOLLATERAL MANAGER. THE CDO'S COLLATERAL CONSISTED LARGELYOF CREDIT DEFAULT SWAPS ("CDS") REFERENCING SUBPRIMERESIDENTIAL MORTGAGE-BACKED SECURITIES ("RMBS").

THE COLLATERAL MANAGER WAS RESPONSIBLE FOR DETERMINING THEPRICE THAT THE CDO PAID FOR COLLATERAL. IN THE CASE OF CDSCOLLATERAL, THE PRICE WAS THE AMOUNT THE CDO WAS PAID FORSELLING PROTECTION ON THE UNDERLYING ASSET. THE COLLATERALMANAGER TYPICALLY WOULD SELECT COLLATERAL FOR THIS TYPE OFCDO BY SENDING OUT TO THE STREET BWIC ("BIDS WANTED INCOMPETITION") LISTS SOLICITING BIDS FOR CDS ON PARTICULAR SINGLE-NAME RMBS. THE WINNERS OF THE BWIC PROCESS WOULD BE THOSECOUNTERPARTIES WHO OFFERED TO PAY THE HIGHEST PREMIUMS ONTHE CDS.

FOR THE CDO, HOWEVER, THE BIDDING ON A NUMBER OF BWICS WASBIFURCATED: UBSAND THE COLLATERAL MANAGER AGREED THAT, IN CERTAIN BWICS, THECOLLATERAL MANAGER WOULD INSTRUCT PROSPECTIVE BIDDERS TOBID IN TWO PARTS. THE FIRST PART WAS A SPECIFIED RUNNING SPREAD:FOR EXAMPLE, IN THE FIRST BWIC, THE COLLATERAL MANAGER TOLDPROSPECTIVE BIDDERS THAT THEY WOULD NEED TO PAY A RUNNINGSPREAD OF 300 BASIS POINTS. THE SPREAD WAS NONNEGOTIABLE.INSTEAD, THE COMPETITION WAS OVER THE SECOND PART, CALLED "UPFRONT POINTS." THE COLLATERAL MANAGER SOLICITED THEUPFRONT POINTS AS ONE-TIME CASH PAYMENTS TO BE MADE BY THEBIDDERS TO UBS WHEN THE CDS WERE TRADED. THUS, THE WINNERS OFTHE BWIC WERE THOSE WHO, IN ADDITION TO AGREEING TO PAY THESPECIFIED BASE PREMIUM, BID THE HIGHEST NUMBER OF UPFRONTPOINTS.

BY THE TIME THE CDO WAS LAUNCHED, THE BWICS HAD RESULTED INAPPROXIMATELY $23.6 MILLION IN UPFRONT POINTS. HOWEVER, THOSEUPFRONT POINTS WERE RETAINED BY UBS AND NOT CONTRIBUTED TOTHE CDO. THE MARKETING MATERIALS FOR THE CDO DID NOT DISCLOSEUBS'S RETENTION OF THE $23.6 MILLION IN UPFRONT POINTS. THEMATERIALS FURTHER REPRESENTED THAT THE CDO HAD TO ACQUIREALL COLLATERAL "ON AN 'ARM'S-LENGTH BASIS' FOR FAIR MARKETVALUE," OR AT THE PRICE THE COLLATERAL WAS ACQUIRED BY UBS. THISREPRESENTATION WAS INACCURATE BECAUSE THE CDO DID NOTRECEIVE THE $23.6 MILLION IN UPFRONT POINTS RETAINED BY UBS. UBSEMPLOYEES REFERRED TO THE UPFRONT POINTS INTERNALLY AS ANEXTRA "FEE" ON TOP OF UBS'S DISCLOSED FEE OF APPROXIMATELY $10.8MILLION. ADDITIONALLY, UBS NEGLIGENTLY CAUSED VIOLATIONS OF THESECURITIES LAWS BY THE COLLATERAL MANAGER, WHICH HAD AFIDUCIARY DUTY AS AN INVESTMENT ADVISER TO THE CDO.



Resolution:


Yes

Order







Sanction Details: RESPONDENT HAS SUBMITTED AN OFFER OF SETTLEMENT (THE "OFFER")WHICH THE COMMISSION HAS DETERMINED TO ACCEPT. SOLELY FOR THEPURPOSE OF THESE PROCEEDINGS AND ANY OTHER PROCEEDINGSBROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TO WHICH THECOMMISSION IS A PARTY, AND WITHOUT ADMITTING OR DENYING THEFINDINGS HEREIN, EXCEPT AS TO THE COMMISSION'S JURISDICTIONOVER IT AND THE SUBJECT MATTER OF THESE PROCEEDINGS, WHICHARE ADMITTED, RESPONDENT CONSENTS TO THE ENTRY OF THIS ORDERINSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGSPURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933, SECTION15(B)(4) OF THE EXCHANGE ACT, AND SECTIONS 203(E) AND 203(K) OF THEINVESTMENT ADVISERS ACT OF 1940, MAKING FINDINGS, AND IMPOSINGREMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER ("ORDER"), ASSET FORTH BELOW.


IT IS ORDERED THAT UBS CEASE AND DESIST FROM COMMITTING ORCAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS17(A)(2) AND 17(A)(3) OF THE SECURITIES ACT AND SECTION 206(2) OF THEADVISERS ACT.

UBS IS CENSURED.

UBS SHALL, WITHIN 30 DAYS OF THE ENTRY OF THIS ORDER, PAYDISGORGEMENT OF $34,408,185, PREJUDGMENT INTEREST OF$9,719,002.24, AND A CIVIL MONEY PENALTY OF $5,655,000 TO THE UNITEDSTATES TREASURY. IF TIMELY PAYMENT IS NOT MADE, ADDITIONALINTEREST SHALL ACCRUE PURSUANT TO SEC RULE OF PRACTICE 600AND TO 31 U.S.C. § 3717.


Yes










Cease and Desist


CENSUREDISGORGEMENT



Principal Product Type: Debt - Asset Backed


Allegations: ON AUGUST 6, 2013 THE SECURITIES AND EXCHANGE COMMISSIONINSTITUTED A SETTLED ADMINISTRATIVE AND CEASE-AND-DESISTPROCEEDING PURSUANT TO SECTION 8A OF THE SECURITIES ACT OF1933, SECTION 15(B)(4) OF THE SECURITIES EXCHANGE ACT OF 1934, ANDSECTIONS 203(E) AND 203(K) OF THE INVESTMENT ADVISERS ACT OF 1940AGAINST UBS SECURITIES LLC ("UBS"). THE PROCEEDING ARISES OUT OFUBS'S RETENTION OF $23.6 MILLION IN UPFRONT PAYMENTS RECEIVED INCONNECTION WITH CREDIT DEFAULT SWAPS REFERENCING RESIDENTIALMORTGAGE-BACKED SECURITIES THAT SERVED AS COLLATERAL FOR ACOLLATERALIZED DEBT OBLIGATION, ACA 2007-2, STRUCTURED BY UBS IN2007. THE SEC FOUND THAT THE OFFERING DOCUMENTS FOR ACA 2007-2DID NOT DISCLOSE UBS'S RETENTION OF UPFRONT PAYMENTS ANDINACCURATELY REPRESENTED THAT THE CDO HAD TO ACQUIRE ALLCOLLATERAL "ON AN 'ARM'S-LENGTH BASIS' FOR FAIR MARKET VALUE," ORAT THE PRICE THE COLLATERAL WAS ACQUIRED BY UBS. AS A RESULT,THE SEC FOUND THAT UBS WILLFULLY VIOLATED SECTIONS 17(A)(2) AND17(A)(3) OF THE SECURITIES ACT AND NEGLIGENTLY CAUSED VIOLATIONSOF SECTION 206(2) OF THE ADVISERS ACT.



Resolution:

Other Sanctions Ordered: DISGORGEMENT OF $34,408,185.00PREJUDGEMENT INTEREST OF $9,719,002.24


Order






Other Sanctions Ordered: DISGORGEMENT OF $34,408,185.00PREJUDGEMENT INTEREST OF $9,719,002.24

Sanction Details: . UBS SUBMITTED AN OFFER OF SETTLEMENT, WHICH THE SECACCEPTED. UBS NEITHER ADMITTED NOR DENIED THE SEC'S FINDINGS,EXCEPT WITH RESPECT TO THE SEC'S JURISDICTION OVER UBS AND THESUBJECT MATTER OF ITS PROCEEDINGS. UBS CONSENTED TO THEENTRY OF AN ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTION 8A OF THE SECURITIESACT, SECTION 15(B)(4) OF THE EXCHANGE ACT, AND SECTIONS 203(E) AND203 (K) OF THE ADVISERS ACT, MAKING FINDINGS, AND IMPOSINGREMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER. UBS AGREEDTO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONSAND ANY FUTURE VIOLATIONS OF SECTIONS 17(A) (2) AND 17(A)(3) OF THESECURITIES ACT AND SECTION 206(2) OF THE ADVISERS ACT. UBS ALSOAGREED TO BE CENSURED AND TO PAY DISGORGEMENT OF $34,408,185,PREJUDGMENT INTEREST OF $9,719,002.24, AND A CIVIL MONEY PENALTYOF $5,655,000 TO THE UNITED STATES TREASURY.


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Initiated By: NASDAQ OMX BX, INC.







Allegations: BOX TRADING RULES CHAPTER III, SECTION 2(A)(I), CHAPTER VI, SECTION6(D): THE FIRM FAILED TO ADEQUATELY PARTICIPATE IN THE EXCHANGE'SPRE-OPENING PHASE, IN THAT THE FIRM QUOTED LESS THAN 60% OF THESERIES IN GREATER THAN 10% OR MORE OF ITS ASSIGNED PRODUCTSON 72 OUT OF 252 TOTAL TRADES. THE FIRM FAILED TO ESTABLISH ANDMAINTAIN AN ADEQUATE SYSTEM OF SUPERVISION THAT EFFECTIVELYMONITORED COMPLIANCE WITH EXCHANGE RULES RELATING TO MARKETMAKER QUOTING OBLIGATIONS AT THE OPENING.










Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE IT IS CENSURED AND FINED $20,000.


No







CENSURE





Allegations: THE NASDAQ OMX BX ALLEGED THAT THE FIRM FAILED TO ADEQUATELYPARTICIPATE IN THE EXCHANGE'S PRE-OPENING PHASE, IN THAT THEFIRM QUOTED LESS THAN 60% OF THE SERIES IN GREATER THAN 10% ORMORE OF ITS ASSIGNED PRODUCTS ON 72 OUT OF 252 TOTAL TRADES. ITALSO ALLEGED THAT THE FIRM FAILED TO ESTABLISH AND MAINTAIN ANADEQUATE SYSTEM OF SUPERVISION THAT EFFECTIVELY MONITOREDCOMPLIANCE WITH EXCHANGE RULES RELATING TO MARKET MAKERQUOTING OBLIGATIONS AT THE OPENING.



Resolution:









Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE IT WAS CENSURED AND FINED $20,000.



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Docket/Case Number: ENFORCEMENT NO. 2013-04



Allegations: THE NASDAQ OMX PHLX, INC. HAS FOUND UBS SECURITIES LLC, THE FIRMHAS FAILED TO COMPLY WITH EXCHANGE RULE 1014(B)(II)(D) IN THAT THEFIRM FAILED TO MEET CERTAIN MARKET MAKING REQUIREMENTS ON THEPHLX. ACCORDING TO NASDAQ OMX PHLX, INC. FINDINGS, THE FIRM,ACTING AS A REMOTE STREAMING QUOTE TRADER VIOLATED EXCHANGERULE 1014(B)(II)(D)(1), IN THAT IT INADVERTENTLY FAILED TO QUOTECONTINOUSLY, TWO-SIDED MARKETS IN MULTIPLE OPTIONS, THEREBYRESULTING IN 796 INSTANCES WHERE IT DID NOT ADEQUATELY QUOTE INAT LEAST 60% OF THE SERIES IN THOSE OPTIONS. UBS SECURITIES LLCENTERED INTO AN OFFER OF SETTLEMENT WHICH NASDAQ OMX PHLX,INC. ACCEPTED ON JUNE 7, 2013.



Resolution:


Sanction Details: UBS SECURITIES LLC, WITHOUT ADMITTING OR DENYING THEALLEGATIONS OR CONCLUSIONS IN THE STATEMENT OF CHARGESCONSENTS TO THE CONCLUSIONS OF VIOLATIONS OF CERTAINEXCHANGE RULES AND WILL PAY THE FINE OF $10,000.


Settled






Sanction Details: UBS SECURITIES LLC, WITHOUT ADMITTING OR DENYING THEALLEGATIONS OR CONCLUSIONS IN THE STATEMENT OF CHARGESCONSENTS TO THE CONCLUSIONS OF VIOLATIONS OF CERTAINEXCHANGE RULES AND WILL PAY THE FINE OF $10,000.


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Initiated By: NYSE LIFFE





Docket/Case Number: 2011-TP107/2012-TP-101



Allegations: NYLUS MARKET REGULATION DEPARTMENT ALLEGED THAT ON JULY 7,2011, UBS SECURITIES LLC REPORTED A 200 LOT SEPTEMBER 2011 TENYEAR TREASURY FUTURES EFRP TRANSACTION TO THE EXCHANGEWHEN IN FACT NO EFRP HAD OCCURRED IN VIOLATION OF RULE 422; ANDON AUGUST 8, 2011, UBS SECURITIES LLC SUBMITTED A DUPLICATEREPORT OF THE SAME 344 LOT SEPTEMBER 2011 TEN YEAR TREASURYFUTURES EFRP THAT HAD BEEN PREVIOUSLY REPORTED TO THEEXCHANGE ON AUGUST 4, 2011, IN VIOLATION OF RULES 422 AND 501.



Resolution:


Sanction Details: PURSUANT TO RULES 715(A)(IV) AND 715(B), UBS SECURITIES LLCCONSENTED TO THE IMPOSITION OF A $10,000 FINE.




i


Allegations: SECTION 12(J) OF THE SECURITIES EXCHANGE ACT OF 1934, FINRA RULES2010, 6730(A), 7230A(D)(4), 7450(A), NASD RULES 2110, 3340 - UBSSECURITIES LLC EFFECTED TRANSACTIONS IN SECURITIES WHILE ATRADING HALT WAS IN EFFECT WITH RESPECT TO EACH OF THESECURITIES. THE FIRM EFFECTED TRANSACTIONS IN SECURITIES WHILETHE SECURITIES' REGISTRATIONS WERE SUSPENDED OR REVOKED. THEFIRM FAILED TO REPORT TO THE FINRA TRADE REPORTING FACILITY THECORRECT EXECUTION TIME FOR TRANSACTIONS IN REPORTABLESECURITIES. THE FIRM FAILED TO REPORT TO THE TRADE REPORTINGAND COMPLIANCE ENGINE (TRACE) S1 TRANSACTIONS IN TRACE-ELIGIBLE CORPORATE DEBT SECURITIES AND TRACE-ELIGIBLE AGENCYDEBT SECURITIES WITHIN 15 MINUTES OF EXECUTION TIME. THISCONDUCT CONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OF FINRARULE 6730(A) AND A PATTERN OR PRACTICE OF LATE REPORTINGWITHOUT EXCEPTIONAL CIRCUMSTANCES IN VIOLATION OF FINRA RULE2010. THE FIRM TRANSMITTED TO THE ORDER AUDIT TRAIL SYSTEM(OATS) REPORTABLE ORDER EVENTS (ROES) THAT WERE REJECTED BYOATS FOR CONTEXT OR SYNTAX ERRORS AND WERE REPAIRABLE BUTTHE FIRM FAILED TO REPORT MORE THAN HALF OF THE REJECTEDREPAIRABLE ROES SO THAT IT FAILED TO TRANSMIT THEM TO OATSDURING THIS TIME PERIOD.







Initiated By: FINRA






Other Product Type(s): UNSPECIFIED SECURITIES, REPORTABLE SECURITIES, TRACE-ELIGIBLEAGENCY DEBT SECURITIES, TRACE-ELIGIBLE CORPORATE DEBTSECURITIES.

Allegations: SECTION 12(J) OF THE SECURITIES EXCHANGE ACT OF 1934, FINRA RULES2010, 6730(A), 7230A(D)(4), 7450(A), NASD RULES 2110, 3340 - UBSSECURITIES LLC EFFECTED TRANSACTIONS IN SECURITIES WHILE ATRADING HALT WAS IN EFFECT WITH RESPECT TO EACH OF THESECURITIES. THE FIRM EFFECTED TRANSACTIONS IN SECURITIES WHILETHE SECURITIES' REGISTRATIONS WERE SUSPENDED OR REVOKED. THEFIRM FAILED TO REPORT TO THE FINRA TRADE REPORTING FACILITY THECORRECT EXECUTION TIME FOR TRANSACTIONS IN REPORTABLESECURITIES. THE FIRM FAILED TO REPORT TO THE TRADE REPORTINGAND COMPLIANCE ENGINE (TRACE) S1 TRANSACTIONS IN TRACE-ELIGIBLE CORPORATE DEBT SECURITIES AND TRACE-ELIGIBLE AGENCYDEBT SECURITIES WITHIN 15 MINUTES OF EXECUTION TIME. THISCONDUCT CONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OF FINRARULE 6730(A) AND A PATTERN OR PRACTICE OF LATE REPORTINGWITHOUT EXCEPTIONAL CIRCUMSTANCES IN VIOLATION OF FINRA RULE2010. THE FIRM TRANSMITTED TO THE ORDER AUDIT TRAIL SYSTEM(OATS) REPORTABLE ORDER EVENTS (ROES) THAT WERE REJECTED BYOATS FOR CONTEXT OR SYNTAX ERRORS AND WERE REPAIRABLE BUTTHE FIRM FAILED TO REPORT MORE THAN HALF OF THE REJECTEDREPAIRABLE ROES SO THAT IT FAILED TO TRANSMIT THEM TO OATSDURING THIS TIME PERIOD.


Resolution:


No









Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $87,500. FINE PAID INFULL 3/5/13.



Initiated By: FINRA




Other Product Type(s): UNSPECIFIED SECURITIES, REPORTABLE SECURITIES, TRACE-ELIGIBLEAGENCY DEBT SECURITIES, TRACE-ELIGIBLE CORPORATE DEBTSECURITIES.

Allegations: FINRA ALLEGED THAT UBS SECURITIES LLC VIOLATED SECTION 12(J) OFTHE SECURITIES EXCHANGE ACT OF 1934, FINRA RULES 2010, 6730(A),7230A(D)(4), 7450(A), NASD RULES 2110, 3340.THE ALLEGATIONS STATEDTHAT UBS SECURITIES LLC EFFECTED TRANSACTIONS IN SECURITIESWHILE A TRADING HALT WAS IN EFFECT WITH RESPECT TO EACH OF THESECURITIES. THE FIRM EFFECTED TRANSACTIONS IN SECURITIES WHILETHE SECURITIES' REGISTRATIONS WERE SUSPENDED OR REVOKED. THEFIRM FAILED TO REPORT TO THE FINRA TRADE REPORTING FACILITY THECORRECT EXECUTION TIME FOR TRANSACTIONS IN REPORTABLESECURITIES. THE FIRM FAILED TO REPORT TO THE TRADE REPORTINGAND COMPLIANCE ENGINE (TRACE) S1 TRANSACTIONS IN TRACEELIGIBLECORPORATE DEBT SECURITIES AND TRACE-ELIGIBLE AGENCY DEBTSECURITIES WITHIN 15 MINUTES OF EXECUTIONTIME. THIS CONDUCT CONSTITUTES SEPARATE AND DISTINCT VIOLATIONSOF FINRA RULE 6730(A) AND A PATTERN OR PRACTICE OF LATEREPORTING WITHOUT EXCEPTIONAL CIRCUMSTANCES IN VIOLATION OFFINRA RULE 2010. THE FIRM TRANSMITTED TO THE ORDER AUDIT TRAILSYSTEM (OATS) REPORTABLE ORDER EVENTS (ROES) THAT WEREREJECTED BY OATS FOR CONTEXT OR SYNTAX ERRORS AND WEREREPAIRABLE BUT THE FIRM FAILED TO REPORTMORE THAN HALF OF THE REJECTED REPAIRABLE ROES SO THAT ITFAILED TO TRANSMIT THEM TO OATS DURING THIS TIME PERIOD.











CENSURE


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS.CENSURE AND FINE OF $87,500.




i










Allegations: THE CME GROUP MARKET REGULATION DEPARTMENT DETERMINED THATUBS SECURITIES LLC HAD AN UNACCEPTABLE DATA ENTRY ERROR RATEBETWEEN 9/17/2012 AND 10/19/2012.



Resolution:


Sanction Details: $5,000.00 FINE


Decision








i


Allegations: SEC RULE 10B-10, SEC RULES 605, 611(A)(1) OF REGULATION NMS, FINRARULES 2010, 2265, 7450, NASD RULE 3010 - UBS SECURITIES, LLC WHEN ITACTED AS PRINCIPAL FOR ITS OWN ACCOUNT, FAILED TO PROVIDEWRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMERS THAT IT WAS AMARKET MAKER IN EACH SUCH SECURITY. THE FIRM TRANSMITTEDREPORTS TO THE ORDER AUDIT TRAIL SYSTEM (OATS) THAT CONTAINEDINACCURATE "NOT-HELD" AND "DIRECTED" SPECIAL HANDLING CODES.THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH SEC RULE611(A)(1) OF REGULATION NMS, INCLUDING THE FIRM'S USE OF RULE611(B) EXCEPTIONS, COMPLIANCE WITH THE SELF-HELP EXCEPTION,DOCUMENTATION OF THE EXTERNALLY OBSERVABLE CIRCUMSTANCESUPON WHICH THE PRICE IS BASED FOR INTRADAY BENCHMARK VOLUMEWEIGHTED AVERAGE PRICE (VWAP) TRADES WITH AN OVER/UNDERPROVISION, AND DOCUMENTATION THAT THE FEE-PASS MEETS THEREQUIREMENTS SET BY THE SEC FOR AMERICAN DEPOSITORY RECEIPT(ADR) CONVERSIONS THAT INCLUDE A CONVERSION FEE THAT IS PASSEDTO THE CUSTOMER. THE FIRM'S SUPERVISORY SYSTEM DID NOTPROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH CERTAIN APPLICABLE SECURITIES LAWS,REGULATIONS AND/OR FINRA AND SEC RULES ADDRESSING TRADING ANDMARKET MAKING TOPICS. THE FIRM'S WRITTEN SUPERVISORYPROCEDURES (WSPS) FAILED TO PROVIDE FOR MINIMAL REQUIREMENTSFOR ADEQUATE WSPS IN DESIGNATION OF PRINCIPALS IN EACH OFFICEOF SUPERVISORY JURISDICTION (OSJ); ORDER HANDLING (LIMIT ORDERDISPLAY, QUOTE DISSEMINATION, MARKET ORDER PROTECTION; TRADEREPORTING (MODIFIERS, NASDAQ ORDER ENTRY, THIRD PARTYREPORTING; TRADING HALTS (ALTERNATE TRADING SYSTEM (ATS), BATS,ORDER ENTRY, NASDAQ ORDER ENTRY); NASDAQ PREVENTION OFORDER ENTRY/CLEARLY ERRONEOUS; NASDAQ ORDER IDENTIFICATION;INFORMATION BARRIERS; BOOKS AND RECORDS; AND ATS TRADEREPORTING. THE FIRM FAILED TO PROVIDE DOCUMENTARY EVIDENCETHAT ON THE TRADE DATES REVIEWED, IT PERFORMED THESUPERVISORY REVIEWS SET FORTH IN ITS WSPS CONCERNING ORDERHANDLING (SEC RULE 606, MARKET ORDER PROTECTION, SEC RULE 605);ANTI-INTIMIDATION OR COORDINATION; FIRM QUOTE, MULTIPLE MPIDS;ATS-R FILING. THE FIRM FAILED TO PROVIDE WRITTEN NOTIFICATIONDISCLOSING TO ITS CUSTOMERS ITS CORRECT CAPACITY INTRANSACTIONS. THE FIRM ACCEPTED ORDERS FROM CUSTOMERS FOREXECUTION IN THE PRE-MARKET SESSION OR POST-MARKET SESSIONWITHOUT DISCLOSING TO SUCH CUSTOMERS THAT EXTENDED HOURSTRADING INVOLVES MATERIAL TRADING RISKS, INCLUDING THEPOSSIBILITY OF LOWER LIQUIDITY, HIGH VOLATILITY, CHANGING PRICES,UNLINKED MARKETS, AN EXAGGERATED EFFECT FROM NEWSANNOUNCEMENTS, WIDER SPREADS AND ANY OTHER RELEVANT RISK.FOR ONE MONTH, THE FIRM MADE AVAILABLE A REPORT ON THECOVERED ORDERS IN NATIONAL MARKET SYSTEM EQUITIES IT RECEIVEDFOR EXECUTION FORM ANY PERSON. THIS REPORT CONTAINEDINCORRECT INFORMATION AS TOTAL COVERED ORDERS, TOTAL COVEREDSHARES, CANCELED SHARES, AWAY EXECUTED SHARES, SHARES FROM5-30 MINUTES, AVERAGE REALIZED SPREAD, AVERAGE EFFECTIVESPREAD, PRICE IMPROVED SHARES, PRICE IMPROVED AVERAGE AMOUNT,PRICE IMPROVED AVERAGE TIME, OUTSIDE THE QUOTE SHARES,OUTSIDE THE QUOTE AVERAGE AMOUNT, OUTSIDE THE QUOTE AVERAGETIME, AND CANCELED SHARES. IN ADDITION, THE REPORT EXCLUDED ANORDER THAT SHOULD HAVE BEEN COVERED. THE FIRM'S SUPERVISORYSYSTEM DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNEDTO ACHIEVE COMPLIANCE WITH CERTAIN APPLICABLE SECURITIES LAWS,REGULATIONS AND/OR FINRA AND SEC RULES ADDRESSING TRADING ANDMARKET MAKING TOPICS. THE FIRM'S WSPS FAILED TO PROVIDE FORMINIMAL REQUIREMENTS FOR ADEQUATE WSPS IN TRADE REPORTING(THIRD PARTY REPORTING); TRADING HALTS-ATS; AND RULES APPLICABLETO ATSS AND ECNS (FIVE PERCENT THRESHOLD REQUIREMENTS, 20%THRESHOLD REQUIREMENTS). (ALLEGATIONS CONTINUED IN COMMENT.)







Initiated By: FINRA






Other Product Type(s): NATIONAL MARKET SYSTEM EQUITIES

SEC RULE 10B-10, SEC RULES 605, 611(A)(1) OF REGULATION NMS, FINRARULES 2010, 2265, 7450, NASD RULE 3010 - UBS SECURITIES, LLC WHEN ITACTED AS PRINCIPAL FOR ITS OWN ACCOUNT, FAILED TO PROVIDEWRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMERS THAT IT WAS AMARKET MAKER IN EACH SUCH SECURITY. THE FIRM TRANSMITTEDREPORTS TO THE ORDER AUDIT TRAIL SYSTEM (OATS) THAT CONTAINEDINACCURATE "NOT-HELD" AND "DIRECTED" SPECIAL HANDLING CODES.THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH SEC RULE611(A)(1) OF REGULATION NMS, INCLUDING THE FIRM'S USE OF RULE611(B) EXCEPTIONS, COMPLIANCE WITH THE SELF-HELP EXCEPTION,DOCUMENTATION OF THE EXTERNALLY OBSERVABLE CIRCUMSTANCESUPON WHICH THE PRICE IS BASED FOR INTRADAY BENCHMARK VOLUMEWEIGHTED AVERAGE PRICE (VWAP) TRADES WITH AN OVER/UNDERPROVISION, AND DOCUMENTATION THAT THE FEE-PASS MEETS THEREQUIREMENTS SET BY THE SEC FOR AMERICAN DEPOSITORY RECEIPT(ADR) CONVERSIONS THAT INCLUDE A CONVERSION FEE THAT IS PASSEDTO THE CUSTOMER. THE FIRM'S SUPERVISORY SYSTEM DID NOTPROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH CERTAIN APPLICABLE SECURITIES LAWS,REGULATIONS AND/OR FINRA AND SEC RULES ADDRESSING TRADING ANDMARKET MAKING TOPICS. THE FIRM'S WRITTEN SUPERVISORYPROCEDURES (WSPS) FAILED TO PROVIDE FOR MINIMAL REQUIREMENTSFOR ADEQUATE WSPS IN DESIGNATION OF PRINCIPALS IN EACH OFFICEOF SUPERVISORY JURISDICTION (OSJ); ORDER HANDLING (LIMIT ORDERDISPLAY, QUOTE DISSEMINATION, MARKET ORDER PROTECTION; TRADEREPORTING (MODIFIERS, NASDAQ ORDER ENTRY, THIRD PARTYREPORTING; TRADING HALTS (ALTERNATE TRADING SYSTEM (ATS), BATS,ORDER ENTRY, NASDAQ ORDER ENTRY); NASDAQ PREVENTION OFORDER ENTRY/CLEARLY ERRONEOUS; NASDAQ ORDER IDENTIFICATION;INFORMATION BARRIERS; BOOKS AND RECORDS; AND ATS TRADEREPORTING. THE FIRM FAILED TO PROVIDE DOCUMENTARY EVIDENCETHAT ON THE TRADE DATES REVIEWED, IT PERFORMED THESUPERVISORY REVIEWS SET FORTH IN ITS WSPS CONCERNING ORDERHANDLING (SEC RULE 606, MARKET ORDER PROTECTION, SEC RULE 605);ANTI-INTIMIDATION OR COORDINATION; FIRM QUOTE, MULTIPLE MPIDS;ATS-R FILING. THE FIRM FAILED TO PROVIDE WRITTEN NOTIFICATIONDISCLOSING TO ITS CUSTOMERS ITS CORRECT CAPACITY INTRANSACTIONS. THE FIRM ACCEPTED ORDERS FROM CUSTOMERS FOREXECUTION IN THE PRE-MARKET SESSION OR POST-MARKET SESSIONWITHOUT DISCLOSING TO SUCH CUSTOMERS THAT EXTENDED HOURSTRADING INVOLVES MATERIAL TRADING RISKS, INCLUDING THEPOSSIBILITY OF LOWER LIQUIDITY, HIGH VOLATILITY, CHANGING PRICES,UNLINKED MARKETS, AN EXAGGERATED EFFECT FROM NEWSANNOUNCEMENTS, WIDER SPREADS AND ANY OTHER RELEVANT RISK.FOR ONE MONTH, THE FIRM MADE AVAILABLE A REPORT ON THECOVERED ORDERS IN NATIONAL MARKET SYSTEM EQUITIES IT RECEIVEDFOR EXECUTION FORM ANY PERSON. THIS REPORT CONTAINEDINCORRECT INFORMATION AS TOTAL COVERED ORDERS, TOTAL COVEREDSHARES, CANCELED SHARES, AWAY EXECUTED SHARES, SHARES FROM5-30 MINUTES, AVERAGE REALIZED SPREAD, AVERAGE EFFECTIVESPREAD, PRICE IMPROVED SHARES, PRICE IMPROVED AVERAGE AMOUNT,PRICE IMPROVED AVERAGE TIME, OUTSIDE THE QUOTE SHARES,OUTSIDE THE QUOTE AVERAGE AMOUNT, OUTSIDE THE QUOTE AVERAGETIME, AND CANCELED SHARES. IN ADDITION, THE REPORT EXCLUDED ANORDER THAT SHOULD HAVE BEEN COVERED. THE FIRM'S SUPERVISORYSYSTEM DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNEDTO ACHIEVE COMPLIANCE WITH CERTAIN APPLICABLE SECURITIES LAWS,REGULATIONS AND/OR FINRA AND SEC RULES ADDRESSING TRADING ANDMARKET MAKING TOPICS. THE FIRM'S WSPS FAILED TO PROVIDE FORMINIMAL REQUIREMENTS FOR ADEQUATE WSPS IN TRADE REPORTING(THIRD PARTY REPORTING); TRADING HALTS-ATS; AND RULES APPLICABLETO ATSS AND ECNS (FIVE PERCENT THRESHOLD REQUIREMENTS, 20%THRESHOLD REQUIREMENTS). (ALLEGATIONS CONTINUED IN COMMENT.)


Resolution:


No









Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $90,000 AND REQUIRED TOREVISE ITS WSPS REGARDING DESIGNATION OF PRINCIPALS IN EACHOFFICE OF SUPERVISORY JURISDICTION (OSJ); ORDER HANDLING (LIMITORDER DISPLAY, QUOTE DISSEMINATION, MARKET ORDER PROTECTION;TRADE REPORTING (MODIFIERS, NASDAQ ORDER ENTRY, THIRD PARTYREPORTING; TRADING HALTS (ATS, BATS, ORDER ENTRY, NASDAQ ORDERENTRY); NASDAQ PREVENTION OF ORDER ENTRY/CLEARLY ERRONEOUS;NASDAQ ORDER IDENTIFICATION; INFORMATION BARRIERS; BOOKS ANDRECORDS; ALTERNATE TRADING SYSTEM (ATS) TRADE REPORTING;TRADING HALTS-ATS; AND RULES APPLICABLE TO ATSS AND ELECTRONICCOMMUNICATIONS NETWORK (ECNS) (FIVE PERCENT THRESHOLDREQUIREMENTS, 20% THRESHOLD REQUIREMENTS) WITHIN 90 BUSINESSDAYS OF ACCEPTANCE OF THIS AWC BY THE NAC. FINE PAID IN FULL ON2/5/13.

Regulator Statement ALLEGATIONS CONTINUED: THE FIRM FAILED TO PROVIDE DOCUMENTARYEVIDENCE THAT ON THE TRADE DATES REVIEWED, IT PERFORMED THESUPERVISORY REVIEWS SET FORTH IN IT WSPS CONCERNING ORDERHANDLING (SEC RULE 606); TRADE REPORTING (THIRD PARTYREPORTING); SOFT DOLLAR RECORDS; MPID USAGE ANDREQUIREMENTS; AND FORM ATS-R FILINGS.


No



Allegations: ON TRADE DATES AUGUST 24-25, 2009 (UNLESS NOTED OTHERWISE): UBSSECURITIES, LLC (THE "FIRM"), WHEN ACTING AS PRINCIPAL FOR ITS OWNACCOUNT, FAILED TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TOITS CUSTOMER THAT IT WAS A MARKET MAKER IN EACH SECURITY, INVIOLATION OF SEC RULE 10B-10; THE FIRM TRANSMITTED TO OATSREPORTS THAT CONTAINED INACCURATE, INCOMPLETE, OR IMPROPERLYFORMATTED DATA (SPECIFICALLY INACCURATE "NOT-HELD" AND "DIRECTED" SPECIAL HANDLING CODES), IN VIOLATION OF FINRA RULE7450; THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO SEC RULE 611(A)(1) OF REGULATION NMS, INCLUDING THEFIRM'S USE OF RULE 611(B) EXCEPTIONS, COMPLIANCE WITH THE SELF-HELP EXCEPTION, DOCUMENTATION OF THE "EXTERNALLY OBSERVABLECIRCUMSTANCES" UPON WHICH THE PRICE IS BASED FOR INTRADAYBENCHMARK VWAP TRADES WITH AN OVER/UNDER PROVISIONS, ANDDOCUMENTATION THAT THE FEE-PASS MEETS THE REQUIREMENT SET BYTHE SEC FOR ADR CONVERSIONS THAT INCLUDE A CONVERSION FEETHAT IS PASSED THROUGH TO THE CUSTOMER, IN VIOLATION OF SECRULE 611(A)(1), FINRA RULE 2010, AND NASD RULE 3010; DURING AUGUST2009, THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO CERTAIN APPLICABLE SECURITIES LAWS AND REGULATIONS,AND/OR THE RULES OF FINRA AND THE SEC, IN VIOLATION OF FINRA RULE2010 AND NASD RULE 3010; THE FIRM FAILED TO PROVIDE DOCUMENTARYEVIDENCE THAT IT PERFORMED THE SUPERVISORY REVIEWS SET FORTHIN ITS WRITTEN SUPERVISORY PROCEDURES CONCERNING THEFOLLOWING SUBJECT AREAS: ORDER HANDLING (SEC RULE 606, MARKETORDER PROTECTION, SEC RULE 605), ANTI-INTIMIDATION ORCOORDINATION, FIRM QUOTE, MULTIPLE MPIDS, ATS-R FILING, INVIOLATION OF FINRA RULE 2010 AND NASD RULE 3010.

ON TRADE DATE AUGUST 18, 2010 (UNLESS NOTED OTHERWISE): THEFIRM FAILED TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITSCUSTOMER ITS CORRECT CAPACITY IN THE TRANSACTION, IN VIOLATIONOF SEC RULE 10B-10; THE FIRM ACCEPTED ORDERS FROM CUSTOMERSFOR THE EXECUTION IN THE PRE-MARKET SESSIONS OR POST-MARKETSESSIONS WITHOUT DISCLOSING TO SUCH CUSTOMERS THAT EXTENDEDHOURS TRADING INVOLVES MATERIAL TRADING RISKS, IN VIOLATION OFFINRA RULE 2265; DURING JULY 2010, THE FIRM MADE AVAILABLE AREPORT ON THE COVERED ORDERS IN NATIONAL MARKET SYSTEMEQUITIES THAT IT RECEIVED FOR EXECUTION FROM ANY PERSON ANDSAID REPORT CONTAINED INCORRECT INFORMATION AND EXCLUDED ANORDER THAT SHOULD HAVE BEEN COVERED, IN VIOLATION OF SEC RULE605 OR REGULATION NMS; DURING AUGUST 2010, THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TOCERTAIN APPLICABLE SECURITIES LAWS AND REGULATIONS AND/OR THERULES OF FINRA AND THE SEC, IN VIOLATION OF FINRA RULE 2010 ANDNASD RULE 3010; THE FIRM FAILED TO PROVIDE DOCUMENTARYEVIDENCE THAT ON THE TRADE DATES REVIEWED IN THE 2010 TMMSEXAMINATION IT PERFORMED THE SUPERVISORY REVIEWS SET FORTH INITS WRITTEN SUPERVISORY PROCEDURES CONCERNING THEFOLLOWING SUBJECT AREAS: ORDER HANDLING (SEC RULE 606), TRADEREPORTING (THIRD PARTY REPORTING); SOFT DOLLAR RECORDS, MPIDUSAGE AND REQUIREMENTS, AND FORM ATS-R FILINGS, IN VIOLATION OFFINRA RULE 2010 AND NASD RULE 3010.







ON TRADE DATES AUGUST 24-25, 2009 (UNLESS NOTED OTHERWISE): UBSSECURITIES, LLC (THE "FIRM"), WHEN ACTING AS PRINCIPAL FOR ITS OWNACCOUNT, FAILED TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TOITS CUSTOMER THAT IT WAS A MARKET MAKER IN EACH SECURITY, INVIOLATION OF SEC RULE 10B-10; THE FIRM TRANSMITTED TO OATSREPORTS THAT CONTAINED INACCURATE, INCOMPLETE, OR IMPROPERLYFORMATTED DATA (SPECIFICALLY INACCURATE "NOT-HELD" AND "DIRECTED" SPECIAL HANDLING CODES), IN VIOLATION OF FINRA RULE7450; THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO SEC RULE 611(A)(1) OF REGULATION NMS, INCLUDING THEFIRM'S USE OF RULE 611(B) EXCEPTIONS, COMPLIANCE WITH THE SELF-HELP EXCEPTION, DOCUMENTATION OF THE "EXTERNALLY OBSERVABLECIRCUMSTANCES" UPON WHICH THE PRICE IS BASED FOR INTRADAYBENCHMARK VWAP TRADES WITH AN OVER/UNDER PROVISIONS, ANDDOCUMENTATION THAT THE FEE-PASS MEETS THE REQUIREMENT SET BYTHE SEC FOR ADR CONVERSIONS THAT INCLUDE A CONVERSION FEETHAT IS PASSED THROUGH TO THE CUSTOMER, IN VIOLATION OF SECRULE 611(A)(1), FINRA RULE 2010, AND NASD RULE 3010; DURING AUGUST2009, THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO CERTAIN APPLICABLE SECURITIES LAWS AND REGULATIONS,AND/OR THE RULES OF FINRA AND THE SEC, IN VIOLATION OF FINRA RULE2010 AND NASD RULE 3010; THE FIRM FAILED TO PROVIDE DOCUMENTARYEVIDENCE THAT IT PERFORMED THE SUPERVISORY REVIEWS SET FORTHIN ITS WRITTEN SUPERVISORY PROCEDURES CONCERNING THEFOLLOWING SUBJECT AREAS: ORDER HANDLING (SEC RULE 606, MARKETORDER PROTECTION, SEC RULE 605), ANTI-INTIMIDATION ORCOORDINATION, FIRM QUOTE, MULTIPLE MPIDS, ATS-R FILING, INVIOLATION OF FINRA RULE 2010 AND NASD RULE 3010.







Initiated By: FINRA




CENSURE




Other Product Type(s): NATIONAL MARKET SYSTEM EQUITIES

ON TRADE DATES AUGUST 24-25, 2009 (UNLESS NOTED OTHERWISE): UBSSECURITIES, LLC (THE "FIRM"), WHEN ACTING AS PRINCIPAL FOR ITS OWNACCOUNT, FAILED TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TOITS CUSTOMER THAT IT WAS A MARKET MAKER IN EACH SECURITY, INVIOLATION OF SEC RULE 10B-10; THE FIRM TRANSMITTED TO OATSREPORTS THAT CONTAINED INACCURATE, INCOMPLETE, OR IMPROPERLYFORMATTED DATA (SPECIFICALLY INACCURATE "NOT-HELD" AND "DIRECTED" SPECIAL HANDLING CODES), IN VIOLATION OF FINRA RULE7450; THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO SEC RULE 611(A)(1) OF REGULATION NMS, INCLUDING THEFIRM'S USE OF RULE 611(B) EXCEPTIONS, COMPLIANCE WITH THE SELF-HELP EXCEPTION, DOCUMENTATION OF THE "EXTERNALLY OBSERVABLECIRCUMSTANCES" UPON WHICH THE PRICE IS BASED FOR INTRADAYBENCHMARK VWAP TRADES WITH AN OVER/UNDER PROVISIONS, ANDDOCUMENTATION THAT THE FEE-PASS MEETS THE REQUIREMENT SET BYTHE SEC FOR ADR CONVERSIONS THAT INCLUDE A CONVERSION FEETHAT IS PASSED THROUGH TO THE CUSTOMER, IN VIOLATION OF SECRULE 611(A)(1), FINRA RULE 2010, AND NASD RULE 3010; DURING AUGUST2009, THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO CERTAIN APPLICABLE SECURITIES LAWS AND REGULATIONS,AND/OR THE RULES OF FINRA AND THE SEC, IN VIOLATION OF FINRA RULE2010 AND NASD RULE 3010; THE FIRM FAILED TO PROVIDE DOCUMENTARYEVIDENCE THAT IT PERFORMED THE SUPERVISORY REVIEWS SET FORTHIN ITS WRITTEN SUPERVISORY PROCEDURES CONCERNING THEFOLLOWING SUBJECT AREAS: ORDER HANDLING (SEC RULE 606, MARKETORDER PROTECTION, SEC RULE 605), ANTI-INTIMIDATION ORCOORDINATION, FIRM QUOTE, MULTIPLE MPIDS, ATS-R FILING, INVIOLATION OF FINRA RULE 2010 AND NASD RULE 3010.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO A CENSURE, A $90,000 FINE ($15,000 FOR THE INACCURATE CUSTOMERCONFIRMATIONS; $10,000 FOR THE OATS VIOLATIONS; $5,000 FOR THEEXTENDED HOURS TRADING RISK DISCLOSURE VIOLATIONS; $20,000 FORTHE SEC RULE 605 VIOLATIONS; $7,500 FOR THE REGULATION NMSSUPERVISION VIOLATIONS; AND $32,500 FOR THE SUPERVISIONVIOLATIONS), AND AN UNDERTAKING TO REVISE THE FIRM'S WRITTENSUPERVISORY PROCEDURES WITH RESPECT TO THE AREAS DESCRIBEDABOVE.




i


Initiated By: CME GROUP INC.

Allegations: DURING A REVIEW OF LARGE TRADER REPORTING DURING OCTOBER2012, THE CHICAGO MERCANTILE EXCHANGE NOTED UBS SECURITIESLLC INACCURATELY SUBMITTED LARGE TRADER POSITIONS. AS A RESULT,UBS SECURITIES LLC WAS FINED $5,000 FOR VIOLATING RULE 561.








Initiated By: CME GROUP INC.





Docket/Case Number: CME 12-9171




Resolution:




Decision


i








Allegations: CHAPTER III, SECTION 7, CHAPTER V, SECTIONS 1(B)(111) AND (IV) OF THENASDAQ OPTIONS MARKET RULES - ONE OF UBS SECURITIES LLC'SCUSTOMERS EXCEEDED THE POSITION LIMIT ON THE BULLISH SIDE OFTHE MARKET IN A SECURITY WITHIN A RANGE OF 2.26% TO 16.04% ONFIVE CONSECUTIVE TRADING DAYS. THE FIRM EFFECTED TRANSACTIONSIN THE SECURITY FOR THE SAME CUSTOMER WHILE THE CUSTOMER'SPOSITION IN THE SECURITY EXCEEDED THE POSITION LIMIT. THE FIRMFAILED TO HAVE AN ADEQUATE SUPERVISORY SYSTEM WITH RESPECT TOPOSITION LIMIT REVIEWS AND FAILED TO ENFORCE ITS WRITTENSUPERVISORY PROCEDURES TO ENSURE COMPLIANCE WITH CHAPTERIII, SECTION 7 OF THE NASDAQ OPTIONS MARKET RULES.










Resolution:




No











Allegations: DURING THE REVIEW PERIOD 1/1/2011 THRU 3/31/2011 THE NASDAQOPTIONS MARKET FOUND UBS SECURITIES LLC WAS NOT IN COMPLIANCEWITH THEIR RULES AND REGULATIONS RELATING TO POSITION LIMITS ONTRADING DAYS BETWEEN 2/23/2011 AND 3/01/2011.THE FIRM FAILED TO HAVE AN ADEQUATE SUPERVISORY SYSTEM WITHRESPECT TO POSITION LIMIT REVIEWS AND FAILED TO ENFORCE ITSWRITTEN SUPERVISORY PROCEDURES TO ENSURE COMPLIANCE WITHCHAPTER III, SECTION 7 OF THE NASDAQ OPTIONS MARKET RULES.









Resolution:


Sanction Details: A CENSURE AND A FINE OF $15,000 WAS IMPOSED ON THE FIRM. $7,500FOR POSITION LIMIT VIOLATIONS AND $7,500 FOR SUPERVISIONVIOLATIONS.UBS SECURITIES LLC NEITHER ADMITS NOR DENIES THE FINDINGS OFTHE NASDAQ AND AGREES TO PAY THE MONETARY SANCTIONS.




i


Initiated By: CME GROUP INC.: BOARD OF TRADE DIVISION








Allegations: THE CLEARING HOUSE RISK COMMITTEE HAS FOUND UBS SECURITIESLLC VIOLATED CBOT RULE 930F FROM JANUARY 25, 2012 THROUGHFEBRUARY 7, 2012 AND FINED THE FIRM $50,000. THE FIRM MADE ASETTLEMENT OFFER WHICH THE CLEARING HOUSE RISKCOMMITTEE ACCEPTED AND THE FIRM PAID THE FINE IN DECEMBER 2012.



Resolution:



Settled









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Docket/Case Number: 12-ARCA-13



Allegations: **11/14/12** OFFER OF SETTLEMENT AND CONSENT FILED BY THE LEGALSECTION OF THE MARKET REGULATION DEPARTMENT AT FINRA ANDPENDING NYSE ARCA: CONSENTED TOFINDINGS: FOR THE SOLEPURPOSE OF SETTLING THIS DISCIPLINARY PROCEEDING, WITHOUTADJUDICATION OF ANY ISSUES OF LAW OR FACT, AND WITHOUTADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGS, UBSSECURITIES LLC STIPULATED THAT DURING THE PERIOD OF AUGUST 2008THROUGH SEPTEMBER 2010, IT VIOLATED NYSE ARCA EQUITIES RULES6.18(B) AND (C), BY FAILING TO REASONABLY SUPERVISE THE ACTIVITIESOF ITS ASSOCIATED PERSONS AND THE OPERATION OF ITS SPONSOREDACCESS BUSINESS, IN THAT THE FIRM FAILED TO ESTABLISH ANDMAINTAIN ADEQUATE SUPERVISORY PROCEDURES, INCLUDING WRITTENPROCEDURES AND A REASONABLE SYSTEM OF FOLLOW-UP AND REVIEWDESIGNED TO REASONABLY ENSURE COMPLIANCE WITH NYSE ARCAEQUITIES RULES 6.5, THE PROHIBITION AGAINST MANIPULATIVE TRADINGPRACTICES, INCLUDING SUCH ACTIVITY AT OR NEAR THE CLOSE OF THEMARKET (I.E. "MARKING THE CLOSE"). STIPULATED SANCTION: CENSUREAND FINE IN THE AMOUNT OF $75,000.



Resolution:


Decision







Sanction Details: **12/6/12** DECISION NO. 12-ARCA-13 ISSUED BY NYSE ARCA HEARINGBOARD NYSE ARCA, INC.: DURING THE PERIOD OF AUGUST 2008THROUGH SEPTEMBER 2010, UBS SECURITIES, LLC VIOLATED NYSE ARCAEQUITIES RULES 6.18(B) AND (C) BECAUSE IT FAILED TO REASONABLYSUPERVISE THE ACTIVITIES OF ITS ASSOCIATED PERSONS AND THEOPERATION OF ITS SPONSORED ACCESS BUSINESS, IN THAT IT FAILED TOESTABLISH AND MAINTAIN ADEQUATE SUPERVISORY PROCEDURES,INCLUDING WRITTEN PROCEDURES AND A REASONABLE SYSTEM OFFOLLOW-UP AND REVIEW DESIGNED TO REASONABLY ENSURECOMPLIANCE WITH NYSE ARCA EQUITIES RULE 6.5, THE PROHIBITIONAGAINST MANIPULATIVE TRADING PRACTICES, INCLUDING SUCH ACTIVITYAT OR NEAR THE CLOSE OF THE MARKET (I.E. "MARKING THE CLOSE").CONSENT TO CENSURE AND $75,000 FINE.

Regulator Statement **12/6/12** THIS DECISION IS FINAL AS OF THE DATE OF ISSUANCE OF THEDECISION.











Allegations: WITHOUT ADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGS, UBSSECURITIES LLC STIPULATED THAT DURING THE PERIOD OF AUGUST 2008THROUGH SEPTEMBER 2010, IT VIOLATED NYSE ARCA EQUITIES RULES6.18(B) AND (C), BY FAILING TO REASONABLY SUPERVISE THE ACTIVITIESOF ITS ASSOCIATED PERSONS AND THE OPERATION OF ITS SPONSOREDACCESS BUSINESS, IN THAT THE FIRM FAILED TO ESTABLISH ANDMAINTAIN ADEQUATE SUPERVISORY PROCEDURES, INCLUDING WRITTENPROCEDURES AND A REASONABLE SYSTEM OF FOLLOW-UP AND REVIEWDESIGNED TO REASONABLY ENSURE COMPLIANCE WITH NYSE ARCAEQUITIES RULES 6.5, THE PROHIBITION AGAINST MANIPULATIVE TRADINGPRACTICES.









Resolution:


Sanction Details: CENSURE AND $75,000 FINE


Decision


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Initiated By: FINRA


Other


N/A





Allegations: FINRA RULE 2010, NASD RULES 2110, 3010, 3070(F): THE FIRM WAS NAMEDAS A DEFENDANT IN CIVIL LITIGATION FILINGS BUT DID NOT SUBMITCOPIES OF ANY OF THOSE FILINGS TO NASD/FINRA UNTIL JUNE 2011,WHEN IT SELF-REPORTED TO FINRA ITS FAILURE TO SUBMIT THEREQUIRED FILINGS, AND DID NOT REPORT ALL OF THEM UNTIL JULY 2011.THE FIRM FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM,AND FAILED TO ESTABLISH, MAINTAIN AND ENFORCE WRITTENSUPERVISORY PROCEDURES THAT WERE REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH ITS OBLIGATIONS UNDER NASD RULE3070(F).



Resolution:


No









Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE IT IS CENSURED AND FINED $100,000. FINE PAID IN FULL ON11/23/2012.


No



Initiated By: FINRA




CENSURE





Allegations: FORMER NASD RULE 3070(F) REQUIRED THE FIRM TO SUBMIT COPIES OFCIVIL LITIGATION OR NON-FINRA ARBITRATION COMPLAINTS FILEDAGAINST THE FIRM THAT MET CERTAIN PARAMETERS. IN JUNE 2011, THEFIRM SELF-REPORTED TO FINRA THAT IT HAD INADVERTENTLY FAILED TOMAKE THESE SUBMISSIONS SINCE THE RULE'S IMPLEMENTATION IN MAY2003. FINRA ASSERTED THAT THE FIRM VIOLATED FINRA RULE 2010 ANDNASD RULES 2110, 3010, AND 3070(F) BY FAILING TO (I) MAKE THEREQUIRED SUBMISSIONS; (II) ESTABLISH AND MAINTAIN A SUPERVISORYSYSTEM FOR COMPLIANCE WITH RULE 3070(F); AND (III) ESTABLISH,MAINTAIN AND ENFORCE WRITTEN SUPERVISORY PROCEDURES THATWERE REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RULE3070(F).









Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND FINDINGS; AND WAS CENSURED AND FINED$100,000.




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Allegations: THE CLEARING HOUSE RISK COMMITTEE HAS FOUND UBS SECURITIESLLC VIOLATED CBOT RULE 930F AND 971A AND FINED THE FIRM $50,000.THE FIRM MADE A SETTLEMENT OFFER OF $25,000 WHICH THE CLEARINGHOUSE RISK COMMITTEE ACCEPTED AND THE FIRM PAID IN DECEMBER2011. THE REMAINING $25,000 WAS PENDING THE RESULTS OF THE 2012AUDIT. AFTER THIS YEARS AUDIT COMPLETED IN AUGUST 2012, THECLEARING HOUSE RISK COMMITTEE FOUND THAT UBS SECURITIES LLCVIOLATED CBOT RULE 930F AND REINSTATED THE REMAINING $25,000FINE FROM 2011.



Resolution:




Settled








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Initiated By: ICE US FUTURES INC








Allegations: AFTER A REVIEW CONDUCTED BY THE COMPLIANCE DEPARTMENT OF ICEFUTURES U.S., INC. IT FOUND THAT UBS VIOLATED EXCHANGE RULE27.12A IN NOVEMBER OF 2010.



Resolution:


Sanction Details: FINE OF $5000


Settled


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Allegations: ON 11 OCCASIONS IN THE FIRST QUARTER OF 2010 AND ON 15OCCASIONS IN THE SECOND QUARTER OF 2010, UBS EFFECTED OPTIONSTRANSACTIONS AT PRICES INFERIOR TO THE NBBO. THIS CONDUCTCONSTITUTES SEPARATE & DISTINCT VIOLATIONS OF ISE RULES 803(C)(2)AND 1901. IN ADDITION DURING THE TIME PERIOD OUTLINED ABOVE, UBSFAILED TO ESTABLISH EFFECTIVE POLICIES & PROCEDURES FORSUPERVISION & CONTROL TO ENSURE COMPLIANCE WITH ISE RULESREGARDING THE AVOIDANCE OF TRADE THROUGH VIOLATIONS. THISCONDUCT CONSTITUTES A VIOLATION OF ISE RULE 401.









Censure


FINE


Docket/Case Number: 2010-064 & 2010-118



ON 11 OCCASIONS IN THE FIRST QUARTER OF 2010 AND ON 15OCCASIONS IN THE SECOND QUARTER OF 2010, UBS EFFECTED OPTIONSTRANSACTIONS AT PRICES INFERIOR TO THE NBBO. THIS CONDUCTCONSTITUTES SEPARATE & DISTINCT VIOLATIONS OF ISE RULES 803(C)(2)AND 1901. IN ADDITION DURING THE TIME PERIOD OUTLINED ABOVE, UBSFAILED TO ESTABLISH EFFECTIVE POLICIES & PROCEDURES FORSUPERVISION & CONTROL TO ENSURE COMPLIANCE WITH ISE RULESREGARDING THE AVOIDANCE OF TRADE THROUGH VIOLATIONS. THISCONDUCT CONSTITUTES A VIOLATION OF ISE RULE 401.


Resolution:


Sanction Details: FIRM FINED $30,000


No





Allegations: ON 11 OCCASIONS IN THE FIRST QUARTER OF 2010 AND ON 15OCCASIONS IN THE SECOND QUARTER OF 2010, UBS EFFECTED OPTIONSTRANSACTIONS AT PRICES INFERIOR TO THE NBBO. THIS CONDUCTCONSTITUTES SEPARATE & DISTINCT VIOLATIONS OF ISE RULES 803(C)(2)AND 1901. IN ADDITION DURING THE TIME PERIOD OUTLINED ABOVE, UBSFAILED TO ESTABLISH EFFECTIVE POLICIES & PROCEDURES FORSUPERVISION & CONTROL TO ENSURE COMPLIANCE WITH ISE RULESREGARDING THE AVOIDANCE OF TRADE THROUGH VIOLATIONS. THISCONDUCT CONSTITUTES A VIOLATION OF ISE RULE 401.









Censure


FINE


Docket/Case Number: 2010-064 & 2010-118




Resolution:


Sanction Details: CENSURE AND A FINE OF $30,000.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO A CENSURE AND A FINE OF $30,000.




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Allegations: BOSTON OPTIONS EXCHANGE TRADING RULES CHAPTER V, SECTION1(B)(IV), CHAPTER VI,SECTION 5(C)(III) -UBS SECURITIES LLC TRADEDAGAINST A DIRECTED ORDER THAT THE FIRM HAD PREVIOUSLY RECEIVEDAND REJECTED WITHOUT FIRST EXPOSING IT TO THE BOX BOOK (THEELECTRONIC BOOK OF ORDERS MAINTAINED BY THE BOSTON OPTIONSEXCHANGE TRADING HOST). THE FIRM FAILED TO MAINTAIN AN ADEQUATESYSTEM OF SUPERVISION, INCLUDING ADEQUATE WRITTENSUPERVISORY PROCEDURES AND EFFECTIVE MONITORING REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH EXCHANGE RULES RELATINGTO THE OBLIGATIONS OF AN EXCHANGE MARKET MAKER WHENHANDLING DIRECTED ORDERS DURING AND SUBSEQUENT TO THEREVIEW PERIOD.













Resolution:




No




Allegations: BOSTON OPTIONS EXCHANGE REGULATION (BOXR) FOUND THAT ONELEVEN OCCASIONS UBS SECURITIES LLC TRADED AGAINST A DIRECTEDORDER THAT UBS SECURITIES LLC PREVIOUSLY RECEIVED ANDREJECTED WITHOUT FIRST EXPOSING THE ORDER TO THE BOX BOOKFOR AT LEAST THREE SECONDS. THIS VIOLATED BOX TRADING RULESCHAPTER VI, MARKET MAKER, SECTION 5, OBLIGATIONS OF MARKETMAKERS. ADDITIONALLY, BOXR STATED THAT THE FIRM FAILED TOMAINTAIN AN ADEQUATE SYSTEM OF SUPERVISION, INCLUDINGADEQUATE WRITTEN SUPERVISORY PROCEDURES AND EFFECTIVEMONITORING REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHEXCHANGE RULES RELATING TO THE OBLIGATIONS OF AN EXCHANGEMARKET MAKER WHEN HANDLING DIRECTED ORDERS DURING ANDSUBSEQUENT TO THE REVIEW PERIOD, WHICH IS A VIOLATION OF BOXTRADING RULE CHAPTER 5, DOING BUSINESS ON BOX, SECTION 1.WITHOUT ADMITTING OR DENYING THE ALLEGATIONS OR FINDINGS, UBSSECURITIES LLC HAS CONSENTED TO THE IMPOSITION OF A CENSUREAND HAS AGREED TO PAY A FINE OF $15,000.00.







Initiated By: BOSTON OPTIONS EXCHANGE REGULATION (BOXR)




CENSURE





BOSTON OPTIONS EXCHANGE REGULATION (BOXR) FOUND THAT ONELEVEN OCCASIONS UBS SECURITIES LLC TRADED AGAINST A DIRECTEDORDER THAT UBS SECURITIES LLC PREVIOUSLY RECEIVED ANDREJECTED WITHOUT FIRST EXPOSING THE ORDER TO THE BOX BOOKFOR AT LEAST THREE SECONDS. THIS VIOLATED BOX TRADING RULESCHAPTER VI, MARKET MAKER, SECTION 5, OBLIGATIONS OF MARKETMAKERS. ADDITIONALLY, BOXR STATED THAT THE FIRM FAILED TOMAINTAIN AN ADEQUATE SYSTEM OF SUPERVISION, INCLUDINGADEQUATE WRITTEN SUPERVISORY PROCEDURES AND EFFECTIVEMONITORING REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHEXCHANGE RULES RELATING TO THE OBLIGATIONS OF AN EXCHANGEMARKET MAKER WHEN HANDLING DIRECTED ORDERS DURING ANDSUBSEQUENT TO THE REVIEW PERIOD, WHICH IS A VIOLATION OF BOXTRADING RULE CHAPTER 5, DOING BUSINESS ON BOX, SECTION 1.WITHOUT ADMITTING OR DENYING THE ALLEGATIONS OR FINDINGS, UBSSECURITIES LLC HAS CONSENTED TO THE IMPOSITION OF A CENSUREAND HAS AGREED TO PAY A FINE OF $15,000.00.


Resolution:


Sanction Details: UBS SECURITIES LLC HAS CONSENTED TO THE IMPOSITION OF ACENSURE AND HAS AGREED TO PAY A FINE OF $15,000.00.




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Initiated By: HAWAII DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS DIVISIONOF BUSINESS REGULATION




Docket/Case Number:


Other Product Type(s): AUCTION RATE SECURITIES

Allegations: FAILURE TO SUPERVISE AND UNETHICAL BUSINESS PRACTICES RELATEDTO THE MARKETING AND SALE OF AUCTION RATE SECURITIES











Resolution:


Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $326,618.99 TO HAWAII.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSOCONFIRMED THEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING ASPART OF REGULATORY SETTLEMENTS ENTERED INTO IN 2008.ADDITIONALLY, HAWAII WILL RECEIVE A TOTAL PAYMENT OF $326,618.99FROM UBS, FROM A TOTAL FINE OF $75MM PREVIOUSLY AGREED UPONWITH THE STATE OF MASSACHUSETTS AND THE NORTH AMERICANSECURITIES ADMINISTRATORS ASSOCIATION. THIS FILING FURTHERCLARIFIES OCCURRENCE NUMBER 1408435 PREVIOUSLY FILED.

Sanctions Ordered: Monetary/Fine $326,618.99Disgorgement/RestitutionCease and Desist/Injunction

Consent


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Initiated By: CME GROUP, CHICAGO BOARD OF TRADE DIVISION


Docket/Case Number: 1106261-CTRA

Allegations: THE CHICAGO BOARD OF TRADE NOTED THAT A FIRM THAT HAS A DATAENTRY ERROR RATE OF 10% OR GREATER IS DEEMED TO HAVE VIOLATEDCBOT RULE 536.F AND WILL BE SUBJECT TO SANCTIONS IN ACCORDANCEWITH THE EXCHANGE'S AUTOMATIC FINE SCHEDULE. FOR THE TIMEPERIOD OF OCTOBER 28, 2011 THROUGH NOVEMBER 11, 2011 UBSSECURITIES LLC HAD AN ERROR RATE OF GREATER THAN 10% AND WASFINED $5000.










Docket/Case Number: 1106261-CTRA




Resolution:


Sanction Details: UBS SECURITES LLC PAID A FINE OF $5000.00


Consent


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Initiated By: NORTH CAROLINA SECURITIES DIVISION





Docket/Case Number:






Resolution:


Consent







Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $784,535.02 TO NORTH CAROLINA.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008.ADDITIONALLY, NORTH CAROLINA WILL RECEIVE A TOTAL PAYMENT OF$784,535.02 FROM UBS, FROM A TOTAL FINE OF $75MMPREVIOUSLY AGREED UPON WITH THE STATE OF MASSACHUSETTS ANDTHE NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION. THISFILING FURTHER CLARIFIES OCCURRENCE NUMBER 1408435 PREVIOUSLYFILED.


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Docket/Case Number: ICT 99658



Allegations: THE DEPARTMENT OF MARKET REGULATIONS FOUND THAT UBSSECURITIES LLC FAILED TO ADHERE TO THEIR CONTINUOUS QUOTEOBLIGATION PURSUANT TO CBOE RULE 8.7(D)(II)(A) AND 8.7(B)(IV) INREGARD TO QUOTE WIDTH VIOLATIONS DURING THE MONTH OFSEPTEMBER 2011.



Resolution:


Settled







Sanction Details: UBS SECURITES LLC PAID A FINE OF $4000.00



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Allegations: THE CLEARING HOUSE RISK COMMITTEE FOUND THAT UBS SECURITIESLLC WAS IN VIOLATION OF CBOT RULES 930.F AND 971.A.



Resolution:


Sanction Details: $50,000 FINE PAID ON 10/27/2011

Firm Statement THE CLEARING HOUSE RISK COMMITTEE FOUND THAT UBS SECURITIESLLC VIOLATED CBOT EXCHANGE RULES 930.F AND 971.A. THE FIRMNEITHER ADMITTED NOR DENIED THESE FINDINGS AND PAID A FINE OF$50,000.00. THE CLEARING HOUSE RISK COMMITTEE AGREED TO WAIVE$25,000.00 OF THE FINE IF NO FURTHER SIMILAR VIOLATIONS WEREFOUND DURING THE 2012 CBOT AUDIT AND IF THE EXCHANGE STAFFDETERMINED THAT THE FIRM WAS MAKING ADEQUATEPROGRESS IN RESOLVING THE ISSUES BROUGHT BEFORE THE CLEARINGHOUSE RISK COMMITTEE.


Settled


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Initiated By: NEW HAMPSHIRE BUREAU OF SECURITIES REGULATION





Docket/Case Number:






Resolution:


Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $488,179.84 TO NEW HAMPSHIRE.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008.ADDITIONALLY, NEW HAMPSHIRE WILL RECEIVE A TOTAL PAYMENT OF$488,179.84 FROM UBS, FROM A TOTAL FINE OF $75MM PREVIOUSLYAGREED UPON WITH THE STATE OF MASSACHUSETTS AND THE NORTHAMERICAN SECURITIES ADMINISTRATORS ASSOCIATION. THIS FILINGFURTHER CLARIFIES OCCURRENCE NUMBER 1408435 PREVIOUSLY FILED.


Consent


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Allegations: SEC RELEASE 34-65733, NOVEMBER 10, 2011: THE SECURITIES ANDEXCHANGE COMMISSION (COMMISSION) DEEMS IT APPROPRIATE AND INTHE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED PURSUANT TOSECTIONS 15(B) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934(EXCHANGE ACT) AGAINST THE FIRM.

THESE PROCEEDINGS ARISE OUT OF PRACTICES ENGAGED IN BY THESECURITIES LENDING DESK OF THE FIRM IN PROVIDING AND RECORDING "LOCATES" TO ITS CUSTOMERS TO ENABLE THE CUSTOMERS TOEXECUTE SHORT SALES. THE PRACTICES DESCRIBED HEREIN HAVE BEENIN PLACE AT THE FIRM SINCE AT LEAST 2007.

WHENEVER A LENDING DESK EMPLOYEE ("LENDING DESK TRADER")APPROVED A LOCATE REQUEST, THE LENDING DESK TRADER RECORDEDTHE PARTICULAR SOURCE OF THE SHARES AVAILABLE TO BORROW ONTHE THE FIRM LOCATE LOG, SUCH AS ANOTHER FINANCIAL INSTITUTIONTHAT HAD SHARES AVAILABLE TO LEND TO THE FIRM. SPECIFICALLY, EACHLOCATE INCLUDED EITHER THE NAME OF AN EMPLOYEE AT THE LENDEROR AN INDICATION THAT THE LENDING DESK TRADER WAS RELYING ONAN ELECTRONIC AVAILABILITY FEED. THUS, THE FIRM'S LOCATE LOGAPPEARED TO DISTINGUISH BETWEEN LOCATES GRANTED BASED ONTHE FIRM CONTACTING A LENDER'S EMPLOYEE TO CONFIRM AVAILABILITYOF SHARES AND LOCATES GRANTED BASED ON AN ELECTRONICAVAILABILITY FEED THAT LENDERS TYPICALLY BROADCASTSIMULTANEOUSLY TO MANY BROKER-DEALERS BEFORE THE MARKETOPENS EACH DAY. IN PRACTICE, HOWEVER, THE FIRM SECURITIESLENDING DESK TRADERS ROUTINELY RECORDED THE NAME OF ALENDER'S EMPLOYEE EVEN WHEN NO ONE AT THE FIRM HAD ACTUALLYCONTACTED THE LENDER EMPLOYEE TO CONFIRM AVAILABILITY.

THE FIRM'S LOCATE DOCUMENTATION PRACTICES CREATED ANINACCURATE RECORD REGARDING THE BASIS UPON WHICH LOCATESHAD BEEN GRANTED AND CAUSED LOCATES TO BE GRANTED WITHOUTTHE FIRM DOCUMENTING A REASONABLE BASIS FOR LOCATES. THEFIRM'S LOCATE DOCUMENTATION PRACTICES CREATED A RISK OFLOCATES BEING GRANTED BASED ON SOURCES THAT COULD NOT BERELIED UPON IF SHARES WERE NEEDED FOR THE FIRM'S OR ANOTHEREXECUTING BROKER'S SETTLEMENT OBLIGATIONS. ACCORDINGLY, AS ARESULT OF ITS ACTIONS, THE FIRM VIOLATED SECTION 17(A) OF THEEXCHANGE ACT AND RULE 203(B) OF REGULATION SHO THEREUNDER.









Other


N/A






Resolution:

Other Sanctions Ordered: THE FIRM HAS UNDERTAKEN TO RETAIN, AT THE FIRM'S EXPENSE ANDWITHIN THIRTY (30) DAYS OF THE ISSUANCE OF THIS ORDER, A QUALIFIEDINDEPENDENT CONSULTANT (THE CONSULTANT) NOT UNACCEPTABLE TOTHE STAFF OF THE DIVISION OF ENFORCEMENT (THE STAFF). THE FIRMSHALL REQUIRE THE CONSULTANT TO CONDUCT A COMPREHENSIVEREVIEW OF THE FIRM'S SECURITIES LENDING DESK POLICIES,PROCEDURES AND PRACTICES WITH RESPECT TO GRANTING LOCATEREQUESTS AND THE FIRM'S PROCEDURES TO MONITOR COMPLIANCETHEREWITH, TO SATISFY ITS OBLIGATIONS UNDER SECTION 17(A) OF THEEXCHANGE ACT AND 203(B) OF REG SHO THEREUNDER TO (I) ACCEPTSHORT SALE ORDERS FOR EQUITY SECURITIES ONLY IF IT HASBORROWED THE SECURITIES OR ENTERED INTO A BONA FIDEARRANGEMENT TO BORROW THE SECURITIES OR HAS REASONABLEGROUNDS TO BELIEVE THAT SECURITIES CAN BE BORROWED FORDELIVERY WHEN DUE; AND (II) DOCUMENT COMPLIANCE WITH RULE203(B)(1).

Sanction Details: IN ANTICIPATION OF THE INSTITUTION OF THESE PROCEEDINGS,RESPONDENT HAS SUBMITTED AN OFFER OF SETTLEMENT (THE OFFER)WHICH THE COMMISSION HAS DETERMINED TO ACCEPT. SOLELY FOR THEPURPOSE OF THESE PROCEEDINGS AND ANY OTHER PROCEEDINGSBROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TO WHICH THECOMMISSION IS A PARTY, AND WITHOUT ADMITTING OR DENYING THEFINDINGS, EXCEPT AS TO THE COMMISSION'S JURISDICTION OVER IT ANDTHE SUBJECT MATTER OF THESE PROCEEDINGS, WHICH ARE ADMITTED,THE FIRM CONSENTS TO THE ENTRY OF THIS ORDER INSTITUTINGADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS PURSUANT TOSECTIONS 15(B) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934,MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER (ORDER). AS A RESULT OF THE CONDUCTDESCRIBED ABOVE, THE FIRM WILLFULLY VIOLATED SECTION 17(A) OFTHE EXCHANGE ACT AND RULE 203(B) OF REGULATION SHOTHEREUNDER.

IN VIEW OF THE FOREGOING, THE COMMISSION DEEMS IT APPROPRIATE,AND IN THE PUBLIC INTEREST, TO IMPOSE THE SANCTIONS AGREED TO INTHE FIRM'S OFFER.ACCORDINGLY, PURSUANT TO SECTIONS 15(B) AND 21C OF THEEXCHANGE ACT, IT IS HEREBY ORDERED THAT, THE FIRM CEASE ANDDESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANYFUTURE VIOLATIONS OF SECTION 17(A) THE EXCHANGE ACT AND RULE203(B) OF REGULATION SHO THEREUNDER, IS CENSURED, SHALL, WITHINFIFTEEN (15) DAYS OF THE ENTRY OF THIS ORDER, PAY A CIVIL MONEYPENALTY IN THE AMOUNT OF $8 MILLION TO THE UNITED STATESTREASURY, AND COMPLY WITH THE UNDERTAKINGS.


Yes

Sanctions Ordered: CensureMonetary/Fine $8,000,000.00Cease and Desist/Injunction

Order






IN ANTICIPATION OF THE INSTITUTION OF THESE PROCEEDINGS,RESPONDENT HAS SUBMITTED AN OFFER OF SETTLEMENT (THE OFFER)WHICH THE COMMISSION HAS DETERMINED TO ACCEPT. SOLELY FOR THEPURPOSE OF THESE PROCEEDINGS AND ANY OTHER PROCEEDINGSBROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TO WHICH THECOMMISSION IS A PARTY, AND WITHOUT ADMITTING OR DENYING THEFINDINGS, EXCEPT AS TO THE COMMISSION'S JURISDICTION OVER IT ANDTHE SUBJECT MATTER OF THESE PROCEEDINGS, WHICH ARE ADMITTED,THE FIRM CONSENTS TO THE ENTRY OF THIS ORDER INSTITUTINGADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS PURSUANT TOSECTIONS 15(B) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934,MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER (ORDER). AS A RESULT OF THE CONDUCTDESCRIBED ABOVE, THE FIRM WILLFULLY VIOLATED SECTION 17(A) OFTHE EXCHANGE ACT AND RULE 203(B) OF REGULATION SHOTHEREUNDER.

IN VIEW OF THE FOREGOING, THE COMMISSION DEEMS IT APPROPRIATE,AND IN THE PUBLIC INTEREST, TO IMPOSE THE SANCTIONS AGREED TO INTHE FIRM'S OFFER.ACCORDINGLY, PURSUANT TO SECTIONS 15(B) AND 21C OF THEEXCHANGE ACT, IT IS HEREBY ORDERED THAT, THE FIRM CEASE ANDDESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANYFUTURE VIOLATIONS OF SECTION 17(A) THE EXCHANGE ACT AND RULE203(B) OF REGULATION SHO THEREUNDER, IS CENSURED, SHALL, WITHINFIFTEEN (15) DAYS OF THE ENTRY OF THIS ORDER, PAY A CIVIL MONEYPENALTY IN THE AMOUNT OF $8 MILLION TO THE UNITED STATESTREASURY, AND COMPLY WITH THE UNDERTAKINGS.




Allegations: THE SECURITIES AND EXCHANGE COMMISSION INSTITUTED A SETTLEDPROCEEDING UNDER SECTIONS 15(B) AND 21C OF THE SECURITIESEXCHANGE ACT OF 1934 ARISING OUT OF THE FIRM'S SECURITIESLENDING DESK PRACTICES IN PROVIDING AND RECORDING "LOCATES" INCONNECTION WITH SHORT SALES. THE SEC FOUND THAT SINCE ATLEAST 2007 THE FIRM'S LOCATE DOCUMENTATION PRACTICES CREATED ARISK OF LOCATES BEING GRANTED BASED ON SOURCES THAT COULDNOT BE RELIED UPON IF SHARES WERE NEEDED FOR THE FIRM'S OROTHER EXECUTING BROKER'S SETTLEMENT OBLIGATIONS.ACCORDINGLY, AS A RESULT OF ITS ACTIONS, THE FIRM VIOLATEDSECTION 17(A) OF THE EXCHANGE ACT AND RULE 203(B) OF REGULATIONSHO THEREUNDER.








Cease and Desist


CENSURECIVIL PENALTY $8 MILLION





Resolution:

Other Sanctions Ordered: THE FIRM HAS UNDERTAKEN TO RETAIN, AT THE FIRM'S EXPENSE ANDWITHIN THIRTY (30) DAYS OF THE ISSUANCE OF THIS ORDER, A QUALIFIEDINDEPENDENT CONSULTANT (THE CONSULTANT) NOTUNACCEPTABLE TO THE STAFF OF THE DIVISION OF ENFORCEMENT (THESTAFF). THE FIRM SHALL REQUIRE THE CONSULTANT TO CONDUCT ACOMPREHENSIVE REVIEW OF THE FIRM'S SECURITIES LENDING DESKPOLICIES, PROCEDURES AND PRACTICES WITH RESPECT TO GRANTINGLOCATE REQUESTS AND THE FIRM'S PROCEDURES TO MONITORCOMPLIANCE THEREWITH, TO SATISFY ITSOBLIGATIONS UNDER SECTION 17(A) OF THE EXCHANGE ACT AND 203(B)OF REG SHO THEREUNDER TO (I) ACCEPT SHORT SALE ORDERS FOREQUITY SECURITIES ONLY IF IT HAS BORROWED THE SECURITIES ORENTERED INTO A BONA FIDE ARRANGEMENT TO BORROW THESECURITIES OR HAS REASONABLE GROUNDS TO BELIEVE THATSECURITIES CAN BE BORROWED FOR DELIVERY WHEN DUE; AND (II)DOCUMENT COMPLIANCE WITH RULE 203(B)(1).

Sanction Details: THE SEC ORDERED, PURSUANT TO SECTIONS 15(B) AND 21C OF THEEXCHANGE ACT, THAT THE FIRM (I) CEASE AND DESIST FROMCOMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONSOF SECTION 17(A) THE EXCHANGE ACT AND RULE 203(B) OF REGULATIONSHO THEREUNDER, (II) IS CENSURED, (III) SHALL, WITHIN FIFTEEN (15)DAYS OF THE ENTRY OF THE ORDER, PAY A CIVIL MONEY PENALTY IN THEAMOUNT OF $8 MILLION TO THE UNITED STATES TREASURY, AND (IV)COMPLY WITH THE UNDERTAKINGS (AS DESCRIBED IN ITEM 12B OF THISDRP).

Firm Statement WITHOUT ADMITTING OR DENYING THE COMMISSION'S FINDINGS (EXCEPTAS TO JURISDICTION), THE FIRM CONSENTED TO THE ENTRY OF ANADMINISTRATIVE ORDER IN WHICH THE SEC FOUND THAT THE FIRMWILLFULLY VIOLATED SECTION 17(A) OF THE EXCHANGE ACT AND RULE203(B) OF REGULATION SHO THEREUNDER. (AS THE SEC NOTED IN ITSORDER, "[A] WILLFUL VIOLATION OF THE SECURITIES LAWS MEANSMERELY 'THAT THE PERSON CHARGED WITH THE DUTY KNOWS WHAT HEIS DOING.' THERE IS NO REQUIREMENT THAT THE ACTOR 'ALSO BE AWARETHAT HE IS VIOLATING ONE OF THE RULES OR ACTS.'" (CITATIONSOMITTED.)) ADDITIONALLY, THE ORDER STATES THAT "THE IMPACT OF[THE FIRM'S] PRACTICES WAS MITIGATED BY CERTAIN FACTORS. FIRST,SOME OF THE LOCATES UBS GRANTED WERE FURNISHED TO CLIENTSWHO DID NOT EXECUTE SHORT SALES USING THE LOCATES UBSGRANTED OR DID SO FOR SHARE AMOUNTS SMALLER THAN THEAMOUNTS FOR WHICH APPROVALS WERE GRANTED. SECOND, SOME OFTHE LENDERS MAY HAVE HAD THE ABILITY TO LEND SUFFICIENTSECURITIES BY THE DELIVERY DATE TO ALLOW UBS TO MEET ITSSETTLEMENT OBLIGATIONS, NOTWITHSTANDING THE INACCURATEDOCUMENTATION OF THE BASIS FOR GRANTING THE LOCATES. FINALLY,UBS WAS GENERALLY ABLE TO MEET ITS SETTLEMENT OBLIGATIONS BYBORROWING STOCK FROM SOURCES OTHER THAN THE LENDERSIDENTIFIED IN ITS LOCATE LOG."

Sanctions Ordered: CensureMonetary/Fine $8,000,000.00Cease and Desist/Injunction

Order






WITHOUT ADMITTING OR DENYING THE COMMISSION'S FINDINGS (EXCEPTAS TO JURISDICTION), THE FIRM CONSENTED TO THE ENTRY OF ANADMINISTRATIVE ORDER IN WHICH THE SEC FOUND THAT THE FIRMWILLFULLY VIOLATED SECTION 17(A) OF THE EXCHANGE ACT AND RULE203(B) OF REGULATION SHO THEREUNDER. (AS THE SEC NOTED IN ITSORDER, "[A] WILLFUL VIOLATION OF THE SECURITIES LAWS MEANSMERELY 'THAT THE PERSON CHARGED WITH THE DUTY KNOWS WHAT HEIS DOING.' THERE IS NO REQUIREMENT THAT THE ACTOR 'ALSO BE AWARETHAT HE IS VIOLATING ONE OF THE RULES OR ACTS.'" (CITATIONSOMITTED.)) ADDITIONALLY, THE ORDER STATES THAT "THE IMPACT OF[THE FIRM'S] PRACTICES WAS MITIGATED BY CERTAIN FACTORS. FIRST,SOME OF THE LOCATES UBS GRANTED WERE FURNISHED TO CLIENTSWHO DID NOT EXECUTE SHORT SALES USING THE LOCATES UBSGRANTED OR DID SO FOR SHARE AMOUNTS SMALLER THAN THEAMOUNTS FOR WHICH APPROVALS WERE GRANTED. SECOND, SOME OFTHE LENDERS MAY HAVE HAD THE ABILITY TO LEND SUFFICIENTSECURITIES BY THE DELIVERY DATE TO ALLOW UBS TO MEET ITSSETTLEMENT OBLIGATIONS, NOTWITHSTANDING THE INACCURATEDOCUMENTATION OF THE BASIS FOR GRANTING THE LOCATES. FINALLY,UBS WAS GENERALLY ABLE TO MEET ITS SETTLEMENT OBLIGATIONS BYBORROWING STOCK FROM SOURCES OTHER THAN THE LENDERSIDENTIFIED IN ITS LOCATE LOG."


i


Allegations: SECTION 17(A) OF THE EXCHANGE ACT OF 1934 AND RULE 17A-3THEREUNDER, RULES 200(F), 200(G), 203(B)(1) OF REGULATION SHO,FINRA RULES 2010, 7230A, 7330, 7440, 7450(A), 8211, 8213, NASD RULES2110, 3010, 3110(A), 6130, 6954, 6955(A), 8211, 8213: THE FIRM EFFECTEDOR ACCEPTED MILLIONS OF PROPRIETARY AND CUSTOMER SHORT SALEORDERS WITHOUT LOCATES AT VARIOUS TIMES. THE FIRM MISAPPLIEDEXCEPTIONS TO THE LOCATE REQUIREMENT BY IMPROPERLY TREATINGSHORT SALES IN CERTAIN TYPES OF SECURITIES AS EXCEPTIONS TO THELOCATE REQUIREMENT, RESULTING IN SIGNIFICANT VIOLATIONS OFREGULATION SHO. THE FIRM INCORRECTLY PROGRAMMED A TRADINGSYSTEM SO THAT TWO PROPRIETARY TRADING STRATEGIES TREATED ALLSHORT SALE ORDERS IN EXCHANGE TRADED FUNDS (ETFS) AS IF THEYWERE EXCEPTIONS TO REG SHO'S LOCATE REQUIREMENTS. THE FIRMALSO INCORRECTLY PROGRAMMED ANOTHER TRADING SYSTEM TOALLOW SHORT SALE ORDERS IN ETFS TO PROCEED WITHOUT A LOCATE.THE FIRM EFFECTED APPROXIMATELY 680,000 PROPRIETARY SHORT SALEORDERS IN ETFS WITHOUT LOCATES THROUGH THESE TWO TRADINGSYSTEMS. THE FIRM ALSO IMPROPERLY TREATED CERTAIN EQUITYHEDGE TRANSACTIONS EFFECTED BY ITS MARKET MAKING UNIT ASEXCEPTIONS TO REG SHO'S LOCATE REQUIREMENT. SPECIFICALLY, THEFIRM EFFECTED PRINCIPAL SHORT SALES IN EQUITY SECURITIES TOHEDGE ITS RISK IN CONJUNCTION WITH POSITIONS IT ACCUMULATED INCONNECTION WITH ITS MARKET MAKING ACTIVITIES. THE FIRMIMPROPERLY TREATED THESE PRINCIPAL EQUITY HEDGE SHORT SALESAS EXCEPTIONS TO REG SHO'S LOCATE REQUIREMENT. AS A RESULT, THEFIRM IMPROPERLY RELEASED FOR EXECUTION A SIGNIFICANT BUTUNQUANTIFIED NUMBER OF PRINCIPAL EQUITY HEDGE SHORT SALESWITHOUT LOCATES OVER A PERIOD OF NEARLY THREE AND A HALFYEARS. THE FIRM CREATED AND DISTRIBUTED A DAILY LIST OF EQUITYSECURITIES WHICH IT DEEMED "EASY-TO-BORROW" (ETB LISTS) THATIMPROPERLY INCLUDED THRESHOLD AND "HARD-TO-BORROW" (HTB)SECURITIES TO THE FIRM'S PROPRIETARY TRADERS AND CLIENTS,RESULTING IN MORE THAN 900,000 SHORT SALE ORDERS THAT WERERELEASED FOR EXECUTION WITHOUT VALID LOCATES. ALTHOUGH THEETB LISTS WERE ONLY SUPPOSED TO BE RELEASED ONCE FINALIZED,THE FIRM FAILED TO PREVENT PROPRIETARY TRADING DESKS FROMHAVING ACCESS TO ETB LISTS BEFORE HTB SECURITIES HAD BEENREMOVED. THESE PROPRIETARY DESKS WERE ABLE TO AND DIDRELEASE FOR EXECUTION A SIGNIFICANT NUMBER OF SHORT SALEORDERS IN HTB SECURITIES WITHOUT A VALID LOCATE IN MISPLACEDRELIANCE ON THE SECURITIES' APPEARANCE ON THE ETB LIST. THE FIRMALSO PROVIDED THE UNFINISHED ETB LISTS WHICH STILL INCLUDED HTBSECURITIES TO CERTAIN CLIENTS. THE FIRM PROGRAMMED MORE THAN270 CLIENTS WITH THE ABILITY TO ROUTE SHORT SALE ORDERSTHROUGH THE FIRM'S DIRECT EXECUTION SERVICES (DES) PLATFORMFOR EXECUTION WITHOUT FIRST REQUIRING THAT THE DES CLIENTSOBTAIN A LOCATE FROM THE FIRM OR DEMONSTRATE THAT A LOCATEHAD BEEN OBTAINED FROM ANOTHER RECOGNIZED LENDING SOURCE.DES CLIENTS ENTERED APPROXIMATELY 200,000 SHORT SALE ORDERSTHROUGH THE FIRM'S DES PLATFORM WITHOUT LOCATES. DUE TO THEFIRM'S FAILURE TO ESTABLISH AND CONDUCT A MEANINGFUL ANDEFFECTIVE REVIEW OF ITS DES CLIENTS' SHORT SALES UNTIL MID-2009,THE FIRM FAILED TO DETECT THE MAJORITY OF THESE VIOLATIONS.MOREOVER, THE FIRM WAS UNABLE TO IDENTIFY THE TOTAL NUMBER OFITS DES CLIENTS CONFIGURED TO BYPASS REG SHO'S LOCATEREQUIREMENT UNTIL IN OR ABOUT DECEMBER 2009. DESPITE BEINGAWARE THAT ITS ORDER ENTRY SYSTEMS (OESS) DID NOT HAVE THEABILITY TO AUTOMATICALLY PREVENT SHORT SALE ORDERS FROM BEINGRELEASED FOR EXECUTION WITHOUT VALID LOCATES, THE FIRM FAILEDTO DEVELOP EFFECTIVE POST-TRADE REPORTS OR ANY OTHER REVIEWSYSTEM FOR ALL OF ITS CUSTOMER AND PROPRIETARY TRADING TOIDENTIFY SHORT SALES ENTERED INTO ITS OESS WITHOUT VALIDLOCATES. IN CERTAIN CIRCUMSTANCES, THE FIRM'S RISK MANAGEMENTSYSTEMS FAILED TO ACCURATELY REFLECT THE CORRECT TRADERS ANDACCOUNTS IN THE APPROPRIATE TRADING BOOKS. [CONTINUED INCOMMENT]







SECTION 17(A) OF THE EXCHANGE ACT OF 1934 AND RULE 17A-3THEREUNDER, RULES 200(F), 200(G), 203(B)(1) OF REGULATION SHO,FINRA RULES 2010, 7230A, 7330, 7440, 7450(A), 8211, 8213, NASD RULES2110, 3010, 3110(A), 6130, 6954, 6955(A), 8211, 8213: THE FIRM EFFECTEDOR ACCEPTED MILLIONS OF PROPRIETARY AND CUSTOMER SHORT SALEORDERS WITHOUT LOCATES AT VARIOUS TIMES. THE FIRM MISAPPLIEDEXCEPTIONS TO THE LOCATE REQUIREMENT BY IMPROPERLY TREATINGSHORT SALES IN CERTAIN TYPES OF SECURITIES AS EXCEPTIONS TO THELOCATE REQUIREMENT, RESULTING IN SIGNIFICANT VIOLATIONS OFREGULATION SHO. THE FIRM INCORRECTLY PROGRAMMED A TRADINGSYSTEM SO THAT TWO PROPRIETARY TRADING STRATEGIES TREATED ALLSHORT SALE ORDERS IN EXCHANGE TRADED FUNDS (ETFS) AS IF THEYWERE EXCEPTIONS TO REG SHO'S LOCATE REQUIREMENTS. THE FIRMALSO INCORRECTLY PROGRAMMED ANOTHER TRADING SYSTEM TOALLOW SHORT SALE ORDERS IN ETFS TO PROCEED WITHOUT A LOCATE.THE FIRM EFFECTED APPROXIMATELY 680,000 PROPRIETARY SHORT SALEORDERS IN ETFS WITHOUT LOCATES THROUGH THESE TWO TRADINGSYSTEMS. THE FIRM ALSO IMPROPERLY TREATED CERTAIN EQUITYHEDGE TRANSACTIONS EFFECTED BY ITS MARKET MAKING UNIT ASEXCEPTIONS TO REG SHO'S LOCATE REQUIREMENT. SPECIFICALLY, THEFIRM EFFECTED PRINCIPAL SHORT SALES IN EQUITY SECURITIES TOHEDGE ITS RISK IN CONJUNCTION WITH POSITIONS IT ACCUMULATED INCONNECTION WITH ITS MARKET MAKING ACTIVITIES. THE FIRMIMPROPERLY TREATED THESE PRINCIPAL EQUITY HEDGE SHORT SALESAS EXCEPTIONS TO REG SHO'S LOCATE REQUIREMENT. AS A RESULT, THEFIRM IMPROPERLY RELEASED FOR EXECUTION A SIGNIFICANT BUTUNQUANTIFIED NUMBER OF PRINCIPAL EQUITY HEDGE SHORT SALESWITHOUT LOCATES OVER A PERIOD OF NEARLY THREE AND A HALFYEARS. THE FIRM CREATED AND DISTRIBUTED A DAILY LIST OF EQUITYSECURITIES WHICH IT DEEMED "EASY-TO-BORROW" (ETB LISTS) THATIMPROPERLY INCLUDED THRESHOLD AND "HARD-TO-BORROW" (HTB)SECURITIES TO THE FIRM'S PROPRIETARY TRADERS AND CLIENTS,RESULTING IN MORE THAN 900,000 SHORT SALE ORDERS THAT WERERELEASED FOR EXECUTION WITHOUT VALID LOCATES. ALTHOUGH THEETB LISTS WERE ONLY SUPPOSED TO BE RELEASED ONCE FINALIZED,THE FIRM FAILED TO PREVENT PROPRIETARY TRADING DESKS FROMHAVING ACCESS TO ETB LISTS BEFORE HTB SECURITIES HAD BEENREMOVED. THESE PROPRIETARY DESKS WERE ABLE TO AND DIDRELEASE FOR EXECUTION A SIGNIFICANT NUMBER OF SHORT SALEORDERS IN HTB SECURITIES WITHOUT A VALID LOCATE IN MISPLACEDRELIANCE ON THE SECURITIES' APPEARANCE ON THE ETB LIST. THE FIRMALSO PROVIDED THE UNFINISHED ETB LISTS WHICH STILL INCLUDED HTBSECURITIES TO CERTAIN CLIENTS. THE FIRM PROGRAMMED MORE THAN270 CLIENTS WITH THE ABILITY TO ROUTE SHORT SALE ORDERSTHROUGH THE FIRM'S DIRECT EXECUTION SERVICES (DES) PLATFORMFOR EXECUTION WITHOUT FIRST REQUIRING THAT THE DES CLIENTSOBTAIN A LOCATE FROM THE FIRM OR DEMONSTRATE THAT A LOCATEHAD BEEN OBTAINED FROM ANOTHER RECOGNIZED LENDING SOURCE.DES CLIENTS ENTERED APPROXIMATELY 200,000 SHORT SALE ORDERSTHROUGH THE FIRM'S DES PLATFORM WITHOUT LOCATES. DUE TO THEFIRM'S FAILURE TO ESTABLISH AND CONDUCT A MEANINGFUL ANDEFFECTIVE REVIEW OF ITS DES CLIENTS' SHORT SALES UNTIL MID-2009,THE FIRM FAILED TO DETECT THE MAJORITY OF THESE VIOLATIONS.MOREOVER, THE FIRM WAS UNABLE TO IDENTIFY THE TOTAL NUMBER OFITS DES CLIENTS CONFIGURED TO BYPASS REG SHO'S LOCATEREQUIREMENT UNTIL IN OR ABOUT DECEMBER 2009. DESPITE BEINGAWARE THAT ITS ORDER ENTRY SYSTEMS (OESS) DID NOT HAVE THEABILITY TO AUTOMATICALLY PREVENT SHORT SALE ORDERS FROM BEINGRELEASED FOR EXECUTION WITHOUT VALID LOCATES, THE FIRM FAILEDTO DEVELOP EFFECTIVE POST-TRADE REPORTS OR ANY OTHER REVIEWSYSTEM FOR ALL OF ITS CUSTOMER AND PROPRIETARY TRADING TOIDENTIFY SHORT SALES ENTERED INTO ITS OESS WITHOUT VALIDLOCATES. IN CERTAIN CIRCUMSTANCES, THE FIRM'S RISK MANAGEMENTSYSTEMS FAILED TO ACCURATELY REFLECT THE CORRECT TRADERS ANDACCOUNTS IN THE APPROPRIATE TRADING BOOKS. [CONTINUED INCOMMENT] 253©2022 FINRA. All rights reserved. Report about UBS SECURITIES LLC





Initiated By: FINRA


Other


N/A




Other Product Type(s): UNSPECIFIED EQUITIES

SECTION 17(A) OF THE EXCHANGE ACT OF 1934 AND RULE 17A-3THEREUNDER, RULES 200(F), 200(G), 203(B)(1) OF REGULATION SHO,FINRA RULES 2010, 7230A, 7330, 7440, 7450(A), 8211, 8213, NASD RULES2110, 3010, 3110(A), 6130, 6954, 6955(A), 8211, 8213: THE FIRM EFFECTEDOR ACCEPTED MILLIONS OF PROPRIETARY AND CUSTOMER SHORT SALEORDERS WITHOUT LOCATES AT VARIOUS TIMES. THE FIRM MISAPPLIEDEXCEPTIONS TO THE LOCATE REQUIREMENT BY IMPROPERLY TREATINGSHORT SALES IN CERTAIN TYPES OF SECURITIES AS EXCEPTIONS TO THELOCATE REQUIREMENT, RESULTING IN SIGNIFICANT VIOLATIONS OFREGULATION SHO. THE FIRM INCORRECTLY PROGRAMMED A TRADINGSYSTEM SO THAT TWO PROPRIETARY TRADING STRATEGIES TREATED ALLSHORT SALE ORDERS IN EXCHANGE TRADED FUNDS (ETFS) AS IF THEYWERE EXCEPTIONS TO REG SHO'S LOCATE REQUIREMENTS. THE FIRMALSO INCORRECTLY PROGRAMMED ANOTHER TRADING SYSTEM TOALLOW SHORT SALE ORDERS IN ETFS TO PROCEED WITHOUT A LOCATE.THE FIRM EFFECTED APPROXIMATELY 680,000 PROPRIETARY SHORT SALEORDERS IN ETFS WITHOUT LOCATES THROUGH THESE TWO TRADINGSYSTEMS. THE FIRM ALSO IMPROPERLY TREATED CERTAIN EQUITYHEDGE TRANSACTIONS EFFECTED BY ITS MARKET MAKING UNIT ASEXCEPTIONS TO REG SHO'S LOCATE REQUIREMENT. SPECIFICALLY, THEFIRM EFFECTED PRINCIPAL SHORT SALES IN EQUITY SECURITIES TOHEDGE ITS RISK IN CONJUNCTION WITH POSITIONS IT ACCUMULATED INCONNECTION WITH ITS MARKET MAKING ACTIVITIES. THE FIRMIMPROPERLY TREATED THESE PRINCIPAL EQUITY HEDGE SHORT SALESAS EXCEPTIONS TO REG SHO'S LOCATE REQUIREMENT. AS A RESULT, THEFIRM IMPROPERLY RELEASED FOR EXECUTION A SIGNIFICANT BUTUNQUANTIFIED NUMBER OF PRINCIPAL EQUITY HEDGE SHORT SALESWITHOUT LOCATES OVER A PERIOD OF NEARLY THREE AND A HALFYEARS. THE FIRM CREATED AND DISTRIBUTED A DAILY LIST OF EQUITYSECURITIES WHICH IT DEEMED "EASY-TO-BORROW" (ETB LISTS) THATIMPROPERLY INCLUDED THRESHOLD AND "HARD-TO-BORROW" (HTB)SECURITIES TO THE FIRM'S PROPRIETARY TRADERS AND CLIENTS,RESULTING IN MORE THAN 900,000 SHORT SALE ORDERS THAT WERERELEASED FOR EXECUTION WITHOUT VALID LOCATES. ALTHOUGH THEETB LISTS WERE ONLY SUPPOSED TO BE RELEASED ONCE FINALIZED,THE FIRM FAILED TO PREVENT PROPRIETARY TRADING DESKS FROMHAVING ACCESS TO ETB LISTS BEFORE HTB SECURITIES HAD BEENREMOVED. THESE PROPRIETARY DESKS WERE ABLE TO AND DIDRELEASE FOR EXECUTION A SIGNIFICANT NUMBER OF SHORT SALEORDERS IN HTB SECURITIES WITHOUT A VALID LOCATE IN MISPLACEDRELIANCE ON THE SECURITIES' APPEARANCE ON THE ETB LIST. THE FIRMALSO PROVIDED THE UNFINISHED ETB LISTS WHICH STILL INCLUDED HTBSECURITIES TO CERTAIN CLIENTS. THE FIRM PROGRAMMED MORE THAN270 CLIENTS WITH THE ABILITY TO ROUTE SHORT SALE ORDERSTHROUGH THE FIRM'S DIRECT EXECUTION SERVICES (DES) PLATFORMFOR EXECUTION WITHOUT FIRST REQUIRING THAT THE DES CLIENTSOBTAIN A LOCATE FROM THE FIRM OR DEMONSTRATE THAT A LOCATEHAD BEEN OBTAINED FROM ANOTHER RECOGNIZED LENDING SOURCE.DES CLIENTS ENTERED APPROXIMATELY 200,000 SHORT SALE ORDERSTHROUGH THE FIRM'S DES PLATFORM WITHOUT LOCATES. DUE TO THEFIRM'S FAILURE TO ESTABLISH AND CONDUCT A MEANINGFUL ANDEFFECTIVE REVIEW OF ITS DES CLIENTS' SHORT SALES UNTIL MID-2009,THE FIRM FAILED TO DETECT THE MAJORITY OF THESE VIOLATIONS.MOREOVER, THE FIRM WAS UNABLE TO IDENTIFY THE TOTAL NUMBER OFITS DES CLIENTS CONFIGURED TO BYPASS REG SHO'S LOCATEREQUIREMENT UNTIL IN OR ABOUT DECEMBER 2009. DESPITE BEINGAWARE THAT ITS ORDER ENTRY SYSTEMS (OESS) DID NOT HAVE THEABILITY TO AUTOMATICALLY PREVENT SHORT SALE ORDERS FROM BEINGRELEASED FOR EXECUTION WITHOUT VALID LOCATES, THE FIRM FAILEDTO DEVELOP EFFECTIVE POST-TRADE REPORTS OR ANY OTHER REVIEWSYSTEM FOR ALL OF ITS CUSTOMER AND PROPRIETARY TRADING TOIDENTIFY SHORT SALES ENTERED INTO ITS OESS WITHOUT VALIDLOCATES. IN CERTAIN CIRCUMSTANCES, THE FIRM'S RISK MANAGEMENTSYSTEMS FAILED TO ACCURATELY REFLECT THE CORRECT TRADERS ANDACCOUNTS IN THE APPROPRIATE TRADING BOOKS. [CONTINUED INCOMMENT]


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE IT IS CENSURED AND FINED $12,000,000. FINRA NOTES THATAS THE SYSTEM-RELATED LOCATE AND ORDER MARKING PROBLEMSWERE IDENTIFIED DURING THE COURSE OF FINRA'S INVESTIGATION, THEFIRM IMPLEMENTED CHANGES TO ITS SYSTEMS AND PROCEDURES THATWERE DESIGNED TO PREVENT A RECURRENCE OF ITS VIOLATIONS. FINRAACKNOWLEDGES THAT IN 2010, THE FIRM UNDERTOOK AN INTERNALREVIEW OF ITS SUPERVISORY POLICIES, PROCEDURES AND SYSTEMSRELATING TO REG SHO. THE FIRM REPORTED FINDINGS OF ITS INTERNALINVESTIGATION TO FINRA. THE SANCTIONS REFLECT THE CREDIT THATTHE FIRM HAS BEEN GIVEN FOR CONDUCTING AN INVESTIGATION OFTHESE ISSUES AND PROVIDING THE RESULTS TO FINRA.

Regulator Statement [CONTINUED FROM ALLEGATIONS]: AS A RESULT, THE FIRM'SAGGREGATION UNITS, AS THEY FUNCTIONED THROUGH THE FIRM'S RISKMANAGEMENT SYSTEMS IN CALCULATING NET POSITIONS, WEREDEFICIENT AND INACCURATE. AS A RESULT OF THESE PROBLEMS, THEFIRM FAILED TO MAINTAIN INDEPENDENT AGGREGATION UNITS. THEFIRM'S AGGREGATION UNIT FAILURES CREATED THE PROBABILITY THATSALE ORDERS WHICH SHOULD HAVE BEEN MARKED AS "SHORT" WEREINSTEAD MISMARKED AS "LONG," THEREBY RESULTING IN UNQUANTIFIEDVIOLATIONS OF REG SHO'S LOCATE REQUIREMENT. THE FIRM FAILED TOMAINTAIN ALL REQUIRED WRITTEN PLANS OF ORGANIZATION FOR EACHOF ITS 21 AGGREGATION UNITS. THE FEW VERSIONS OF THE WRITTENPLANS OF ORGANIZATION THE FIRM DID MAINTAIN CONTAINEDINACCURACIES IN THAT CERTAIN TRADERS AND ACCOUNTS REFLECTEDIN THE FIRM'S RISK MANAGEMENT SYSTEMS WERE NOT ON THE PLAN,CERTAIN ACCOUNTS WERE ASSIGNED TO THE INCORRECT AGGREGATIONUNIT ON THE WRITTEN PLAN, AND THE PLANS REFLECTED CERTAINACCOUNTS THAT WERE NOT INCLUDED IN THE RISK MANAGEMENTSYSTEMS. THE FIRM MISMARKED MORE THAN 10 MILLION SALE ORDERS,INCLUDING SHORT SALES MISMARKED AS "LONG" THAT ALSO VIOLATEDREG SHO'S LOCATE REQUIREMENT. THE FIRM MISMARKED SALE ORDERSTHAT FLOWED THROUGH TO THE FIRM'S BLUE SHEET SUBMISSIONS ANDCAUSED THE FIRM TO MAKE INACCURATE BLUE SHEET SUBMISSIONS OFTRADING DATA TO FINRA. THE FIRM MISMARKED SALE ORDERS THATFLOWED THROUGH TO THE FIRM'S AUTOMATED CONFIRMATIONTRANSACTION SERVICE (ACT) AND CAUSED THE INACCURATEREPORTING OF SUCH SALE ORDERS. THE FIRM MISMARKED SALEORDERS THAT FLOWED THROUGH TO THE FIRM'S ORDER AUDIT TRAILSYSTEM (OATS) REPORTS AND CAUSED THE INACCURATE TRANSMITTALOF SUCH SALE ORDERS. THE FIRM FAILED TO CREATE AND MAINTAINACCURATE VERSIONS OF ITS ETB LISTS, FAILED TO MAINTAIN ACCURATEVERSIONS OF ITS WRITTEN PLANS OF ORGANIZATION FOR ITSAGGREGATION UNITS, AND FAILED TO MAINTAIN ACCURATELY MARKEDSALE ORDERS. THE FIRM FAILED TO DEVELOP AN ADEQUATE SYSTEM OFOVERSIGHT TO MONITOR THE PERFORMANCE OF ITS REG SHO-RELATEDRESPONSIBILITIES ASSIGNED TO ITS EQUITIES TRADING DESKS' HEADSAND REGULATORY CONTROL GROUP. IN ADDITION, THE FIRM FAILED TOESTABLISH ADEQUATE POLICIES AND PROCEDURES FOR THEESCALATION OF ANY POTENTIAL REG SHO-RELATED ISSUES OR "REDFLAGS" TO APPROPRIATE PERSONS OUTSIDE OF THE TRADING DESKS.THE FIRM'S WRITTEN SUPERVISORY PROCEDURES (WSPS) RELATING TOREG SHO WERE DEFECTIVE IN SEVERAL WAYS. AMONG OTHER THINGS,THE WSPS: FAILED TO CLEARLY DESCRIBED THE REVIEW TO BEPERFORMED; DID NOT ADEQUATELY EXPLAIN HOW SUPERVISORSSHOULD PERFORM REVIEWS; FAILED TO INCLUDE PROTOCOLS FORESCALATING ISSUES NOTED BY SUPERVISORS IN THE COURSE OF THEIRRESPONSIBILITIES; AND DID NOT CONSISTENTLY INCLUDE INFORMATIONON HOW SUPERVISORS WERE TO DOCUMENT THEIR REG SHO REVIEWS.THE FIRM FAILED TO REASONABLY SUPERVISE AND HAVE ADEQUATEPOLICIES AND PROCEDURES TO: SUPERVISE THE APPLICATION OFEXCEPTIONS TO THE LOCATE REQUIREMENT; TO MAINTAIN INDEPENDENTAGGREGATION UNITS AND ADEQUATE WRITTEN PLANS OF ORGANIZATIONFOR ITS 21 AGGREGATION UNITS; TO PROPERLY MARK SALE ORDERS;AND TO MONITOR OR APPROVE IT-RELATED ADDITIONS OR CHANGES TOITS SYSTEMS. THE FIRM FAILED TO REASONABLY SUPERVISE: THECOMPILATION AND DISTRIBUTION OF ITS ETB LISTS; ITS COMPLIANCEWITH REG SHO'S LOCATE REQUIREMENT; AND TO MAINTAIN ACCURATEBOOKS AND RECORDS AND SUBMIT ACCURATE TRADE DATA ON ITS BLUESHEETS, ACT AND OATS REPORTS. THE FIRM FAILED TO: HAVE ASUPERVISORY PROCESS IN PLACE TO MONITOR THOSE DES CLIENTS'TRADING FOR COMPLIANCE WITH THE LOCATE REQUIREMENT;ADEQUATELY EDUCATE PERSONNEL WITH REGARD TO THEREQUIREMENTS OF REG SHO; AND PERFORM ADEQUATE OVERSIGHT OFITS EQUITIES TRADING DESKS TO DETERMINE WHETHER ADEQUATEPOLICIES, PROCEDURES AND SYSTEMS FOR REG SHO COMPLIANCE HADBEEN ESTABLISHED AND/OR REVIEWS WERE OCCURRING ON SUCHDESKS.


No









[CONTINUED FROM ALLEGATIONS]: AS A RESULT, THE FIRM'SAGGREGATION UNITS, AS THEY FUNCTIONED THROUGH THE FIRM'S RISKMANAGEMENT SYSTEMS IN CALCULATING NET POSITIONS, WEREDEFICIENT AND INACCURATE. AS A RESULT OF THESE PROBLEMS, THEFIRM FAILED TO MAINTAIN INDEPENDENT AGGREGATION UNITS. THEFIRM'S AGGREGATION UNIT FAILURES CREATED THE PROBABILITY THATSALE ORDERS WHICH SHOULD HAVE BEEN MARKED AS "SHORT" WEREINSTEAD MISMARKED AS "LONG," THEREBY RESULTING IN UNQUANTIFIEDVIOLATIONS OF REG SHO'S LOCATE REQUIREMENT. THE FIRM FAILED TOMAINTAIN ALL REQUIRED WRITTEN PLANS OF ORGANIZATION FOR EACHOF ITS 21 AGGREGATION UNITS. THE FEW VERSIONS OF THE WRITTENPLANS OF ORGANIZATION THE FIRM DID MAINTAIN CONTAINEDINACCURACIES IN THAT CERTAIN TRADERS AND ACCOUNTS REFLECTEDIN THE FIRM'S RISK MANAGEMENT SYSTEMS WERE NOT ON THE PLAN,CERTAIN ACCOUNTS WERE ASSIGNED TO THE INCORRECT AGGREGATIONUNIT ON THE WRITTEN PLAN, AND THE PLANS REFLECTED CERTAINACCOUNTS THAT WERE NOT INCLUDED IN THE RISK MANAGEMENTSYSTEMS. THE FIRM MISMARKED MORE THAN 10 MILLION SALE ORDERS,INCLUDING SHORT SALES MISMARKED AS "LONG" THAT ALSO VIOLATEDREG SHO'S LOCATE REQUIREMENT. THE FIRM MISMARKED SALE ORDERSTHAT FLOWED THROUGH TO THE FIRM'S BLUE SHEET SUBMISSIONS ANDCAUSED THE FIRM TO MAKE INACCURATE BLUE SHEET SUBMISSIONS OFTRADING DATA TO FINRA. THE FIRM MISMARKED SALE ORDERS THATFLOWED THROUGH TO THE FIRM'S AUTOMATED CONFIRMATIONTRANSACTION SERVICE (ACT) AND CAUSED THE INACCURATEREPORTING OF SUCH SALE ORDERS. THE FIRM MISMARKED SALEORDERS THAT FLOWED THROUGH TO THE FIRM'S ORDER AUDIT TRAILSYSTEM (OATS) REPORTS AND CAUSED THE INACCURATE TRANSMITTALOF SUCH SALE ORDERS. THE FIRM FAILED TO CREATE AND MAINTAINACCURATE VERSIONS OF ITS ETB LISTS, FAILED TO MAINTAIN ACCURATEVERSIONS OF ITS WRITTEN PLANS OF ORGANIZATION FOR ITSAGGREGATION UNITS, AND FAILED TO MAINTAIN ACCURATELY MARKEDSALE ORDERS. THE FIRM FAILED TO DEVELOP AN ADEQUATE SYSTEM OFOVERSIGHT TO MONITOR THE PERFORMANCE OF ITS REG SHO-RELATEDRESPONSIBILITIES ASSIGNED TO ITS EQUITIES TRADING DESKS' HEADSAND REGULATORY CONTROL GROUP. IN ADDITION, THE FIRM FAILED TOESTABLISH ADEQUATE POLICIES AND PROCEDURES FOR THEESCALATION OF ANY POTENTIAL REG SHO-RELATED ISSUES OR "REDFLAGS" TO APPROPRIATE PERSONS OUTSIDE OF THE TRADING DESKS.THE FIRM'S WRITTEN SUPERVISORY PROCEDURES (WSPS) RELATING TOREG SHO WERE DEFECTIVE IN SEVERAL WAYS. AMONG OTHER THINGS,THE WSPS: FAILED TO CLEARLY DESCRIBED THE REVIEW TO BEPERFORMED; DID NOT ADEQUATELY EXPLAIN HOW SUPERVISORSSHOULD PERFORM REVIEWS; FAILED TO INCLUDE PROTOCOLS FORESCALATING ISSUES NOTED BY SUPERVISORS IN THE COURSE OF THEIRRESPONSIBILITIES; AND DID NOT CONSISTENTLY INCLUDE INFORMATIONON HOW SUPERVISORS WERE TO DOCUMENT THEIR REG SHO REVIEWS.THE FIRM FAILED TO REASONABLY SUPERVISE AND HAVE ADEQUATEPOLICIES AND PROCEDURES TO: SUPERVISE THE APPLICATION OFEXCEPTIONS TO THE LOCATE REQUIREMENT; TO MAINTAIN INDEPENDENTAGGREGATION UNITS AND ADEQUATE WRITTEN PLANS OF ORGANIZATIONFOR ITS 21 AGGREGATION UNITS; TO PROPERLY MARK SALE ORDERS;AND TO MONITOR OR APPROVE IT-RELATED ADDITIONS OR CHANGES TOITS SYSTEMS. THE FIRM FAILED TO REASONABLY SUPERVISE: THECOMPILATION AND DISTRIBUTION OF ITS ETB LISTS; ITS COMPLIANCEWITH REG SHO'S LOCATE REQUIREMENT; AND TO MAINTAIN ACCURATEBOOKS AND RECORDS AND SUBMIT ACCURATE TRADE DATA ON ITS BLUESHEETS, ACT AND OATS REPORTS. THE FIRM FAILED TO: HAVE ASUPERVISORY PROCESS IN PLACE TO MONITOR THOSE DES CLIENTS'TRADING FOR COMPLIANCE WITH THE LOCATE REQUIREMENT;ADEQUATELY EDUCATE PERSONNEL WITH REGARD TO THEREQUIREMENTS OF REG SHO; AND PERFORM ADEQUATE OVERSIGHT OFITS EQUITIES TRADING DESKS TO DETERMINE WHETHER ADEQUATEPOLICIES, PROCEDURES AND SYSTEMS FOR REG SHO COMPLIANCE HADBEEN ESTABLISHED AND/OR REVIEWS WERE OCCURRING ON SUCHDESKS.






[CONTINUED FROM ALLEGATIONS]: AS A RESULT, THE FIRM'SAGGREGATION UNITS, AS THEY FUNCTIONED THROUGH THE FIRM'S RISKMANAGEMENT SYSTEMS IN CALCULATING NET POSITIONS, WEREDEFICIENT AND INACCURATE. AS A RESULT OF THESE PROBLEMS, THEFIRM FAILED TO MAINTAIN INDEPENDENT AGGREGATION UNITS. THEFIRM'S AGGREGATION UNIT FAILURES CREATED THE PROBABILITY THATSALE ORDERS WHICH SHOULD HAVE BEEN MARKED AS "SHORT" WEREINSTEAD MISMARKED AS "LONG," THEREBY RESULTING IN UNQUANTIFIEDVIOLATIONS OF REG SHO'S LOCATE REQUIREMENT. THE FIRM FAILED TOMAINTAIN ALL REQUIRED WRITTEN PLANS OF ORGANIZATION FOR EACHOF ITS 21 AGGREGATION UNITS. THE FEW VERSIONS OF THE WRITTENPLANS OF ORGANIZATION THE FIRM DID MAINTAIN CONTAINEDINACCURACIES IN THAT CERTAIN TRADERS AND ACCOUNTS REFLECTEDIN THE FIRM'S RISK MANAGEMENT SYSTEMS WERE NOT ON THE PLAN,CERTAIN ACCOUNTS WERE ASSIGNED TO THE INCORRECT AGGREGATIONUNIT ON THE WRITTEN PLAN, AND THE PLANS REFLECTED CERTAINACCOUNTS THAT WERE NOT INCLUDED IN THE RISK MANAGEMENTSYSTEMS. THE FIRM MISMARKED MORE THAN 10 MILLION SALE ORDERS,INCLUDING SHORT SALES MISMARKED AS "LONG" THAT ALSO VIOLATEDREG SHO'S LOCATE REQUIREMENT. THE FIRM MISMARKED SALE ORDERSTHAT FLOWED THROUGH TO THE FIRM'S BLUE SHEET SUBMISSIONS ANDCAUSED THE FIRM TO MAKE INACCURATE BLUE SHEET SUBMISSIONS OFTRADING DATA TO FINRA. THE FIRM MISMARKED SALE ORDERS THATFLOWED THROUGH TO THE FIRM'S AUTOMATED CONFIRMATIONTRANSACTION SERVICE (ACT) AND CAUSED THE INACCURATEREPORTING OF SUCH SALE ORDERS. THE FIRM MISMARKED SALEORDERS THAT FLOWED THROUGH TO THE FIRM'S ORDER AUDIT TRAILSYSTEM (OATS) REPORTS AND CAUSED THE INACCURATE TRANSMITTALOF SUCH SALE ORDERS. THE FIRM FAILED TO CREATE AND MAINTAINACCURATE VERSIONS OF ITS ETB LISTS, FAILED TO MAINTAIN ACCURATEVERSIONS OF ITS WRITTEN PLANS OF ORGANIZATION FOR ITSAGGREGATION UNITS, AND FAILED TO MAINTAIN ACCURATELY MARKEDSALE ORDERS. THE FIRM FAILED TO DEVELOP AN ADEQUATE SYSTEM OFOVERSIGHT TO MONITOR THE PERFORMANCE OF ITS REG SHO-RELATEDRESPONSIBILITIES ASSIGNED TO ITS EQUITIES TRADING DESKS' HEADSAND REGULATORY CONTROL GROUP. IN ADDITION, THE FIRM FAILED TOESTABLISH ADEQUATE POLICIES AND PROCEDURES FOR THEESCALATION OF ANY POTENTIAL REG SHO-RELATED ISSUES OR "REDFLAGS" TO APPROPRIATE PERSONS OUTSIDE OF THE TRADING DESKS.THE FIRM'S WRITTEN SUPERVISORY PROCEDURES (WSPS) RELATING TOREG SHO WERE DEFECTIVE IN SEVERAL WAYS. AMONG OTHER THINGS,THE WSPS: FAILED TO CLEARLY DESCRIBED THE REVIEW TO BEPERFORMED; DID NOT ADEQUATELY EXPLAIN HOW SUPERVISORSSHOULD PERFORM REVIEWS; FAILED TO INCLUDE PROTOCOLS FORESCALATING ISSUES NOTED BY SUPERVISORS IN THE COURSE OF THEIRRESPONSIBILITIES; AND DID NOT CONSISTENTLY INCLUDE INFORMATIONON HOW SUPERVISORS WERE TO DOCUMENT THEIR REG SHO REVIEWS.THE FIRM FAILED TO REASONABLY SUPERVISE AND HAVE ADEQUATEPOLICIES AND PROCEDURES TO: SUPERVISE THE APPLICATION OFEXCEPTIONS TO THE LOCATE REQUIREMENT; TO MAINTAIN INDEPENDENTAGGREGATION UNITS AND ADEQUATE WRITTEN PLANS OF ORGANIZATIONFOR ITS 21 AGGREGATION UNITS; TO PROPERLY MARK SALE ORDERS;AND TO MONITOR OR APPROVE IT-RELATED ADDITIONS OR CHANGES TOITS SYSTEMS. THE FIRM FAILED TO REASONABLY SUPERVISE: THECOMPILATION AND DISTRIBUTION OF ITS ETB LISTS; ITS COMPLIANCEWITH REG SHO'S LOCATE REQUIREMENT; AND TO MAINTAIN ACCURATEBOOKS AND RECORDS AND SUBMIT ACCURATE TRADE DATA ON ITS BLUESHEETS, ACT AND OATS REPORTS. THE FIRM FAILED TO: HAVE ASUPERVISORY PROCESS IN PLACE TO MONITOR THOSE DES CLIENTS'TRADING FOR COMPLIANCE WITH THE LOCATE REQUIREMENT;ADEQUATELY EDUCATE PERSONNEL WITH REGARD TO THEREQUIREMENTS OF REG SHO; AND PERFORM ADEQUATE OVERSIGHT OFITS EQUITIES TRADING DESKS TO DETERMINE WHETHER ADEQUATEPOLICIES, PROCEDURES AND SYSTEMS FOR REG SHO COMPLIANCE HADBEEN ESTABLISHED AND/OR REVIEWS WERE OCCURRING ON SUCHDESKS.


Initiated By: FINRA




CENSURE




Other Product Type(s): UNSPECIFIED EQUITIES

Allegations: FINRA ALLEGED THAT UBS FAILED TO COMPLY WITH REG SHO'S "LOCATE"REQUIREMENT AND FAILED TO PROPERLY MAINTAIN ITS AGGREGATIONUNITS AND MARK ORDERS CORRECTLY AS REQUIRED BY REG SHO.FINRA ALSO ALLEGED THAT UBS FAILED TO ESTABLISH AND MAINTAIN AREASONABLE SUPERVISORY SYSTEM FOR REG SHO COMPLIANCE, ANDFINRA ALLEGED THAT UBS HAD SIGNIFICANT REPORTING AND RECORDKEEPING VIOLATIONS RESULTING FROM THE ABOVE DESCRIBED ISSUES.












Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, UBS SECURITIES LLCAGREED TO A CENSURE AND FINE OF USD 12 MILLION WITH FINRA.

Firm Statement FINRA NOTES THAT AS THE SYSTEM RELATED LOCATE AND ORDERMARKING PROBLEMS WERE IDENTIFIED DURING THE COURSE OF FINRA'SINVESTIGATION, THE FIRM IMPLEMENTED CHANGES TO ITS SYSTEMS ANDPROCEDURES THAT WERE DESIGNED TO PREVENT A RECURRENCE OFITS VIOLATIONS. FINRA ACKNOWLEDGES THAT IN 2010, THE FIRMUNDERTOOK AN INTERNAL REVIEW OF ITS SUPERVISORY POLICIES,PROCEDURES AND SYSTEMS RELATING TO REG SHO. THE FIRMREPORTED FINDINGS OF ITS INTERNAL INVESTIGATION TO FINRA. THESANCTIONS REFLECT THE CREDIT THAT THE FIRM HAS BEEN GIVEN FORCONDUCTING AN INVESTIGATION OF THESE ISSUES AND PROVIDING THERESULTS TOFINRA.



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Initiated By: SOUTH CAROLINA OFFICE OF THE ATTORNEY GENERAL SECURITIESDIVISION





Docket/Case Number:






Resolution: Consent









Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $ 390,657.47 TO SOUTH CAROLINA.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,SOUTH CAROLINA WILL RECEIVE A TOTAL PAYMENT OF $390,657.47 FROMUBS, FROM A TOTAL FINE OF $75MMPREVIOUSLY AGREED UPON WITH THE STATE OF MASSACHUSETTS ANDTHE NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION. THISFILING FURTHER CLARIFIES OCCURRENCE NUMBER 1408435 PREVIOUSLYFILED.



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Initiated By: DEPARTMENT OF BUSINESS REGULATION STATE OF RHODE ISLAND





Docket/Case Number:






Resolution: Consent









Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $247,677.36 TO RHODE ISLAND.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,RHODE ISLAND WILL RECEIVE A TOTAL PAYMENT OF $247,677.36 FROMUBS, FROM A TOTAL FINE OF $75MMPREVIOUSLY AGREED UPON WITH THE STATE OF MASSACHUSETTS ANDTHE NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION. THISFILING FURTHER CLARIFIES OCCURRENCE NUMBER 1408435 PREVIOUSLYFILED.



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Initiated By: OKLAHOMA DEPARTMENT OF SECURITIES


Cease and Desist




URL for Regulatory Action:



Allegations: FAILURE TO SUPERVISE; DISHONEST AND UNETHICAL PRACTICES.



Resolution: Consent







Other Sanctions Ordered: BUY BACK OF ELIGIBLE ARS FROM ELIGIBLE CUSTOMERS.

Sanction Details: BUY BACK OF ELIGIBLE ARS FROM ELIGIBLE CUSTOMERS. CIVIL PENALTYAND PAYMENT FOR INVESTOR EDUCATION REVOLVING FUND WERE PAIDIN FULL

Regulator Statement MULTI-STATE INVESTIGATION COORDINATED BY NASAA, CONCERNINGAUCTION RATE SECURITIES.


No

Sanctions Ordered: Monetary/Fine $274,539.17Cease and Desist/Injunction


Initiated By: OKLAHOMA DEPARTMENT OF SECURITIES











Resolution:



Consent







Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $274,539.17 TO OKLAHOMA.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,OKLAHOMA WILL RECEIVE A TOTAL PAYMENT OF $274,539.17 FROM UBS,FROM A TOTAL FINE OF $75MMPREVIOUSLY AGREED UPON WITH THE STATE OF MASSACHUSETTS ANDTHE NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION. THISFILING FURTHER CLARIFIES OCCURRENCE NUMBER 1408435 PREVIOUSLYFILED.


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Initiated By: NEVADA SECRETARY OF STATE SECURITIES DIVISION





Docket/Case Number:






Resolution:


Sanctions Ordered: Monetary/Fine $1,099,850.65Disgorgement/RestitutionCease and Desist/Injunction

Consent







Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $1,099,850.65 TO NEVADA.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,NEVADA WILL RECEIVE A TOTAL PAYMENT OF $1,099,850.65 FROM UBS,FROM A TOTAL FINE OF $75MMPREVIOUSLY AGREED UPON WITH THE STATE OF MASSACHUSETTS ANDTHE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION. THISFILING FURTHER CLARIFIES OCCURRENCE NUMBER 1408435 PREVIOUSLYFILED.


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Initiated By: MINNESOTA DEPARTMENT OF COMMERCE





Docket/Case Number:






Resolution:



Consent







Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $2,012,922.92 TOMINNESOTA.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,MINNESOTA WILL RECEIVE A TOTAL PAYMENT OF $2,012,922.92 FROM UBS,FROM A TOTAL FINE OF $75MMPREVIOUSLY AGREED UPON WITH THE STATE OF MASSACHUSETTS ANDTHE NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION. THISFILING FURTHER CLARIFIES OCCURRENCE NUMBER 1408435 PREVIOUSLYFILED.


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Initiated By: KANSAS OFFICE OF THE SECURITIES COMMISSIONER





Docket/Case Number:






Resolution:


Consent







Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $579,165.76 TO KANSAS.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,KANSAS WILL RECEIVE A TOTAL PAYMENT OF $579,165.76 FROM UBS,FROM A TOTAL FINE OF $75MMPREVIOUSLY AGREED UPON WITH THE STATE OF MASSACHUSETTS ANDTHE NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION. THISFILING FURTHER CLARIFIES OCCURRENCE NUMBER 1408435 PREVIOUSLYFILED.

Monetary/Fine $579,165.76Disgorgement/RestitutionCease and Desist/Injunction


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Initiated By: ALASKA DEPT. OF COMMUNITY AND ECONOMIC DEVELOPMENT DIVISIONOF BANKING, SECURITIES AND CORPORATIONS





Docket/Case Number:






Resolution:


Consent







Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $733,465.61 TO ALASKA.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,ALASKA WILL RECEIVE A TOTAL PAYMENT OF $733,465.61 FROM UBS,FROM A TOTAL FINE OF $75MMPREVIOUSLY AGREED UPON WITH THE STATE OF MASSACHUSETTS ANDTHE NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION. THISFILING FURTHER CLARIFIES OCCURRENCE NUMBER 1408435 PREVIOUSLYFILED.



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Initiated By: ILLINOIS OFFICE OF THE SECRETARY OF STATE SECURITIES DEPARTMENT





Docket/Case Number:






Resolution:


Stipulation and Consent







Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $3,359,459.67 TO ILLINOIS.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,ILLINOIS WILL RECEIVE A TOTAL PAYMENT OF $3,359,459.67 FROM UBS,FROM A TOTAL FINE OF $75MMPREVIOUSLY AGREED UPON WITH THE STATE OF MASSACHUSETTS ANDTHE NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION. THISFILING FURTHER CLARIFIES OCCURRENCE NUMBER 1408435 PREVIOUSLYFILED.



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Initiated By: WYOMING SECRETARY OF STATE SECURITIES DIVISION





Docket/Case Number:






Resolution:


Consent







Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $288,945.81 TO WYOMING.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,WYOMING WILL RECEIVE A TOTAL PAYMENT OF $288,945.81 FROM UBS,FROM A TOTAL FINE OF$75MM PREVIOUSLY AGREED UPON WITH THE STATE OFMASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION. THIS FILING FURTHER CLARIFIESOCCURRENCE NUMBER 1408435 PREVIOUSLY FILED.



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Initiated By: WISCONSIN DEPARTMENT OF FINANCIAL INSTITUTIONS DIVISION OFSECURITIES





Docket/Case Number:



Allegations: FAILURE TO SUPERVISE AND UNETHICAL BUSINESS PRACTICES RELATEDTO THE MARKETING AND SALE OF AUCTION RATE SECURITIES.



Resolution:

Sanctions Ordered: Monetary/Fine $462,788.27Disgorgement/Restitution

Consent







Sanction Details: UBS HAS PAID THE SUM OF $462,788.27 TO WISCONSIN.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,WISCONSIN WILL RECEIVE A TOTAL PAYMENT OF $462,788.27 FROM UBS,FROM A TOTAL FINE OF$75MM PREVIOUSLY AGREED UPON WITH THE STATE OFMASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION. THIS FILING FURTHER CLARIFIESOCCURRENCE NUMBER 1408435 PREVIOUSLY FILED.



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Initiated By: WEST VIRGINIA SECURITIES COMMISSION





Docket/Case Number:






Resolution:


Consent







Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $155,754.80 TO WEST VIRGINIA.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,WEST VIRGINIA WILL RECEIVE A TOTAL PAYMENT OF $155,754.80 FROMUBS, FROM A TOTAL FINE OF$75MM PREVIOUSLY AGREED UPON WITH THE STATE OFMASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION. THIS FILING FURTHER CLARIFIESOCCURRENCE NUMBER 1408435 PREVIOUSLY FILED.



i


Initiated By: U.S. VIRGIN ISLANDS DIVISION OF BANKING AND INSURANCE





Docket/Case Number:






Resolution:


Consent







Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $258,154.66 TO THE VIRGIN ISLANDS.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY, THEVIRGIN ISLANDS WILL RECEIVE A TOTAL PAYMENT OF $258,154.66 FROMUBS, FROM A TOTAL FINE OF$75MM PREVIOUSLY AGREED UPON WITH THE STATE OFMASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION. THIS FILING FURTHER CLARIFIESOCCURRENCE NUMBER 1408435 PREVIOUSLY FILED.



i


Initiated By: STATE OF VERMONT DEPARTMENT OF BANKING, INSURANCE, SECURITIESAND HEALTH CARE ADMINISTRATION





Docket/Case Number:






Resolution:


Consent







Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $243,263.37 TO VERMONT.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,VERMONT WILL RECEIVE A TOTAL PAYMENT OF $243,263.37 FROM UBS,FROM A TOTAL FINE OF$75MM PREVIOUSLY AGREED UPON WITH THE STATE OFMASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION. THIS FILING FURTHER CLARIFIESOCCURRENCE NUMBER 1408435 PREVIOUSLY FILED.



i


Initiated By: TENNESSEE DEPARTMENT OF COMMERCE & INSURANCE SECURITIESDIVISION





Docket/Case Number:






Resolution: Consent








Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $1,046,609.84 TO TENNESSEE.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,TENNESSEE WILL RECEIVE A TOTAL PAYMENT OF $1,046,609.84 FROM UBS,FROM A TOTAL FINE OF $75MM PREVIOUSLY AGREED UPON WITH THESTATE OF MASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION. THIS FILING FURTHER CLARIFIESOCCURRENCE NUMBER 1408435 PREVIOUSLY FILED.



i


Initiated By: PUERTO RICO COMMISSION OF FINANCIAL INSTITUTIONS





Docket/Case Number:






Resolution: Consent








Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $207,429.35 TO PUERTO RICO.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,PUERTO RICO WILL RECEIVE A TOTAL PAYMENT OF $207,429.35 FROM UBS,FROM A TOTAL FINE OF $75MM PREVIOUSLY AGREED UPON WITH THESTATE OF MASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION. THIS FILING FURTHER CLARIFIESOCCURRENCE NUMBER 1408435 PREVIOUSLY FILED.



i


Initiated By: NEW MEXICO REGULATION AND LICENSING DEPARTMENT SECURITIESDIVISION





Docket/Case Number:






Resolution: Consent








Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $277,205.48 TO NEW MEXICO.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY, NEWMEXICO WILL RECEIVE A TOTAL PAYMENT OF $277,205.48 FROM UBS,FROM A TOTAL FINE OF$75MM PREVIOUSLY AGREED UPON WITH THE STATE OFMASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION. THIS FILING FURTHER CLARIFIESOCCURRENCE NUMBER 1408435 PREVIOUSLY FILED.



i


Initiated By: NEBRASKA DEPARTMENT OF BANKING AND FINANCE





Docket/Case Number:






Resolution: Consent








Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $406,414.94 TO NEBRASKA.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,NEBRASKA WILL RECEIVE A TOTAL PAYMENT OF $406,414.94 FROM UBS,FROM A TOTAL FINE OF $75MM PREVIOUSLY AGREED UPON WITH THESTATE OF MASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION. THIS FILING FURTHER CLARIFIESOCCURRENCE NUMBER 1408435 PREVIOUSLY FILED.



i


Initiated By: MISSISSIPPI OFFICE OF THE SECRETARY OF STATE, SECURITIES ANDCHARITIES DIVISION





Docket/Case Number:






Resolution: Consent








Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $498,250.77 TO MISSISSIPPI.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,MISSISSIPPI WILL RECEIVE A TOTAL PAYMENT OF $498,250.77 FROM UBS,FROM A TOTAL FINE OF $75MM PREVIOUSLY AGREED UPON WITH THESTATE OF MASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION. THIS FILING FURTHER CLARIFIESOCCURRENCE NUMBER 1408435 PREVIOUSLY FILED.



i


Initiated By: STATE OF MICHIGAN OFFICE OF FINANCIAL AND INSURANCE REGULATION





Docket/Case Number:






Resolution: Consent








Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $2,227,163.33 TO MICHIGAN.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,MICHIGAN WILL RECEIVE A TOTAL PAYMENT OF $2,227,163.33 FROM UBS,FROM A TOTAL FINE OF $75MM PREVIOUSLY AGREED UPON WITH THESTATE OF MASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION. THIS FILING FURTHER CLARIFIESOCCURRENCE NUMBER 1408435 PREVIOUSLY FILED.



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Initiated By: FLORIDA OFFICE OF FINANCIAL REGULATION ("OFFICE")




Docket/Case Number: 0535-S-7/10



Other Product Type(s): AUCTION RATE SECURITIES ("ARS")

Allegations: ON 11/4/2010, THE OFFICE, SUBSEQUENT TO COORDINATEDINVESTIGATIONS CONDUCTED BY A MULTI-STATE TASK FORCECONSISTING OF MEMBER STATES OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION ("NASAA"), ENTERED INTO A CONSENTAGREEMENT REGARDING UBS'S ACTIVITIES IN THE MARKETING AND SALEOF ARS PRIOR TO WIDESPREAD FAILED AUCTIONS BEGINNING INFEBRUARY 2008.










CEASE & DESIST


Resolution:

Other Sanctions Ordered: ON 11/5/2010, THE OFFICE ENTERED A FINAL ORDER ADOPTING THECONSENT AGREEMENT WHEREBY UBS AGREED TO DO THE FOLLOWING:1.) OFFER TO PURCHASE ARS AT PAR PLUS ACCRUED BUT UNPAIDDIVIDENDS/INTEREST FOR CERTAIN "ELIGIBLE" INVESTORS DURING THERELEVANT TIMEFRAME, 2.) TAKE CERTAIN MEASURES WITH RESPECT TOCERTAIN CURRENT AND FORMER CUSTOMERS AS RELATED TO "ELIGIBLEARS", AND; 3.) PARTICIPATE IN A SPECIAL ARBITRATION PROCESS.

Sanction Details: PER THE CONSENT AGREEMENT DATED 11/4/2010, UBS PAID ANADMINISTRATIVE FINE OF $6,581,232.48. THE CONSENT AGREEMENT WASENTERED INTO SOLELY FOR THE PURPOSE OF RESOLVING THE ABOVE-REFERENCED MULTISTATE INVESTIGATION. AS THE RESULT OF UBS'SRELIEF EFFORTS, TOTAL RESTITUTION PROVIDED TO FLORIDAPURCHASERS OF ARS TOTALED APPROXIMATELY $2,710,039,694.75.

Regulator Statement PER THE OFFICE'S FINAL ORDER DATED 11/5/2010 ADOPTING THECONSENT AGREEMENT, UBS, WITHOUT ADMITTING OR DENYING THESTATEMENT OF FACTS AND CONCLUSIONS OF LAW CONTAINED IN THEAGREEMENT, AND WITHOUT AN ADJUDICATION OF ANY ISSUE OF LAW ORFACT, CONSENTED TO THE ENTRY OF THE OFFICE'S FINDINGS OF FACTSAND CONCLUSIONS OF LAW THAT THEY FAILED TO REASONABLYSUPERVISE CERTAIN OF ITS FAS IN THEIR COMMUNICATION OF MATERIALINFORMATION CONCERNING ARS AND ENGAGED IN DISHONEST ORUNETHICAL PRACTICES IN THE SECURITIES BUSINESS.


No

Sanctions Ordered: Monetary/Fine $6,581,232.48Cease and Desist/Injunction

Order









Initiated By: FLORIDA FINANCIAL SERVICES COMMISSION OFFICE OF FINANCIALREGULATION










Resolution:


Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $6,581,232.48 TO FLORIDA.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,FLORIDA WILL RECEIVE A TOTAL PAYMENT OF $6,581,232.48 FROM UBS,FROM A TOTAL FINE OF$75MM PREVIOUSLY AGREED UPON WITH THE STATE OFMASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION. THIS FILING FURTHER CLARIFIESOCCURRENCE NUMBER 1408435 PREVIOUSLY FILED.


Consent


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Initiated By: ARKANSAS SECURITIES DEPARTMENT





Docket/Case Number:






Resolution:


Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $265,036.69 TO ARKANSAS

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,ARKANSAS WILL RECEIVE A TOTAL PAYMENT OF $265,036.69 FROM UBS,FROM A TOTAL FINE OF $75MM PREVIOUSLY AGREED UPON WITH THESTATE OF MASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION. THIS FILING FURTHER CLARIFIESOCCURRENCE NUMBER 1408435 PREVIOUSLY FILED.


Consent


i







Initiated By: DISTRICT OF COLUMBIA


Other


ADMINISTRATIVE CONSENT ORDER


Docket/Case Number: SB-CO-14-11



Other Product Type(s): AUTION RATE SECURITIES

Allegations: UBS FINANCIAL SERVICES INC./UBS SECURITIES LLC COLLECTIVELY("UBS")VIOLATED D.C. OFFICIAL § 31-5602.07(A)(12) FOR FAILURE TOSUPERVISE ITS EMPLOYEES AND D.C. OFFICIAL CODE§ 31-5602.07(A)(9) FOR ENGAGING IN DISHONEST AND UNETHICALBUSINESS PRACTICES IN ITS SALE OF AUTION RATE SECURITIES IN THEDISTRICT OF COLUMBIA.



Resolution:

Other Sanctions Ordered: UBS WILL TAKE VARIOUS MEASURES TO RESOLVE OUTSTANDING ARSISSUES.

Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING D.C. OFFICIAL CODE §§31-5602.07(A)(9) AND 31-5602(A)(12); AND SHALL PAY THE SUM OF THREEHUNDRED FORTY THOUSAND TWO HUNDRED TWENTY SEVEN DOLLORSAND NINETY CENTS ($340,277.90). THE FINE WAS PAID 08/08/2011.


No


Order







Initiated By: DISTRICT OF COLUMBIA DEPARTMENT OF INSURANCE & SECURITIESREGULATION





Docket/Case Number: SB-CO-14-11






Resolution:


Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $340,227.90 TO WASHINGTON D.C.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,WASHINGTON D.C. WILL RECEIVE A TOTAL PAYMENT OF $340,227.90 FROMUBS, FROM A TOTAL FINE OF $75MMPREVIOUSLY AGREED UPON WITH THE STATE OF MASSACHUSETTS ANDTHE NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION. THISFILING FURTHER CLARIFIES OCCURRENCE NUMBER 1408435 PREVIOUSLYFILED.


Consent


i







Initiated By: FINRA







Allegations: FINRA RULES 2010, 7450, NASD RULES 2110, 3010, 6955(A) - UBSSECURITIES LLC TRANSMITTED REPORTABLE ORDER EVENTS (ROES) TOTHE ORDER AUDIT TRAIL SYSTEM (OATS) THAT WERE REJECTED BY OATSFOR CONTEXT OR SYNTAX ERRORS AND WERE REPAIRABLE BUT THEFIRM FAILED TO REPAIR SOME OF THESE REJECTED ROES SO THAT ITFAILED TO TRANSMIT THEM TO OATS DURING THAT REVIEW PERIOD. THEFIRM ALSO FAILED TO REPAIR SOME OF THE ROES WITHIN THE REQUIREDFIVE BUSINESS DAYS. THE FIRM FAILED TO TRANSMIT ALL OF ITS ROES TOOATS ON NUMEROUS BUSINESS DAYS FOR APPROXIMATELY 18 MONTHSFOR A SPECIFIC MARKET PARTICIPANT IDENTIFIER (MPID). THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLESECURITIES LAWS, REGULATIONS AND NASD RULES CONCERNING OATSREPORTING FOR THE SPECIFIC MPID.



Resolution:




No











Initiated By: FINRA




CENSURE





Allegations: FINRA RULES 2010, 7450, NASD RULES 2110, 3010, 6955(A) - UBSSECURITIES LLC TRANSMITTED REPORTABLE ORDER EVENTS (ROES) TOTHE ORDER AUDIT TRAIL SYSTEM (OATS) THAT WERE REJECTED BY OATSFOR CONTEXT OR SYNTAX ERRORS AND WERE REPAIRABLE BUT THEFIRM FAILED TO REPAIR SOME OF THESE REJECTED ROES SO THAT ITFAILED TO TRANSMIT THEM TO OATS DURING THAT REVIEW PERIOD. THEFIRM ALSO FAILED TO REPAIR SOME OF THE ROES WITHIN THE REQUIREDFIVE BUSINESS DAYS. THE FIRM FAILED TO TRANSMIT ALL OF ITS ROES TOOATS ONNUMEROUS BUSINESS DAYS FOR APPROXIMATELY 18 MONTHS FOR ASPECIFIC MARKET PARTICIPANT IDENTIFIER (MPID). THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLESECURITIES LAWS, REGULATIONS AND NASD RULES CONCERNING OATSREPORTING FOR THE SPECIFIC MPID.



Resolution:











WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $42,500.


i


Initiated By: MARYLAND OFFICE OF THE ATTORNEY GENERAL DIVISION OF SECURITIES





Docket/Case Number:






Resolution:


Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $999,562.86 TO THE STATE OF MARYLAND.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,MARYLAND WILL RECEIVE A TOTAL PAYMENT OF $999,562.86 FROM UBS,FROM A TOTAL FINE OF $75MMPREVIOUSLY AGREED UPON WITH THE STATE OF MASSACHUSETTS ANDTHE NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION. THISFILING FURTHER CLARIFIES OCCURRENCE NUMBER 1408435 PREVIOUSLYFILED.


Consent







WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,MARYLAND WILL RECEIVE A TOTAL PAYMENT OF $999,562.86 FROM UBS,FROM A TOTAL FINE OF $75MMPREVIOUSLY AGREED UPON WITH THE STATE OF MASSACHUSETTS ANDTHE NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION. THISFILING FURTHER CLARIFIES OCCURRENCE NUMBER 1408435 PREVIOUSLYFILED.


i


Initiated By: UTAH DIVISION OF SECURITIES




CEASE AND DESIST; AND VARIOUS MEASURES TO RESOLVE AUCTIONRATE SECURITIES ("ARS") ISSUES.


Docket/Case Number: SD-11-0039




Allegations: THE DIVISION ALLEGED THAT UBS FAILED TO SUPERVISE ITS FINANCIALADVISORS AND ENGAGED IN DISHONEST AND UNETHICAL BUSINESSPRACTICES WITH REGARD TO ITS SALES OF AUCTION RATE SECURITIES.



Resolution:

Other Sanctions Ordered: UBS WILL TAKE VARIOUS MEASURES TO RESOLVE OUTSTANDING ARSISSUES.

Sanction Details: TOTAL FINE AMOUNT IS $372,147.18 AND IS LEVIED ENTIRELY AGAINST THESUBJECT WITH NO PORTION WAIVED. FINE WAS PAID IN FULL ON06/16/2011.

Regulator Statement A PDF VERSION OF THE STIPULATION AND CONSENT ORDER CAN BEVIEWED ONLINE AT:HTTP://SECURITIES.UTAH.GOV/DOCKETS/11003901.PDF(NOTE: THE ADDRESS MUST BE ENTERED IN ALL LOWER CASE LETTERS)


Yes








A PDF VERSION OF THE STIPULATION AND CONSENT ORDER CAN BEVIEWED ONLINE AT:HTTP://SECURITIES.UTAH.GOV/DOCKETS/11003901.PDF(NOTE: THE ADDRESS MUST BE ENTERED IN ALL LOWER CASE LETTERS)


Initiated By: UTAH DEPARTMENT OF COMMERCE DIVISION OF SECURITIES











Resolution:


Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $372,147.18 TO THE STATE OF UTAH.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY, UTAHWILL RECEIVE A TOTAL PAYMENT OF $372,147.18 FROM UBS, FROM ATOTAL FINE OF $75MMPREVIOUSLY AGREED UPON WITH THE STATE OF MASSACHUSETTS ANDTHE NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION. THISFILING FURTHER CLARIFIES OCCURRENCE NUMBER 1408435 PREVIOUSLYFILED.








WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY, UTAHWILL RECEIVE A TOTAL PAYMENT OF $372,147.18 FROM UBS, FROM ATOTAL FINE OF $75MMPREVIOUSLY AGREED UPON WITH THE STATE OF MASSACHUSETTS ANDTHE NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION. THISFILING FURTHER CLARIFIES OCCURRENCE NUMBER 1408435 PREVIOUSLYFILED.


i







Docket/Case Number: 2007-162 & 2008-006 & 2008-068



Allegations: FOR THE REVIEW PERIOD, JULY 2007 THROUGH MARCH 2008; IN 14INSTANCES UBS SECURITIES LLC ("UBS") SENT PRINCIPAL ACTING ASAGENT ("P/A") ORDERS THROUGH LINKAGE WHEN THE ORIGINALCUSTOMER ORDER HAD ALREADY BEEN FILLED. IN 11 INSTANCES, UBSSENT P/A ORDERS EXCEEDING THE CUSTOMER ORDER SIZE. IN 32INSTANCES UBS SENT P/A ORDERS THROUGH LINKAGE WHERE THEEXECUTION OF THE P/A ORDER WAS NOT PASSED ALONG TO THE PUBLICCUSTOMER. IN 7 INSTANCES UBS SENT P/A ORDERS THROUGH LINKAGEREFLECTING A PRICE INFERIOR TO THE PUBLIC CUSTOMER PRICE THISCONDUCT CONSTITIUTES 4 SEPERATE & DISTINCT VIOLATIONS OF ISERULE 400.



Resolution:


Sanction Details: FIRM PAID A $15,000 FINE


No














Docket/Case Number: 2007-162, 2008-006, 2008-068



Allegations: DURING THE THIRD AND FORTH QUARTERS OF 2007 AND THE FIRSTQUARTER OF 2008:UBS SENT P/A ORDERS, AS THAT TERM IS DEFINED IN ISE RULE 1900(10)(I),THROUGH THE LINKAGE WHEN THE ORIGINAL CUSTOMER ORDER HADALREADY BEEN FILLED; UBS SENT P/A ORDERS THROUGH THE LINKAGEWHERE THE P/A ORDER EXCEEDED THE CUSTOMER ORDER SIZE; UBSSENT P/A ORDERS THROUGH THE LINKAGE WHERE THE EXECUTION OFTHE P/A ORDER WAS NOT PASSED ALONG TO THE PUBLIC CUSTOMER;AND UBS SENT P/A ORDERS THROUGH THE LINKAGE REFLECTING APRICE INFERIOR TO THE PUBLIC CUSTOMER PRICE. THIS CONDUCTVIOLATES ISE RULE 400.



Resolution:



Firm Statement PLEASE NOTE, ALL THREE FILE NUMBERS WERE LISTED IN THE SAMEAWC.




i








Initiated By: OHIO DIVISION OF SECURITIES





Docket/Case Number:





Resolution:


Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $1,853,575.31 TO THE STATE OF OHIO.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY, OHIOWILL RECEIVE A TOTAL PAYMENT OF $1,853,575.31 FROM UBS, FROM ATOTAL FINE OF $75MM PREVIOUSLY AGREED UPON WITH THE STATE OFMASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION. THIS FILING FURTHER CLARIFIESOCCURRENCE NUMBER 1408435 PREVIOUSLY FILED.


Consent


i


Allegations: FINRA RULE 2010, NASD RULES 2110, 2711(H)(2), 2711(H)(2)(B), 2711(I): INOCTOBER 2007, THE MEMBER OF THE FIRM'S CORE CLIENT DATASERVICES GROUP (CCDS) WHO WAS RESPONSIBLE FOR MANUALLYUPDATING THE CLIENT-BASED DATABASE WITH COMPANY CODES, LEFTTHE FIRM. THE FIRM FAILED TO REASSIGN THIS TASK. AS A RESULT, THEFIRM FAILED TO UPDATE THE COMPANY CODES IN THE CLIENT-BASEDDATABASE AND NO EMAILS INDICATING THAT THE COMPANY CODES HADBEEN ADDED WERE SENT TO THE FIRM'S CLIENT MANAGEMENT TEAM(CMT) BY CCDS. BUT THE CLIENT DATA STRATEGIST, A SENIOR OFFICER INCMT WHO WAS IN CHARGE OF PRODUCING A BUSINESS OBJECT REPORT,CONTINUED TO PRODUCE THE REPORT WITHOUT CONFIRMING THAT THECOMPANY CODES WERE UPDATED. THE CLIENT DATA STRATEGISTCONTINUED TO PRODUCE THE REPORTS, SO A FILE WAS CREATED ANDUPLOADED IN THE FIRM'S CENTRAL DISCLOSURE DATABASE, EVENTHOUGH IT CONTAINED INCOMPLETE INFORMATION. SINCE THE REPORTSWERE COMPLETED THE EMAIL ALERTS WERE NOT TRIGGERED AT THEEND OF THE PROCESS. AS A RESULT OF THE ABOVE FAILURES DURINGTHE UPDATE PROCESS, 260 EQUITY REPORTS PUBLISHED BY THE FIRMFAILED TO INCLUDE ONE OR MORE REQUIRED NON-INVESTMENTBANKING DISCLOSURES (NON-INVESTMENT BANKING COMPENSATION,NON-INVESTMENT BANKING SECURITIES-RELATED SERVICES, AND NON-SECURITIES SERVICES). FURTHER, AS A RESULT OF CERTAININFORMATION CONTAINED IN THE CENTRAL DISCLOSURE DATABASE NOTBEING UPDATED DUE TO THE ABOVE-MENTIONED UPDATE PROCESSFAILURE, RESEARCH ANALYSTS CREATING AND SENDING INFORMATIONABOUT THE IMPACTED SUBJECT COMPANIES TO MEDIA OUTLETS INCONNECTION WITH PUBLIC APPEARANCES, FAILED TO DISCLOSE THEFIRM'S NON-INVESTMENT BANKING RELATED COMPENSATION AND THETYPES OF SERVICES (NON-INVESTMENT BANKING SECURITIES-RELATEDSERVICES, AND NON-SECURITIES SERVICES) THE FIRM PROVIDED IN THEPRIOR 12 MONTHS. IN ADDITION, THE FIRM FAILED TO ADEQUATELYIMPLEMENT ITS SUPERVISORY PROCEDURES CONCERNING COMPLIANCEWITH NASD RULE 2711(H). THE FIRM VIOLATED NASD RULE 2711(I) BYFAILING TO (A) CONDUCT FOLLOW-UP AND REVIEW TO ENSURE THAT ITSEMPLOYEES WERE PERFORMING THEIR ASSIGNED RESPONSIBILITIES OFCOLLECTING AND UPDATING DATA TO GENERATE ACCURATEDISCLOSURES; AND (B) HAVE A VERIFICATION PROCESS TO CONFIRMTHAT EACH GROUP WAS PERFORMING ITS TASK TO ENSURE THE FLOWOF UPDATED INFORMATION AT EACH STAGE IN ORDER TO HAVEACCURATE DISCLOSURES. THE FIRM FAILED TO ADEQUATELYIMPLEMENTS ITS WRITTEN PROCEDURES THAT PROVIDED FOR STEP-BY-STEP GUIDANCE FOR UPDATING THE REQUIRED DISCLOSURES IN THERELEVANT DATABASES IN ORDER TO REASONABLY ENSURE THAT THEYWERE DISCLOSED IN THE RESEARCH REPORTS AND IN PUBLICAPPEARANCES.







Initiated By: FINRA

Allegations: FINRA RULE 2010, NASD RULES 2110, 2711(H)(2), 2711(H)(2)(B), 2711(I): INOCTOBER 2007, THE MEMBER OF THE FIRM'S CORE CLIENT DATASERVICES GROUP (CCDS) WHO WAS RESPONSIBLE FOR MANUALLYUPDATING THE CLIENT-BASED DATABASE WITH COMPANY CODES, LEFTTHE FIRM. THE FIRM FAILED TO REASSIGN THIS TASK. AS A RESULT, THEFIRM FAILED TO UPDATE THE COMPANY CODES IN THE CLIENT-BASEDDATABASE AND NO EMAILS INDICATING THAT THE COMPANY CODES HADBEEN ADDED WERE SENT TO THE FIRM'S CLIENT MANAGEMENT TEAM(CMT) BY CCDS. BUT THE CLIENT DATA STRATEGIST, A SENIOR OFFICER INCMT WHO WAS IN CHARGE OF PRODUCING A BUSINESS OBJECT REPORT,CONTINUED TO PRODUCE THE REPORT WITHOUT CONFIRMING THAT THECOMPANY CODES WERE UPDATED. THE CLIENT DATA STRATEGISTCONTINUED TO PRODUCE THE REPORTS, SO A FILE WAS CREATED ANDUPLOADED IN THE FIRM'S CENTRAL DISCLOSURE DATABASE, EVENTHOUGH IT CONTAINED INCOMPLETE INFORMATION. SINCE THE REPORTSWERE COMPLETED THE EMAIL ALERTS WERE NOT TRIGGERED AT THEEND OF THE PROCESS. AS A RESULT OF THE ABOVE FAILURES DURINGTHE UPDATE PROCESS, 260 EQUITY REPORTS PUBLISHED BY THE FIRMFAILED TO INCLUDE ONE OR MORE REQUIRED NON-INVESTMENTBANKING DISCLOSURES (NON-INVESTMENT BANKING COMPENSATION,NON-INVESTMENT BANKING SECURITIES-RELATED SERVICES, AND NON-SECURITIES SERVICES). FURTHER, AS A RESULT OF CERTAININFORMATION CONTAINED IN THE CENTRAL DISCLOSURE DATABASE NOTBEING UPDATED DUE TO THE ABOVE-MENTIONED UPDATE PROCESSFAILURE, RESEARCH ANALYSTS CREATING AND SENDING INFORMATIONABOUT THE IMPACTED SUBJECT COMPANIES TO MEDIA OUTLETS INCONNECTION WITH PUBLIC APPEARANCES, FAILED TO DISCLOSE THEFIRM'S NON-INVESTMENT BANKING RELATED COMPENSATION AND THETYPES OF SERVICES (NON-INVESTMENT BANKING SECURITIES-RELATEDSERVICES, AND NON-SECURITIES SERVICES) THE FIRM PROVIDED IN THEPRIOR 12 MONTHS. IN ADDITION, THE FIRM FAILED TO ADEQUATELYIMPLEMENT ITS SUPERVISORY PROCEDURES CONCERNING COMPLIANCEWITH NASD RULE 2711(H). THE FIRM VIOLATED NASD RULE 2711(I) BYFAILING TO (A) CONDUCT FOLLOW-UP AND REVIEW TO ENSURE THAT ITSEMPLOYEES WERE PERFORMING THEIR ASSIGNED RESPONSIBILITIES OFCOLLECTING AND UPDATING DATA TO GENERATE ACCURATEDISCLOSURES; AND (B) HAVE A VERIFICATION PROCESS TO CONFIRMTHAT EACH GROUP WAS PERFORMING ITS TASK TO ENSURE THE FLOWOF UPDATED INFORMATION AT EACH STAGE IN ORDER TO HAVEACCURATE DISCLOSURES. THE FIRM FAILED TO ADEQUATELYIMPLEMENTS ITS WRITTEN PROCEDURES THAT PROVIDED FOR STEP-BY-STEP GUIDANCE FOR UPDATING THE REQUIRED DISCLOSURES IN THERELEVANT DATABASES IN ORDER TO REASONABLY ENSURE THAT THEYWERE DISCLOSED IN THE RESEARCH REPORTS AND IN PUBLICAPPEARANCES.






Initiated By: FINRA


Other


N/A






Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE IT IS CENSURED AND FINED $300,000. IN DETERMINING THEAPPROPRIATE SANCTION IN THIS MATTER, FINRA'S ENFORCEMENTDEPARTMENT CONSIDERED THE FIRM'S SELF-REPORT THAT IT FAILED TOMAKE THE REQUIRED DISCLOSURES RELATING TO NON-INVESTMENTBANKING-RELATED COMPENSATION AND/OR TYPES OF SERVICESPROVIDED TO THE SUBJECT COMPANY IN 260 EQUITY RESEARCHREPORTS PUBLISHED IN THE U.S., THE PROMPT REMEDIAL STEPS THATTHE FIRM PUT IN PLACE TO ADDRESS THE DEFICIENCIES, AS WELL AS THEFIRM'S PRIOR DISCIPLINARY HISTORY.


No




Allegations: FINRA RULE 2010, NASD RULES 2110, 2711(H)(2), 2711(H)(2)(B), 2711(I): INOCTOBER 2007, THE MEMBER OF THE FIRM'SCORE CLIENT DATA SERVICES GROUP (CCDS) WHO WAS RESPONSIBLEFOR MANUALLY UPDATING THE CLIENT-BASED DATABASE WITH COMPANYCODES, LEFT THE FIRM. THE FIRM FAILED TO REASSIGN THIS TASK. AS ARESULT, THE FIRM FAILED TO UPDATE THE COMPANY CODES IN THECLIENT-BASED DATABASE AND NO EMAILS INDICATING THAT THECOMPANY CODES HAD BEEN ADDED WERE SENT TO THE FIRM'S CLIENTMANAGEMENT TEAM (CMT) BY CCDS. BUT THECLIENT DATA STRATEGIST, A SENIOR OFFICER IN CMT WHO WAS INCHARGE OF PRODUCING A BUSINESS OBJECT REPORT, CONTINUED TOPRODUCE THE REPORT WITHOUT CONFIRMING THAT THE COMPANYCODES WERE UPDATED. THE CLIENT DATA STRATEGIST CONTINUED TOPRODUCE THE REPORTS, SO A FILE WAS CREATED AND UPLOADED INTHE FIRM'S CENTRAL DISCLOSURE DATABASE, EVEN THOUGH ITCONTAINED INCOMPLETE INFORMATION. SINCE THE REPORTS WERECOMPLETED THE EMAIL ALERTS WERE NOT TRIGGERED AT THE END OFTHE PROCESS. AS A RESULT OF THE ABOVE FAILURES DURING THEUPDATE PROCESS, 260 EQUITY REPORTS PUBLISHED BY THE FIRM FAILEDTO INCLUDE ONE OR MORE REQUIRED NON-INVESTMENT BANKINGDISCLOSURES (NON-INVESTMENT BANKING COMPENSATION, NON-INVESTMENT BANKING SECURITIES-RELATED SERVICES, AND NON-SECURITIES SERVICES). FURTHER, AS A RESULT OF CERTAININFORMATION CONTAINED IN THE CENTRAL DISCLOSURE DATABASE NOTBEING UPDATED DUE TO THE ABOVE-MENTIONED UPDATE PROCESSFAILURE, RESEARCH ANALYSTS CREATING AND SENDINGINFORMATION ABOUT THE IMPACTED SUBJECT COMPANIES TO MEDIAOUTLETS IN CONNECTION WITH PUBLIC APPEARANCES, FAILED TODISCLOSE THE FIRM'S NON-INVESTMENT BANKING RELATEDCOMPENSATION AND THE TYPES OF SERVICES (NON-INVESTMENTBANKING SECURITIES-RELATED SERVICES, AND NON-SECURITIESSERVICES) THE FIRM PROVIDED IN THE PRIOR 12 MONTHS. IN ADDITION,THE FIRM FAILED TO ADEQUATELY IMPLEMENT ITS SUPERVISORYPROCEDURES CONCERNING COMPLIANCE WITH NASD RULE 2711(H). THEFIRM VIOLATED NASD RULE 2711(I) BY FAILING TO (A) CONDUCT FOLLOW-UP AND REVIEW TO ENSURE THAT ITS EMPLOYEES WERE PERFORMINGTHEIR ASSIGNED RESPONSIBILITIES OF COLLECTING AND UPDATING DATATO GENERATE ACCURATE DISCLOSURES; AND (B) HAVE AVERIFICATION PROCESS TO CONFIRM THAT EACH GROUP WASPERFORMING ITS TASK TO ENSURE THE FLOW OF UPDATEDINFORMATION AT EACH STAGE IN ORDER TO HAVE ACCURATEDISCLOSURES. THE FIRM FAILED TO ADEQUATELY IMPLEMENTS ITSWRITTEN PROCEDURES THAT PROVIDED FOR STEP-BY-STEP GUIDANCEFOR UPDATING THE REQUIRED DISCLOSURES IN THE RELEVANTDATABASES IN ORDER TO REASONABLY ENSURE THAT THEY WEREDISCLOSED IN THE RESEARCH REPORTS AND IN PUBLIC APPEARANCES.








Initiated By: FINRA

FINRA RULE 2010, NASD RULES 2110, 2711(H)(2), 2711(H)(2)(B), 2711(I): INOCTOBER 2007, THE MEMBER OF THE FIRM'SCORE CLIENT DATA SERVICES GROUP (CCDS) WHO WAS RESPONSIBLEFOR MANUALLY UPDATING THE CLIENT-BASED DATABASE WITH COMPANYCODES, LEFT THE FIRM. THE FIRM FAILED TO REASSIGN THIS TASK. AS ARESULT, THE FIRM FAILED TO UPDATE THE COMPANY CODES IN THECLIENT-BASED DATABASE AND NO EMAILS INDICATING THAT THECOMPANY CODES HAD BEEN ADDED WERE SENT TO THE FIRM'S CLIENTMANAGEMENT TEAM (CMT) BY CCDS. BUT THECLIENT DATA STRATEGIST, A SENIOR OFFICER IN CMT WHO WAS INCHARGE OF PRODUCING A BUSINESS OBJECT REPORT, CONTINUED TOPRODUCE THE REPORT WITHOUT CONFIRMING THAT THE COMPANYCODES WERE UPDATED. THE CLIENT DATA STRATEGIST CONTINUED TOPRODUCE THE REPORTS, SO A FILE WAS CREATED AND UPLOADED INTHE FIRM'S CENTRAL DISCLOSURE DATABASE, EVEN THOUGH ITCONTAINED INCOMPLETE INFORMATION. SINCE THE REPORTS WERECOMPLETED THE EMAIL ALERTS WERE NOT TRIGGERED AT THE END OFTHE PROCESS. AS A RESULT OF THE ABOVE FAILURES DURING THEUPDATE PROCESS, 260 EQUITY REPORTS PUBLISHED BY THE FIRM FAILEDTO INCLUDE ONE OR MORE REQUIRED NON-INVESTMENT BANKINGDISCLOSURES (NON-INVESTMENT BANKING COMPENSATION, NON-INVESTMENT BANKING SECURITIES-RELATED SERVICES, AND NON-SECURITIES SERVICES). FURTHER, AS A RESULT OF CERTAININFORMATION CONTAINED IN THE CENTRAL DISCLOSURE DATABASE NOTBEING UPDATED DUE TO THE ABOVE-MENTIONED UPDATE PROCESSFAILURE, RESEARCH ANALYSTS CREATING AND SENDINGINFORMATION ABOUT THE IMPACTED SUBJECT COMPANIES TO MEDIAOUTLETS IN CONNECTION WITH PUBLIC APPEARANCES, FAILED TODISCLOSE THE FIRM'S NON-INVESTMENT BANKING RELATEDCOMPENSATION AND THE TYPES OF SERVICES (NON-INVESTMENTBANKING SECURITIES-RELATED SERVICES, AND NON-SECURITIESSERVICES) THE FIRM PROVIDED IN THE PRIOR 12 MONTHS. IN ADDITION,THE FIRM FAILED TO ADEQUATELY IMPLEMENT ITS SUPERVISORYPROCEDURES CONCERNING COMPLIANCE WITH NASD RULE 2711(H). THEFIRM VIOLATED NASD RULE 2711(I) BY FAILING TO (A) CONDUCT FOLLOW-UP AND REVIEW TO ENSURE THAT ITS EMPLOYEES WERE PERFORMINGTHEIR ASSIGNED RESPONSIBILITIES OF COLLECTING AND UPDATING DATATO GENERATE ACCURATE DISCLOSURES; AND (B) HAVE AVERIFICATION PROCESS TO CONFIRM THAT EACH GROUP WASPERFORMING ITS TASK TO ENSURE THE FLOW OF UPDATEDINFORMATION AT EACH STAGE IN ORDER TO HAVE ACCURATEDISCLOSURES. THE FIRM FAILED TO ADEQUATELY IMPLEMENTS ITSWRITTEN PROCEDURES THAT PROVIDED FOR STEP-BY-STEP GUIDANCEFOR UPDATING THE REQUIRED DISCLOSURES IN THE RELEVANTDATABASES IN ORDER TO REASONABLY ENSURE THAT THEY WEREDISCLOSED IN THE RESEARCH REPORTS AND IN PUBLIC APPEARANCES.







Censure


FINE $300,000.00




Other Product Type(s): RESEARCH


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE IT IS CENSURED AND FINED $300,000. IN DETERMINING THEAPPROPRIATE SANCTION IN THIS MATTER, FINRA'S ENFORCEMENTDEPARTMENT CONSIDERED THE FIRM'S SELF-REPORT THAT IT FAILED TOMAKE THE REQUIRED DISCLOSURES RELATING TO NON-INVESTMENTBANKING-RELATED COMPENSATIONAND/OR TYPES OF SERVICES PROVIDED TO THE SUBJECT COMPANY IN260 EQUITY RESEARCH REPORTS PUBLISHED IN THE U.S., THE PROMPTREMEDIAL STEPS THAT THE FIRM PUT IN PLACE TO ADDRESS THEDEFICIENCIES, AS WELL AS THE FIRM'S PRIOR DISCIPLINARY HISTORY.




i


Allegations: ON MAY 27, 2010, THE SECURITIES DIVISION ENTERED INTO A CONSENTORDER WITH UBS SECURITIES LLC AND UBS FINANCIAL SERVICES INC.(COLLECTIVELY "RESPONDENTS"), IN ORDER TO SETTLE THEALLEGATIONS THAT RESPONDENTS ENGAGED IN DISHONEST ANDUNETHICAL PRACTICES IN THE SALE OF AUCTION RATE SECURITIES("ARS"), AND FAILED TO REASONABLY SUPERVISE ITS SALESPERSONS INTHE MARKETING AND SALE OF ARS. RESPONDENTS NEITHER ADMITTEDNOR DENIED THE ALLEGATIONS, BUT AGREED TO CEASE AND DESISTFROM VIOLATING THE SECURITIES ACT OF WASHINGTON. RESPONDENTSAGREED TO OFFER TO PURCHASE AT PAR FROM CERTAIN CURRENT ANDFORMER CUSTOMERS ARS THAT FAILED AT LEAST ONCE IN AUCTIONSBETWEEN AUGUST 8, 2008 AND OCTOBER 7, 2008. RESPONDENTSAGREED TO PAY $1,805,294.31 AS A CIVIL MONETARY PENALTY.RESPONDENTS EACH WAIVED THEIR RIGHT TO A HEARING AND TOJUDICIAL REVIEW OF THIS MATTER.








Initiated By: WASHINGTON





Docket/Case Number: S-08-228-10-CO01




ON MAY 27, 2010, THE SECURITIES DIVISION ENTERED INTO A CONSENTORDER WITH UBS SECURITIES LLC AND UBS FINANCIAL SERVICES INC.(COLLECTIVELY "RESPONDENTS"), IN ORDER TO SETTLE THEALLEGATIONS THAT RESPONDENTS ENGAGED IN DISHONEST ANDUNETHICAL PRACTICES IN THE SALE OF AUCTION RATE SECURITIES("ARS"), AND FAILED TO REASONABLY SUPERVISE ITS SALESPERSONS INTHE MARKETING AND SALE OF ARS. RESPONDENTS NEITHER ADMITTEDNOR DENIED THE ALLEGATIONS, BUT AGREED TO CEASE AND DESISTFROM VIOLATING THE SECURITIES ACT OF WASHINGTON. RESPONDENTSAGREED TO OFFER TO PURCHASE AT PAR FROM CERTAIN CURRENT ANDFORMER CUSTOMERS ARS THAT FAILED AT LEAST ONCE IN AUCTIONSBETWEEN AUGUST 8, 2008 AND OCTOBER 7, 2008. RESPONDENTSAGREED TO PAY $1,805,294.31 AS A CIVIL MONETARY PENALTY.RESPONDENTS EACH WAIVED THEIR RIGHT TO A HEARING AND TOJUDICIAL REVIEW OF THIS MATTER.


Resolution:


Sanction Details: CIVIL MONETARY PENALTY OF $1805294.31 WHICH CONSTITUTES THESTATE OF WASHINGTON'S PROPORTIONATE SHARE.

Regulator Statement BRIDGETT FISHER 3609028783


Yes

Sanctions Ordered: Monetary/Fine $1,805,294.31

Consent


Initiated By: WASHINGTON DEPARTMENT OF FINANCIAL INSTITUTIONS SECURITIESDIVISION








Initiated By: WASHINGTON DEPARTMENT OF FINANCIAL INSTITUTIONS SECURITIESDIVISION





Docket/Case Number: S-08-228-10-CO01




Resolution:


Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $1,805,294.31 TO THE STATE OF WASHINGTON.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,WASHINGTON WILL RECEIVE A TOTAL PAYMENT OF $1,805,294.31 FROMUBS, FROM A TOTAL FINE OF $75MM PREVIOUSLY AGREED UPON WITHTHE STATE OF MASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION. THIS FILING FURTHER CLARIFIESOCCURRENCE NUMBER 1408435 PREVIOUSLY FILED.


Consent


i


Initiated By: CME GROUP

Allegations: UBS'S TRADE DATA FOR TRADE DATES 9/1/10 THRU 9/17/10 REFLECTED ANUNACCEPTABLE CTR ERROR RATE.







Initiated By: CME GROUP







Other Product Type(s): FUTURES FINANCIAL


Resolution:




Decision


i


Initiated By: PENNSYLVANIA CONTACT: COUNSEL CAROLYN MENDELSON (412)-565-5083




UBS SECURITIES LLC AND OTHER NAMED RESPONDENT ARE ORDEREDTO PAY A $1,941,058.74 ADMINISTRATIVE ASSESSMENT.






Allegations: UBS SECURITIES LLC AND OTHER NAMED RESPONDENT SOLD AUCTIONRATE SECURITIES IN PA IN A MANNER CONSTITUTING DISHONEST ORUNETHICAL PRACTICES IN THE SECURITIES BUSINESS AND FAILED TOREASONABLY SUPERVISE ITS AGENTS IN VIOLATION OF THE PASECURITIES ACT OF 1972.








UBS SECURITIES LLC AND OTHER NAMED RESPONDENT ARE ORDEREDTO PAY A $1,941,058.74 ADMINISTRATIVE ASSESSMENT.


Resolution:


Sanction Details: UBS SECURITIES LLC AND OTHER NAMED RESPONDENT ARE ORDEREDTO PAY A TOTAL OF $2,588,077.74, OF WHICH $1,941,058.74 REPRESENTSAN ADMINISTRATIVE ASSESSMENT AND THE REMAINING $647,019.00 ISPAYABLE TO THE INVESTOR PROTECTION TRUST. UBS SECURITIES LLCAND OTHER NAMED RESPONDENT WERE ORDERED TO BUY BACKAUCTION RATE SECURITIES FROM ELIGIBLE PA INVESTORS.

Regulator Statement FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER ISSUED TO UBSSECURITIES LLC AND OTHER NAMED RESPONDENT.


Yes

Sanctions Ordered: Monetary/Fine $1,941,058.74Disgorgement/Restitution

Settled


Initiated By: PENNSYLVANIA SECURITIES COMMISSION
















Resolution:


Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $2,588,077.74 OF WHICH $647,019.00 ISPAYABLE TO THE INVESTOR PROTECTION TRUST AND $1,941,058.74 ISPAYABLE TO THE COMMONWEALTH OF PENNSYLVANIA.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS FINANCIAL SERVICES,INC. AND UBS SECURITIES LLC AGREED TO AN OFFER OF SETTLEMENTPURSUANT TO WHICH UBS AGREED TO REPURCHASE UP TO ANADDITIONAL $200MM IN ARS FROM INVESTORS NATIONALLY AND ALSOCONFIRMED THEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING ASPART OF REGULATORY SETTLEMENTS ENTERED INTO IN 2008.ADDITIONALLY, PENNSYLVANIA WILL RECEIVE A TOTAL PAYMENT OF$2,588,077.74 FROM UBS,FROM A TOTAL FINE OF $75MM PREVIOUSLYAGREED UPON WITH THE STATE OF MASSACHUSETTS AND THE NORTHAMERICAN SECURITIES ADMINISTRATORS ASSOCIATION.


Settled


i


Initiated By: OREGON DEPARTMENT OF CONSUMER & BUSINESS SERVICES, DIVISIONOF FINANCE & CORPORTE SECURITIES.





Docket/Case Number: S-10-0008



Other Product Type(s): AUCTION RATE SECURITIES.

Allegations: FAILURE TO SUPERVISE; DISHONEST AND UNETHICAL PRACTICES.









Resolution:

Other Sanctions Ordered: 1) BUY BACK OF ELIGIBLE ARS FROM ELIGIBLE CUSTOMERS.2) $61,868.04 PAYMENT FOR CONSUMER FINANCIAL EDUCATION ACCOUNT.

Sanction Details: 1) BUY BACK OF ELIGIBLE ARS FROM ELIGIBLE CUSTOMERS.2) CIVIL PENALTY AND PAYMENT FOR CONSUMER FINANCIAL EDUCATIONACCOUNT WERE PAID IN FULL AND RECEIVED 10/15/2010.

Regulator Statement MULTI-STATE INVESTIGATION COORDINATED BY NASAA, CONCERNINGAUCTION RATE SECURITIES.


No


Consent


Initiated By: OREGON DEPARTMENT OF CONSUMER & BUSINESS SERVICES, DIVISIONOF FINANCE & CORPORTE SECURITIES










Resolution: Consent







Resolution:


Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $1,237,360.72. THAT SUM INCLUDES A CIVILPENALTY OF $1,175,492.68 AND $61,868.04 FOR THE OREGONDEPARTMENT OF CONSUMER AND BUSINESS SERVICES CONSUMERFINANCIAL EDUCATION ACCOUNT.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,OREGON WILL RECEIVE A TOTAL PAYMENT OF $1,237,360.72 FROM UBS,FROM A TOTAL FINE OF $75MMPREVIOUSLY AGREED UPON WITH THE STATE OF MASSACHUSETTS ANDTHE NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION.


Consent


i


Initiated By: NEW JERSEY BUREAU OF SECURITIES






Allegations: UBS MARKETED ARS TO CLIENTS AS SAFE, LIQUID INSTRUMENTS. UBSDID NOT DISCLOSE ASPECTS OF ITS ARS PROGRAM TO ITS CLIENTS.UBS'S ARS PROGRAM WAS INCONSISTENT WITH HOW IT WAS PROMOTEDTO CLIENTS AND FINANCIAL ADVISORS. UBS DID NOT PROVIDE ITSFINANCIAL ADVISORS WITH ANY MANDATORY TRANING WITH RESPECT TOARS.








Cease and Desist




Resolution:

Other Sanctions Ordered: UBS SHALL TAKE CERTAIN MEASURES WITH RESPECT TO CERTAINCURRENT AND FORMER CUSTOMERS TO OFFER TO PURCHASE ELIGIBLEARS AT PAR.

Sanction Details: UBS'S CONDUCT CONSTITUTES DISHONEST AND UNETHICAL CONDUCT INTHE SECURITIES BUSINESS. UBS'S CONDUCT CONSTITUTES A FAILURETO REASONABLY SUPERVISE IT'S AGENTS.


No


Consent


Initiated By: STATE OF NEW JERSEY, BUREAU OF SECURITIES

















Resolution:


Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $3,790,487.02 TO THE STATE OF NEW JERSEY.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY, NEWJERSEY WILL RECEIVE A TOTAL PAYMENT OF $3,790,487.02 FROM UBS,FROM A TOTAL FINE OF $75MM PREVIOUSLY AGREED UPON WITH THESTATE OF MASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION.


Consent


i


Initiated By: CBOE





Docket/Case Number:



Allegations: CBOE ALLEGED 34 INSTANCES WHERE UBS FAILED TO CONTINUOUSLYQUOTE THE REQUIRED PERCENTAGE OF SERIES WITHIN AN OPTIONSCLASS.









Resolution:


Sanction Details: FINE $4000.00

Firm Statement CBOE DETERMINED THAT IN AUGUST 2010, UBS HAD IN 34 INSTANCESVIOLATED EXCHANGE RULE 8.85(A)(I) - DPM OBLIGATIONS IN REGARD TOCONTINUOUS QUOTING


Decision


i


Allegations: SECTION 17(A) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULES17A-3(A)(2), 17A-3(A)(7), AND 17A-4(I) THEREUNDER, NASD RULES 2110,3010, 3110(A): THE FIRM FAILED TO REASONABLY SUPERVISE A JUNIORTRADER ON ITS FIXED INCOME EMERGING MARKETS LATIN AMERICANDESK (THE LATAM DESK) WHO, BY VARIOUS MEANS, MADE FALSE ANDINACCURATE ENTRIES INTO THE FIRM'S TRADING SYSTEMS FOR NON-DELIVERABLE FORWARD (NDF) TRANSACTIONS AND BONDTRANSACTIONS, WHICH CAUSED INCORRECT CALCULATIONS OF HIS RISKPOSITIONS AND P&L, OVERSTATING HIS PROFITS AND UNDERSTATING HISLOSSES. IN CONTRAST TO OTHER TRADERS ON THE LATAM DESK, THEFIRM GAVE THE JUNIOR TRADER AUTHORITY TO ENTER NDFTRANSACTIONS DIRECTLY INTO TWO INTERNAL TRADING SYSTEMS. INEACH INSTANCE, THE JUNIOR TRADER'S PRESUMED GOAL WAS TOCONCEAL AN UNREALIZED LOSS ASSOCIATED WITH AN ACTUALTRANSACTION AND/OR CREATE THE APPEARANCE OF A FICTITIOUSPROFIT IN CONNECTION WITH BOTH ACTUAL AND FICTITIOUSTRANSACTIONS. BY MANIPULATING THESE TWO TRADING SYSTEMS, THEJUNIOR TRADER WAS ABLE TO MAKE UNDETECTED AMENDED, LATE,MISPRICED AND FICTITIOUS NDF TRANSACTIONS BY WHICH HECONCEALED MORE THAN $28 MILLION IN TRADING LOSSES. THE FIRM'SEXISTING POLICIES AND PROCEDURES DID NOT ADEQUATELY ADDRESSTHE JUNIOR TRADER'S ABILITY TO MAKE ENTRIES DIRECTLY INTO THETWO TRADING SYSTEMS. THE FIRM'S ELECTRONIC SUPERVISORYSYSTEM DID NOT CAPTURE NDF TRADE DATA AND THE FIRM FAILED TOESTABLISH SUPERVISORY SYSTEMS OR PROCEDURES TO REASONABLYENSURE THAT THE JUNIOR TRADER'S ENTRIES WERE COMPLETE ANDACCURATE AND THAT HIS TRADING SYSTEM ENTRIES MATCHED. THE FIRMLIKEWISE FAILED TO ESTABLISH POLICIES AND PROCEDURES PROVIDINGFOR ITS CREATION AND MAINTENANCE OF REQUIRED BOOKS ANDRECORDS OF NDF TRANSACTIONS ENTERED FOR ITS ACCOUNTS.ADDITIONALLY, THE FIRM FAILED TO HAVE WRITTEN SUPERVISORYPROCEDURES, FOR THE AMENDING, SETTLING AND CONFIRMING OF NDFTRANSACTIONS. AMENDMENTS TO NDF TRANSACTIONS WERECOMPLETED EITHER BY THE TRADER HIMSELF OR BY SUPPORT STAFF ATTHE DIRECTION OF THE TRADER WITHOUT ANY SUPERVISORY CONTROLSOR THE REQUIREMENT FOR SUPERVISORY APPROVAL. LIKEWISE, THEPROCESS FOR CONFIRMATION AND SETTLEMENT OF NDF TRANSACTIONSWAS COMPLETED BY STAFF OF THE PARENT COMPANY, WHOFORWARDED QUESTIONS AND PROBLEMS NOT TO THE TRADERS'SUPERVISOR BUT RATHER TO THE TRADER HIMSELF. SUPERVISORYNOTIFICATIONS WERE ONLY MADE IN THOSE CASES IN WHICH THEMATTER COULD NOT OTHERWISE BE RESOLVED. THIS PROCESSPERMITTED THE JUNIOR TRADER'S ACTIVITIES TO GO UNDETECTED BYTHE FIRM. THE JUNIOR TRADER'S ENTERED DATA REGARDING HIS BONDTRADES AS REQUIRED AND INITIALLY ACCURATELY. HOWEVER, ON ONEOR BOTH OF THE TWO DAYS BETWEEN TRADE DATE AND SETTLEMENTDATE, THE JUNIOR TRADER MANIPULATED THE PRICE OF THETRANSACTIONS IN BLOOMBERG IN ORDER TO CONCEAL LOSSES AND/ORCREATE THE APPEARANCE OF A FICTITIOUS AND/OR INFLATED PROFIT ONTHE TRADES. ON SETTLEMENT DATE, THE JUNIOR TRADER FINALLYADJUSTED THE PRICES IN BLOOMBERG BACK TO THE ACTUALTRANSACTION PRICES IN ORDER TO AVOID TRADE BREAKS. THE JUNIORTRADER CONCEALED LOSSES TO THE FIRM OF APPROXIMATELY $700,000THROUGH VARIOUS FALSE ENTRIES MADE IN THE FIRM'S BLOOMBERGSYSTEM. THE JUNIOR TRADER'S BOND DATE WAS NOT CAPTURED BY THEFIRM'S ELECTRONIC SUPERVISORY SYSTEM. ALTHOUGH THE FIRMGENERATED REPORTS FOR USE IN SUPERVISION OF BONDTRANSACTIONS, THESE REPORTS DID NOT CAPTURE THE JUNIORTRADER'S BOND DATE. THUS, THE JUNIOR TRADER'S TRADING OFCERTAIN BONDS WAS NOT CAPTURED WITHIN THE FIRM'S SUPERVISORYEXCEPTION REPORTS AND THEREFORE, NOT SUPERVISED. THE FIRMALSO FAILED TO PROVIDE THE JUNIOR TRADER'S SUPERVISOR WITHREPORTS CONCERNING THE JUNIOR TRADER'S TRADING IN NDF ANDCERTAIN BONDS THAT WERE NECESSARY TO SUPERVISE THE JUNIORTRADER'S ACTIVITIES. THE FIRM FAILED TO MAKE AND KEEP CURRENTCERTAIN MEMORANDUM OF EACH NDF TRANSACTION ENTERED BY THEJUNIOR TRADER, AS REQUIRED BY SEC RULE 17A-3(A)(7). [CONTINUED INCOMMENTS]







Initiated By: FINRA


SECTION 17(A) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULES17A-3(A)(2), 17A-3(A)(7), AND 17A-4(I) THEREUNDER, NASD RULES 2110,3010, 3110(A): THE FIRM FAILED TO REASONABLY SUPERVISE A JUNIORTRADER ON ITS FIXED INCOME EMERGING MARKETS LATIN AMERICANDESK (THE LATAM DESK) WHO, BY VARIOUS MEANS, MADE FALSE ANDINACCURATE ENTRIES INTO THE FIRM'S TRADING SYSTEMS FOR NON-DELIVERABLE FORWARD (NDF) TRANSACTIONS AND BONDTRANSACTIONS, WHICH CAUSED INCORRECT CALCULATIONS OF HIS RISKPOSITIONS AND P&L, OVERSTATING HIS PROFITS AND UNDERSTATING HISLOSSES. IN CONTRAST TO OTHER TRADERS ON THE LATAM DESK, THEFIRM GAVE THE JUNIOR TRADER AUTHORITY TO ENTER NDFTRANSACTIONS DIRECTLY INTO TWO INTERNAL TRADING SYSTEMS. INEACH INSTANCE, THE JUNIOR TRADER'S PRESUMED GOAL WAS TOCONCEAL AN UNREALIZED LOSS ASSOCIATED WITH AN ACTUALTRANSACTION AND/OR CREATE THE APPEARANCE OF A FICTITIOUSPROFIT IN CONNECTION WITH BOTH ACTUAL AND FICTITIOUSTRANSACTIONS. BY MANIPULATING THESE TWO TRADING SYSTEMS, THEJUNIOR TRADER WAS ABLE TO MAKE UNDETECTED AMENDED, LATE,MISPRICED AND FICTITIOUS NDF TRANSACTIONS BY WHICH HECONCEALED MORE THAN $28 MILLION IN TRADING LOSSES. THE FIRM'SEXISTING POLICIES AND PROCEDURES DID NOT ADEQUATELY ADDRESSTHE JUNIOR TRADER'S ABILITY TO MAKE ENTRIES DIRECTLY INTO THETWO TRADING SYSTEMS. THE FIRM'S ELECTRONIC SUPERVISORYSYSTEM DID NOT CAPTURE NDF TRADE DATA AND THE FIRM FAILED TOESTABLISH SUPERVISORY SYSTEMS OR PROCEDURES TO REASONABLYENSURE THAT THE JUNIOR TRADER'S ENTRIES WERE COMPLETE ANDACCURATE AND THAT HIS TRADING SYSTEM ENTRIES MATCHED. THE FIRMLIKEWISE FAILED TO ESTABLISH POLICIES AND PROCEDURES PROVIDINGFOR ITS CREATION AND MAINTENANCE OF REQUIRED BOOKS ANDRECORDS OF NDF TRANSACTIONS ENTERED FOR ITS ACCOUNTS.ADDITIONALLY, THE FIRM FAILED TO HAVE WRITTEN SUPERVISORYPROCEDURES, FOR THE AMENDING, SETTLING AND CONFIRMING OF NDFTRANSACTIONS. AMENDMENTS TO NDF TRANSACTIONS WERECOMPLETED EITHER BY THE TRADER HIMSELF OR BY SUPPORT STAFF ATTHE DIRECTION OF THE TRADER WITHOUT ANY SUPERVISORY CONTROLSOR THE REQUIREMENT FOR SUPERVISORY APPROVAL. LIKEWISE, THEPROCESS FOR CONFIRMATION AND SETTLEMENT OF NDF TRANSACTIONSWAS COMPLETED BY STAFF OF THE PARENT COMPANY, WHOFORWARDED QUESTIONS AND PROBLEMS NOT TO THE TRADERS'SUPERVISOR BUT RATHER TO THE TRADER HIMSELF. SUPERVISORYNOTIFICATIONS WERE ONLY MADE IN THOSE CASES IN WHICH THEMATTER COULD NOT OTHERWISE BE RESOLVED. THIS PROCESSPERMITTED THE JUNIOR TRADER'S ACTIVITIES TO GO UNDETECTED BYTHE FIRM. THE JUNIOR TRADER'S ENTERED DATA REGARDING HIS BONDTRADES AS REQUIRED AND INITIALLY ACCURATELY. HOWEVER, ON ONEOR BOTH OF THE TWO DAYS BETWEEN TRADE DATE AND SETTLEMENTDATE, THE JUNIOR TRADER MANIPULATED THE PRICE OF THETRANSACTIONS IN BLOOMBERG IN ORDER TO CONCEAL LOSSES AND/ORCREATE THE APPEARANCE OF A FICTITIOUS AND/OR INFLATED PROFIT ONTHE TRADES. ON SETTLEMENT DATE, THE JUNIOR TRADER FINALLYADJUSTED THE PRICES IN BLOOMBERG BACK TO THE ACTUALTRANSACTION PRICES IN ORDER TO AVOID TRADE BREAKS. THE JUNIORTRADER CONCEALED LOSSES TO THE FIRM OF APPROXIMATELY $700,000THROUGH VARIOUS FALSE ENTRIES MADE IN THE FIRM'S BLOOMBERGSYSTEM. THE JUNIOR TRADER'S BOND DATE WAS NOT CAPTURED BY THEFIRM'S ELECTRONIC SUPERVISORY SYSTEM. ALTHOUGH THE FIRMGENERATED REPORTS FOR USE IN SUPERVISION OF BONDTRANSACTIONS, THESE REPORTS DID NOT CAPTURE THE JUNIORTRADER'S BOND DATE. THUS, THE JUNIOR TRADER'S TRADING OFCERTAIN BONDS WAS NOT CAPTURED WITHIN THE FIRM'S SUPERVISORYEXCEPTION REPORTS AND THEREFORE, NOT SUPERVISED. THE FIRMALSO FAILED TO PROVIDE THE JUNIOR TRADER'S SUPERVISOR WITHREPORTS CONCERNING THE JUNIOR TRADER'S TRADING IN NDF ANDCERTAIN BONDS THAT WERE NECESSARY TO SUPERVISE THE JUNIORTRADER'S ACTIVITIES. THE FIRM FAILED TO MAKE AND KEEP CURRENTCERTAIN MEMORANDUM OF EACH NDF TRANSACTION ENTERED BY THEJUNIOR TRADER, AS REQUIRED BY SEC RULE 17A-3(A)(7). [CONTINUED INCOMMENTS]







Other


N/A




Other Product Type(s): FOREIGN EXCHANGE PRODUCTS


Resolution:



Regulator Statement [CONTINUED FROM ALLEGATIONS]: NDF RECORDS, WHICH INCLUDED AMEMORANDUM OF EACH PURCHASE AND SALE FOR THE FIRM'SACCOUNT, WERE CREATED AND MAINTAINED BY THE PARENT COMPANY,NOT THE FIRM. ADDITIONALLY, BASED ON FALSE, DELAYED ANDFICTITIOUS ENTRIES MADE BY THE JUNIOR TRADER IN CONNECTION TOHIS NDF AND CERTAIN BOND TRANSACTIONS, THE FIRM'S RECORDS OFHIS AND THE LATAM DESK'S OVERALL P&L AND CORRESPONDING RISKPOSITIONS WERE NOT ACCURATE, AS REQUIRED BY SEC RULE 17A-3(A)(2). WHEN THE ISSUES CONCERNING THE JUNIOR TRADER'S TRADINGCAME TO LIGHT, THE FIRM CONDUCTED AN INTERNAL INVESTIGATION TOIDENTIFY THE ERRANT BOND AND NDF TRANSACTIONS AND CALCULATETHE LOSSES INCURRED IN CONNECTION WITH THEM. THEREAFTER, THEFIRM INSTITUTED REMEDIAL MEASURES TO PREVENT A RECURRENCE INTHE FUTURE.


No



iReporting Source:








Initiated By: FINRA


Other


N/A




Other Product Type(s): NON-DELIVERABLE FORWARDS

Allegations: BETWEEN JANUARY AND MAY 2006 (THE "RELEVANT PERIOD"), UBS FAILEDTO REASONABLY SUPERVISE FRANCESCO FISKE RUSCIANO("RUSCIANO"), A JUNIOR TRADER ON ITS FIXED INCOME EMERGINGMARKETS LATIN AMERICAN DESK (THE "LATAM DESK") WHO, BY VARIOUSMEANS, MADE FALSE AND INACCURATE ENTRIES INTO THE FIRM'STRADING SYSTEMS FOR NON-DELIVERABLE FORWARD ("NDF")TRANSACTIONS AND BRAZIL 40 BOND TRANSACTIONS, WHICH CAUSEDINCORRECT CALCULATIONS OF HIS RISK POSITIONS AND P&L ,OVERSTATING HIS PROFITS AND UNDERSTATING HIS LOSSES. INCONTRAST TO OTHER TRADERS ON THE LATAM DESK, THE FIRM GAVERUSCIANO AUTHORITY TO ENTER NDF TRANSACTIONS DIRECTLY INTOTWO TRADING SYSTEMS. BY MANIPULATING THESE TWO TRADINGSYSTEMS, RUSCIANO WAS ABLE TO MAKE UNDETECTED AMENDED, LATE,MISPRICED AND FICTITIOUS NDF TRANSACTIONS BY WHICH HECONCEALED MORE THAN 28 MILLION DOLLARS IN TRADING LOSSES. THEFIRM ALSO FAILED TO PROVIDE RUSCIANO'S SUPERVISOR WITH REPORTSCONCERNING RUSCIANO'S TRADING IN NDFS AND BRAZIL 40 BONDS THATWERE NECESSARY TO SUPERVISE RUSCIANO'S ACTIVITIES. ADDITONALLY,THE FIRM FAILED TO HAVE ADEQUATE WRITTEN SUPERVISORYPROCEDURES FOR SUPERVISION OF RUSCIANO'S NDF TRADING AND FORTHE MAINTENANCE OF BOOKS AND RECORDS RECORDING SUCH NDFTRADING; AND FAILED TO MAKE AND KEEP CURRENT MEMORANDA OFTHE NDF TRANSACTIONS RUSCIANO ENTERED FOR THE FIRM'S ACCOUNT,IMPROPERLY RELYING ON ITS PARENT COMPANY, UBS AG, TO KEEPTHESE RECORDS ON ITS BEHALF. THE FOREGOING VIOLATIONSRESULTED IN THE FIRM'S CREATION AND MAINTENANCE OF LEDGERSTHAT INACCURATELY REFLECTED UNREALIZED PROFITS AND LOSSES;AND THE RISKS ASSOCIATED WITH THE NDF AND BRAZIL 40 BONDPOSITIONS.


Resolution: Acceptance, Waiver & Consent(AWC) 307©2022 FINRA. All rights reserved. Report about UBS SECURITIES LLC







Resolution:






i


Initiated By: MAINE SECURITIES DIVISION





Docket/Case Number:






Resolution:


Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $249,018.17 TO THE STATE OF MAINE.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,MAINE WILL RECEIVE A TOTAL PAYMENT OF $249,018.17 FROM UBS, FROMA TOTAL FINE OF $75MMPREVIOUSLY AGREED UPON WITH THE STATE OF MASSACHUSETTS ANDTHE NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION.


Consent







WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,MAINE WILL RECEIVE A TOTAL PAYMENT OF $249,018.17 FROM UBS, FROMA TOTAL FINE OF $75MMPREVIOUSLY AGREED UPON WITH THE STATE OF MASSACHUSETTS ANDTHE NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION.


i


Initiated By: IOWA INSURANCE DIVISION SECURITIES BUREAU





Docket/Case Number:






Resolution:


Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $455,918.09 TO THE STATE OF IOWA.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY, IOWAWILL RECEIVE A TOTAL PAYMENT OF $455,918.09 FROM UBS, FROM ATOTAL FINE OF $75MM PREVIOUSLY AGREED UPON WITH THE STATE OFMASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION.


Consent






www.finra.org/brokercheck User GuidanceWITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY, IOWAWILL RECEIVE A TOTAL PAYMENT OF $455,918.09 FROM UBS, FROM ATOTAL FINE OF $75MM PREVIOUSLY AGREED UPON WITH THE STATE OFMASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION.


i









Allegations: **11/30/2010**CONSENTED TO FINDINGS: FOR THE SOLE PURPOSE OFSETTLING THIS DISCIPLINARY PROCEEDING, WITHOUT ADJUDICATION OFANY ISSUES OF LAW OR FACT, AND WITHOUT ADMITTING OR DENYING ANYALLEGATIONS OR FINDINGS, UBS SECURITIES LLC ("UBS") STIPULATEDTHAT DURING THE TIME PERIODS FROM NOVEMBER 10, 2006 THROUGHMAY 18, 2007 ("FIRST RELEVANT PERIOD") AND FROM JANUARY 27, 2008THROUGH AUGUST 2008 (THE "SECOND RELEVANT PERIOD"), IT1.VIOLATED NYSE ARCA EQUITIES RULE 7.38(C)(2) ON NUMEROUSOCCASIONS WHEN AS AN ETP HOLDER IT UNBUNDLED ROUND LOTS FORTHE PURPOSE OF ENTERING APPROXIMATELY 8,800 ODD-LOT LIMITORDERS IN COMPARABLE AMOUNTS.2.VIOLATED NYSE ARCA EQUITIES RULE 6.18 BY FAILING TO ESTABLISH,MAINTAIN AND/OR ENFORCE APPROPRIATE WRITTEN POLICIES ANDPROCEDURES FOR SUPERVISION AND CONTROL, INCLUDING A SEPARATESYSTEM OF FOLLOW-UP AND REVIEW, WITH RESPECT TO ODD LOTTRANSACTIONS ON THE NYSE ARCA MARKETPLACE.STIPULATEDSANCTION: NYSE ARCA LLC1. CENSURE; AND 2. FINE IN THE AMOUNT OF $175,000.


Resolution: Decision310©2022 FINRA. All rights reserved. Report about UBS SECURITIES LLC






Resolution:


Sanction Details: **2/2/11** DECISION NO. 11-ARCA-2 ISSUED BY OFFICE OF HEARINGOFFICERS NYSE ARCA UBS VIOLATED NYSE ARCA EQUITIES RULE 7.38(C)(2) ON NUMEROUS OCCASIONS WHEN AS AN ETP HOLDER ITUNBUNDLED ROUND LOTS FOR THE PURPOSE OF ENTERINGAPPROXIMATELY 8,800 ODD-LOT LIMIT ORDERS IN COMPARABLEAMOUNTS, AND VIOLATED NYSE ARCA EQUITIES RULE 6.18 BY FAILING TOESTABLISH, MAINTAIN AND/OR ENFORCE APPROPRIATE WRITTENPOLICIES AND PROCEDURES FOR SUPERVISION AND CONTROL,INCLUDING A SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW, WITHRESPECT TO ODD LOT TRANSACTIONS ON THE NYSE ARCAMARKETPLACE. CONSENTED TO CENSURE AND FINE OF $175,000.

Regulator Statement **2/2/11** THE DECISION IS FINAL.


No


Decision


Allegations: FOR THE SOLE PURPOSE OF SETTLING THIS DISCIPLINARY PROCEEDING,WITHOUT ADJUDICATION OF ANY ISSUES OF LAW OR FACT, AND WITHOUTADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGS, UBSSECURITIES LLC ("UBS") STIPULATED THAT DURING THE TIME PERIODSFROM NOVEMBER 10, 2006 THROUGH MAY 18, 2007 ("FIRST RELEVANTPERIOD") AND FROM JANUARY 27, 2008 THROUGH AUGUST 2008 (THE "SECOND RELEVANT PERIOD"), IT 1.VIOLATED NYSE ARCA EQUITIES RULE7.38(C)(2) ON NUMEROUS OCCASIONS WHEN AS AN ETP HOLDER ITUNBUNDLED ROUND LOTS FOR THE PURPOSE OF ENTERINGAPPROXIMATELY 8,800 ODD-LOT LIMIT ORDERS IN COMPARABLEAMOUNTS. 2.VIOLATED NYSE ARCA EQUITIES RULE 6.18 BY FAILING TOESTABLISH, MAINTAIN AND/OR ENFORCE APPROPRIATE WRITTENPOLICIES AND PROCEDURES FOR SUPERVISION AND CONTROL,INCLUDING A SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW, WITHRESPECT TO ODD LOT TRANSACTIONS ON THE NYSE ARCAMARKETPLACE. STIPULATED SANCTION: NYSE ARCA LLC 1. CENSURE;AND 2. FINE IN THE AMOUNT OF $175,000.







Initiated By: NYSE ARCA


Censure


FINE OF $175,000





FOR THE SOLE PURPOSE OF SETTLING THIS DISCIPLINARY PROCEEDING,WITHOUT ADJUDICATION OF ANY ISSUES OF LAW OR FACT, AND WITHOUTADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGS, UBSSECURITIES LLC ("UBS") STIPULATED THAT DURING THE TIME PERIODSFROM NOVEMBER 10, 2006 THROUGH MAY 18, 2007 ("FIRST RELEVANTPERIOD") AND FROM JANUARY 27, 2008 THROUGH AUGUST 2008 (THE "SECOND RELEVANT PERIOD"), IT 1.VIOLATED NYSE ARCA EQUITIES RULE7.38(C)(2) ON NUMEROUS OCCASIONS WHEN AS AN ETP HOLDER ITUNBUNDLED ROUND LOTS FOR THE PURPOSE OF ENTERINGAPPROXIMATELY 8,800 ODD-LOT LIMIT ORDERS IN COMPARABLEAMOUNTS. 2.VIOLATED NYSE ARCA EQUITIES RULE 6.18 BY FAILING TOESTABLISH, MAINTAIN AND/OR ENFORCE APPROPRIATE WRITTENPOLICIES AND PROCEDURES FOR SUPERVISION AND CONTROL,INCLUDING A SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW, WITHRESPECT TO ODD LOT TRANSACTIONS ON THE NYSE ARCAMARKETPLACE. STIPULATED SANCTION: NYSE ARCA LLC 1. CENSURE;AND 2. FINE IN THE AMOUNT OF $175,000.


Resolution:


Sanction Details: DECISION NO. 11-ARCA-2 ISSUED BY OFFICE OF HEARING OFFICERS NYSEARCA. UBS VIOLATED NYSE ARCA EQUITIES RULE 7.38(C)(2) ONNUMEROUS OCCASIONS WHEN AS AN ETP HOLDER IT UNBUNDLEDROUND LOTS FOR THE PURPOSE OF ENTERING APPROXIMATELY 8,800ODD-LOT LIMIT ORDERS IN COMPARABLE AMOUNTS, AND VIOLATED NYSEARCA EQUITIES RULE 6.18 BY FAILING TO ESTABLISH, MAINTAIN AND/ORENFORCE APPROPRIATE WRITTEN POLICIES AND PROCEDURES FORSUPERVISION AND CONTROL, INCLUDING A SEPARATE SYSTEM OFFOLLOW-UP AND REVIEW, WITH RESPECT TO ODD LOT TRANSACTIONSON THE NYSE ARCA MARKETPLACE. CONSENTED TO CENSURE AND FINEOF $175,000.


Decision


i


Allegations: **11/30/2010**STIPULATION OF FACTS AND CONSENT TO PENALTY ANDOFFER OF SETTLEMENT AND CONSENT FILED BY FINRA MARKETREGULATION, LEGAL SECTION AND PENDING.FOR THE SOLE PURPOSE OF SETTLING THIS DISCIPLINARY PROCEEDING,WITHOUT ADJUDICATION OF ANY ISSUES OF LAW OR FACT, AND WITHOUTADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGS, UBSSTIPULATED THAT; IT 1. VIOLATED NYSE RULE 411(B)(1) BY ENTERINGTHOUSANDS OF PRINCIPAL ODD-LOT MARKET ORDERS FOR EXECUTIONON THE NYSE IN THE SAME STOCK ON THE SAME SIDE OF THE MARKET,PRE-OPENING THAT AGGREGATED 100 SHARES OR MORE WITHOUTHAVING THOSE ORDERS CONSOLIDATED INTO ROUND-LOTS AS FAR ASPOSSIBLE DURING THE PERIOD FROM DECEMBER 2007 THROUGHDECEMBER 2009; 2.VIOLATING NYSE RULE 410A DURING THE PERIODFROM JULY 2006 THROUGH FEBRUARY 2010 BY FAILING ONAPPROXIMATELY 437 OCCASIONS TO SUBMIT COMPLETE AND ACCURATETRADING INFORMATION THROUGH THE SUBMISSION OF BLUE SHEETS INRESPONSE TO REQUESTS FOR SUCH INFORMATION BY NYSEREGULATION; AND, 3.VIOLATED NYSE RULE 342 BY FAILING TOREASONABLY SUPERVISE AND IMPLEMENT ADEQUATE CONTROLS,INCLUDING A SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW,REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULESAND POLICIES CONCERNING CERTAIN PRE-OPENING ODD-LOT ORDERSROUTED TO THE NYSE, AND PERTAINING TO THE SUBMISSION OFCOMPLETE AND ACCURATE BLUE SHEET DATA.STIPULATED SANCTION: NEW YORK STOCK EXCHANGE LLC1. CENSURE; AND 2. FINE IN THE AMOUNT OF $225,000.











Docket/Case Number: 11-NYSE-2



**11/30/2010**STIPULATION OF FACTS AND CONSENT TO PENALTY ANDOFFER OF SETTLEMENT AND CONSENT FILED BY FINRA MARKETREGULATION, LEGAL SECTION AND PENDING.FOR THE SOLE PURPOSE OF SETTLING THIS DISCIPLINARY PROCEEDING,WITHOUT ADJUDICATION OF ANY ISSUES OF LAW OR FACT, AND WITHOUTADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGS, UBSSTIPULATED THAT; IT 1. VIOLATED NYSE RULE 411(B)(1) BY ENTERINGTHOUSANDS OF PRINCIPAL ODD-LOT MARKET ORDERS FOR EXECUTIONON THE NYSE IN THE SAME STOCK ON THE SAME SIDE OF THE MARKET,PRE-OPENING THAT AGGREGATED 100 SHARES OR MORE WITHOUTHAVING THOSE ORDERS CONSOLIDATED INTO ROUND-LOTS AS FAR ASPOSSIBLE DURING THE PERIOD FROM DECEMBER 2007 THROUGHDECEMBER 2009; 2.VIOLATING NYSE RULE 410A DURING THE PERIODFROM JULY 2006 THROUGH FEBRUARY 2010 BY FAILING ONAPPROXIMATELY 437 OCCASIONS TO SUBMIT COMPLETE AND ACCURATETRADING INFORMATION THROUGH THE SUBMISSION OF BLUE SHEETS INRESPONSE TO REQUESTS FOR SUCH INFORMATION BY NYSEREGULATION; AND, 3.VIOLATED NYSE RULE 342 BY FAILING TOREASONABLY SUPERVISE AND IMPLEMENT ADEQUATE CONTROLS,INCLUDING A SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW,REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULESAND POLICIES CONCERNING CERTAIN PRE-OPENING ODD-LOT ORDERSROUTED TO THE NYSE, AND PERTAINING TO THE SUBMISSION OFCOMPLETE AND ACCURATE BLUE SHEET DATA.STIPULATED SANCTION: NEW YORK STOCK EXCHANGE LLC1. CENSURE; AND 2. FINE IN THE AMOUNT OF $225,000.


Resolution:


No


Decision







Sanction Details: **2/3/11** DECISION NO. 11-NYSE-2 ISSUED BY OFFICE OF HEARINGOFFICERS NYSE UBS VIOLATED NYSE RULE 411(B)(1) BY ENTERINGTHOUSANDS OF PRINCIPAL ODD-LOT MARKET ORDERS FOR EXECUTIONON THE NYSE IN THE SAME STOCK ON THE SAME SIDE OF THE MARKET,PRE-OPENING THAT AGGREGATED 100 SHARES OR MORE WITHOUTHAVING THOSE ORDERS CONSOLIDATED INTO ROUND-LOTS AS FAR ASPOSSIBLE DURING THE PERIOD FROM DECEMBER 2007 THROUGHDECEMBER 2009; VIOLATED NYSE RULE 410A DURING THE PERIOD FROMJULY 2006 THROUGH FEBRUARY 2010 BY FAILING ON APPROXIMATELY 437OCCASIONS TO SUBMIT COMPLETE AND ACCURATE TRADINGINFORMATION THROUGH THE SUBMISSION OF BLUE SHEETS INRESPONSE TO REQUESTS FOR SUCH INFORMATION BY NYSEREGULATION; AND, VIOLATED NYSE RULE 342 BY FAILING TO REASONABLYSUPERVISE AND IMPLEMENT ADEQUATE CONTROLS, INCLUDING ASEPARATE SYSTEM OF FOLLOW-UP AND REVIEW, REASONABLY DESIGNEDTO ACHIEVE COMPLIANCE WITH NYSE RULES AND POLICIES CONCERNINGCERTAIN PRE-OPENING ODD-LOT ORDERS ROUTED TO THE NYSE, ANDPERTAINING TO THE SUBMISSION OF COMPLETE AND ACCURATE BLUESHEET DATA. CONSENTED TO CENSURE AND A FINE OF $225,000.

Regulator Statement **2/3/11** UNLESS A REVIEW HAS BEEN REQUESTED BY ANY PERSON ORBODY AUTHORIZED BY NYSE RULE 476(G), THIS DECISION WILL BECOMEFINAL 25 CALENDAR DAYS AFTER NOTICE OF THE HEARING BOARD'SDETERMINATION HAS BEEN SERVED UPON THE RESPONDENT.**3/1/11** THE DECISION BECAME FINAL AS OF THE CLOSE OF BUSINESSON FEBRUARY 25, 2011 AND THE FINE BECAME PAYABLE ON THAT SAMEDATE.



Allegations: STIPULATION OF FACTS AND CONSENT TO PENALTY AND OFFER OFSETTLEMENT AND CONSENT FILED BY FINRA MARKET REGULATION,LEGAL SECTION. FOR THE SOLE PURPOSE OF SETTLING THISDISCIPLINARY PROCEEDING, WITHOUT ADJUDICATION OF ANY ISSUES OFLAW OR FACT, AND WITHOUT ADMITTING OR DENYING ANY ALLEGATIONSOR FINDINGS, UBS STIPULATED THAT IT 1. VIOLATED NYSE RULE 411(B)(1)BY ENTERING THOUSANDS OF PRINCIPAL ODD-LOT MARKET ORDERS FOREXECUTION ON THE NYSE IN THE SAME STOCK ON THE SAME SIDE OFTHE MARKET, PRE-OPENING THAT AGGREGATED 100 SHARES OR MOREWITHOUT HAVING THOSE ORDERS CONSOLIDATED INTO ROUND-LOTS ASFAR AS POSSIBLE DURING THE PERIOD FROM DECEMBER 2007 THROUGHDECEMBER 2009; 2.VIOLATING NYSE RULE 410A DURING THE PERIODFROM JULY 2006 THROUGH FEBRUARY 2010 BY FAILING ONAPPROXIMATELY 437 OCCASIONS TO SUBMIT COMPLETE AND ACCURATETRADING INFORMATION THROUGH THE SUBMISSION OF BLUE SHEETS INRESPONSE TO REQUESTS FOR SUCH INFORMATION BY NYSEREGULATION; AND, 3.VIOLATED NYSE RULE 342 BY FAILING TOREASONABLY SUPERVISE AND IMPLEMENT ADEQUATE CONTROLS,INCLUDING A SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW,REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULESAND POLICIES CONCERNING CERTAIN PRE-OPENING ODD-LOT ORDERSROUTED TO THE NYSE, AND PERTAINING TO THE SUBMISSION OFCOMPLETE AND ACCURATE BLUE SHEET DATA. STIPULATED SANCTION:NEW YORK STOCK EXCHANGE LLC 1. CENSURE; AND 2. FINE IN THEAMOUNT OF $225,000.









Censure


FINE OF $225,000


Docket/Case Number: 11-NYSE-2


Other Product Type(s): EQUITIES

STIPULATION OF FACTS AND CONSENT TO PENALTY AND OFFER OFSETTLEMENT AND CONSENT FILED BY FINRA MARKET REGULATION,LEGAL SECTION. FOR THE SOLE PURPOSE OF SETTLING THISDISCIPLINARY PROCEEDING, WITHOUT ADJUDICATION OF ANY ISSUES OFLAW OR FACT, AND WITHOUT ADMITTING OR DENYING ANY ALLEGATIONSOR FINDINGS, UBS STIPULATED THAT IT 1. VIOLATED NYSE RULE 411(B)(1)BY ENTERING THOUSANDS OF PRINCIPAL ODD-LOT MARKET ORDERS FOREXECUTION ON THE NYSE IN THE SAME STOCK ON THE SAME SIDE OFTHE MARKET, PRE-OPENING THAT AGGREGATED 100 SHARES OR MOREWITHOUT HAVING THOSE ORDERS CONSOLIDATED INTO ROUND-LOTS ASFAR AS POSSIBLE DURING THE PERIOD FROM DECEMBER 2007 THROUGHDECEMBER 2009; 2.VIOLATING NYSE RULE 410A DURING THE PERIODFROM JULY 2006 THROUGH FEBRUARY 2010 BY FAILING ONAPPROXIMATELY 437 OCCASIONS TO SUBMIT COMPLETE AND ACCURATETRADING INFORMATION THROUGH THE SUBMISSION OF BLUE SHEETS INRESPONSE TO REQUESTS FOR SUCH INFORMATION BY NYSEREGULATION; AND, 3.VIOLATED NYSE RULE 342 BY FAILING TOREASONABLY SUPERVISE AND IMPLEMENT ADEQUATE CONTROLS,INCLUDING A SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW,REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULESAND POLICIES CONCERNING CERTAIN PRE-OPENING ODD-LOT ORDERSROUTED TO THE NYSE, AND PERTAINING TO THE SUBMISSION OFCOMPLETE AND ACCURATE BLUE SHEET DATA. STIPULATED SANCTION:NEW YORK STOCK EXCHANGE LLC 1. CENSURE; AND 2. FINE IN THEAMOUNT OF $225,000.


Resolution:


Sanction Details: DECISION NO. 11-NYSE-2 ISSUED BY OFFICE OF HEARING OFFICERSNYSE. UBS VIOLATED NYSE RULE 411(B)(1) BY ENTERING THOUSANDS OFPRINCIPAL ODD-LOT MARKET ORDERS FOR EXECUTION ON THE NYSE INTHE SAME STOCK ON THE SAME SIDE OF THE MARKET, PRE-OPENINGTHAT AGGREGATED 100 SHARES OR MORE WITHOUT HAVING THOSEORDERS CONSOLIDATED INTO ROUND-LOTS AS FAR AS POSSIBLE DURINGTHE PERIOD FROM DECEMBER 2007 THROUGH DECEMBER 2009;VIOLATED NYSE RULE 410A DURING THE PERIOD FROM JULY 2006THROUGH FEBRUARY 2010 BY FAILING ON APPROXIMATELY 437OCCASIONS TO SUBMIT COMPLETE AND ACCURATE TRADINGINFORMATION THROUGH THE SUBMISSION OF BLUE SHEETS INRESPONSE TO REQUESTS FOR SUCH INFORMATION BY NYSEREGULATION; AND, VIOLATED NYSE RULE 342 BY FAILING TO REASONABLYSUPERVISE AND IMPLEMENT ADEQUATE CONTROLS, INCLUDING ASEPARATE SYSTEM OF FOLLOW-UP AND REVIEW, REASONABLY DESIGNEDTO ACHIEVE COMPLIANCE WITH NYSE RULES AND POLICIES CONCERNINGCERTAIN PRE-OPENING ODDLOT ORDERS ROUTED TO THE NYSE, ANDPERTAINING TO THE SUBMISSION OF COMPLETE AND ACCURATE BLUESHEET DATA. CONSENTED TO CENSURE AND A FINE OF $225,000.


Decision






DECISION NO. 11-NYSE-2 ISSUED BY OFFICE OF HEARING OFFICERSNYSE. UBS VIOLATED NYSE RULE 411(B)(1) BY ENTERING THOUSANDS OFPRINCIPAL ODD-LOT MARKET ORDERS FOR EXECUTION ON THE NYSE INTHE SAME STOCK ON THE SAME SIDE OF THE MARKET, PRE-OPENINGTHAT AGGREGATED 100 SHARES OR MORE WITHOUT HAVING THOSEORDERS CONSOLIDATED INTO ROUND-LOTS AS FAR AS POSSIBLE DURINGTHE PERIOD FROM DECEMBER 2007 THROUGH DECEMBER 2009;VIOLATED NYSE RULE 410A DURING THE PERIOD FROM JULY 2006THROUGH FEBRUARY 2010 BY FAILING ON APPROXIMATELY 437OCCASIONS TO SUBMIT COMPLETE AND ACCURATE TRADINGINFORMATION THROUGH THE SUBMISSION OF BLUE SHEETS INRESPONSE TO REQUESTS FOR SUCH INFORMATION BY NYSEREGULATION; AND, VIOLATED NYSE RULE 342 BY FAILING TO REASONABLYSUPERVISE AND IMPLEMENT ADEQUATE CONTROLS, INCLUDING ASEPARATE SYSTEM OF FOLLOW-UP AND REVIEW, REASONABLY DESIGNEDTO ACHIEVE COMPLIANCE WITH NYSE RULES AND POLICIES CONCERNINGCERTAIN PRE-OPENING ODDLOT ORDERS ROUTED TO THE NYSE, ANDPERTAINING TO THE SUBMISSION OF COMPLETE AND ACCURATE BLUESHEET DATA. CONSENTED TO CENSURE AND A FINE OF $225,000.


i


Initiated By: GEORGIA OFFICE OF SECRETARY OF STATE DIVISION OF BUSINESSSERVICES AND REGULATION





Docket/Case Number:






Resolution:


Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $1,279,856.07 TO THE STATE OF GEORGIA.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,GEORGIA WILL RECEIVE A TOTAL PAYMENT OF $1,279,856.07 FROM UBS,FROM A TOTAL FINE OF $75MMPREVIOUSLY AGREED UPON WITH THE STATE OF MASSACHUSETTS ANDTHE NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION.


Consent






Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,GEORGIA WILL RECEIVE A TOTAL PAYMENT OF $1,279,856.07 FROM UBS,FROM A TOTAL FINE OF $75MMPREVIOUSLY AGREED UPON WITH THE STATE OF MASSACHUSETTS ANDTHE NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION.


i


Initiated By: DELAWARE DEPT OF JUSTICE DIVISION OF SECURITIES





Docket/Case Number:






Resolution:


Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $269,248.97 TO THE STATE OF DELAWARE.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,DELAWARE WILL RECEIVE A TOTAL PAYMENT OF $269,248.97 FROM UBS,FROM A TOTAL FINE OF $75MM PREVIOUSLY AGREED UPON WITH THESTATE OF MASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION.


Consent






WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,DELAWARE WILL RECEIVE A TOTAL PAYMENT OF $269,248.97 FROM UBS,FROM A TOTAL FINE OF $75MM PREVIOUSLY AGREED UPON WITH THESTATE OF MASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION.


i


Initiated By: CONNECTICUT





Docket/Case Number: CO-10-7506-S




Allegations: ON MAY 26, 2010, THE CONNECTICUT BANKING COMMISSIONER ENTEREDA CONSENT ORDER (DOCKET NO. CO-10-7506-S) WITH RESPECT TO UBSSECURITIES LLC AND UBS FINANCIAL SERVICES INC. THE SETTLEMENTFOLLOWED A MULTI-STATE INVESTIGATION FOCUSING ON THE FIRMS'SALE OF ARS, WHICH BROKERAGE FIRMS MARKETED AS SAFE AND LIQUIDALTERNATIVES TO CASH. THE CONSENT ORDER ALLEGED THAT, INCONNECTION WITH THE SALE OF AUCTION RATE SECURITIES 1) UBSFAILED TO REASONABLY SUPERVISE ITS AGENTS; AND 2) UBS ENGAGEDIN DISHONEST AND UNETHICAL PRACTICES IN VIOLATION OF SECTION36B-4(B) OF THE CONNECTICUT UNIFORM SECURITIES ACT.



Resolution:


Yes

Consent






Other Sanctions Ordered: THE CONSENT ORDER DIRECTED THAT UBS SECURITIES LLC AND UBSFINANCIAL SERVICES INC. PAY A $2,098,792.26 FINE TO THE DEPARTMENTIN RESOLUTION OF THE MATTER.

Sanction Details: SEE RESPONSE TO ITEM 13.B.


Yes



Initiated By: CONNECTICUT DEPARTMENT OF BANKING SECURITIES AND BUSINESSINVESTMENTS DIVISION











Resolution:


Sanction Details: UBS HAS PAID THE SUM OF $2,098,792.26 TO THE STATE OF CONNECTICUT

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES,INC.CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,CONNECTICUT WILL RECEIVE A TOTAL PAYMENT OF $2,098,792.26 FROMUBS, FROM A TOTAL FINE OF$75MM PREVIOUSLY AGREED UPON WITH THE STATE OFMASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION.


Consent






WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES,INC.CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,CONNECTICUT WILL RECEIVE A TOTAL PAYMENT OF $2,098,792.26 FROMUBS, FROM A TOTAL FINE OF$75MM PREVIOUSLY AGREED UPON WITH THE STATE OFMASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION.


i


Initiated By: ALABAMA SECURITIES COMMISSION


Other


CONSENT


Docket/Case Number:






Resolution:


Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE ALABAMASECURITIES ACT. UBS HAS PAID THE SUM OF $328,180.42 TO THE STATEOF ALABAMA.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES,INC.CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,ALABAMA WILL RECEIVE A TOTAL PAYMENT OF $328,180.42 FROM UBS,FROM A TOTAL FINE OF $75MMPREVIOUSLY AGREED UPON WITH THE STATE OF MASSACHUSETTS ANDTHE NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION.


Consent






WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES,INC.CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,ALABAMA WILL RECEIVE A TOTAL PAYMENT OF $328,180.42 FROM UBS,FROM A TOTAL FINE OF $75MMPREVIOUSLY AGREED UPON WITH THE STATE OF MASSACHUSETTS ANDTHE NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION.


i


Initiated By: COMMONWEALTH OF VIRGINIA STATE CORPORATION COMMISSION


Other


CONSENT


Docket/Case Number:






Resolution:


Sanction Details: UBS HAS PAID THE SUM OF $1,662,029.43 TO THE STATE OF VIRGINIA.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,VIRGINIA WILL RECEIVE A TOTAL PAYMENT OF $1,662,029.43 FROM UBS,FROM A TOTAL FINE OF $75MM PREVIOUSLY AGREED UPON WITH THESTATE OF MASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION.


Consent






WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,VIRGINIA WILL RECEIVE A TOTAL PAYMENT OF $1,662,029.43 FROM UBS,FROM A TOTAL FINE OF $75MM PREVIOUSLY AGREED UPON WITH THESTATE OF MASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION.


i


Initiated By: SOUTH DAKOTA, DEPARTMENT OF REVENUE AND REGULATION, DIVISONOF SECURITIES


Other


CONSENT


Docket/Case Number:






Resolution:


Sanction Details: UBS HAS PAID THE SUM OF $317,375.71 TO THE STATE OF SOUTH DAKOTA.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,SOUTH DAKOTA WILL RECEIVE A TOTAL PAYMENT OF $317,375.71 FROMUBS, FROM A TOTAL FINE OF $75MM PREVIOUSLY AGREED UPON WITHTHE STATE OF MASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION.


Consent






WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,SOUTH DAKOTA WILL RECEIVE A TOTAL PAYMENT OF $317,375.71 FROMUBS, FROM A TOTAL FINE OF $75MM PREVIOUSLY AGREED UPON WITHTHE STATE OF MASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION.


i


Initiated By: NORTH DAKOTA SECURITIES DEPARTMENT


Other


CONSENT


Docket/Case Number:






Resolution:


Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $235,194.78 TO THESTATE OF NORTH DAKOTA.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,NORTH DAKOTA WILL RECEIVE A TOTAL PAYMENT OF $235,194.78 FROMUBS, FROM A TOTAL FINE OF $75MMPREVIOUSLY AGREED UPON WITH THE STATE OF MASSACHUSETTS ANDTHE NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION.


Consent






WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,NORTH DAKOTA WILL RECEIVE A TOTAL PAYMENT OF $235,194.78 FROMUBS, FROM A TOTAL FINE OF $75MMPREVIOUSLY AGREED UPON WITH THE STATE OF MASSACHUSETTS ANDTHE NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION.


i


Initiated By: COMMISSIONER OF SECURITIES AND INSURANCE MONTANA STATEAUDITOR


Other


CONSENT


Docket/Case Number:






Resolution:


Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $324,542.52 TO THE STATE OF MONTANA.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,MONTANA WILL RECEIVE A TOTAL PAYMENT OF $324,542.52 FROM UBS,FROM A TOTAL FINE OF $75MMPREVIOUSLY AGREED UPON WITH THE STATE OF MASSACHUSETTS ANDTHE NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION.


Consent







i


Initiated By: STATE OF LOUISIANA OFFICE OF FINANCIAL INSTITUTIONS


Other


CONSENT


Docket/Case Number:






Resolution:


Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $867,350.22 TOTHE STATE OF LOUISIANA.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,LOUISIANA WILL RECEIVE A TOTAL PAYMENT OF $867,350.22 FROM UBS,FROM A TOTAL FINE OF $75MMPREVIOUSLY AGREED UPON WITH THE STATE OF MASSACHUSETTS ANDTHE NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION.


Consent







i


Initiated By: COMMONWEALTH OF KENTUCKY, PUBLIC PROTECTION CABINET,DEPARTMENT OF FINANCIAL INSTITUTIONS


Other


CONSENT


Docket/Case Number:






Resolution:


Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $485,558.29 TO THE STATE OF KENTUCKY.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,KENTUCKY WILL RECEIVE A TOTAL PAYMENT OF $485,558.29 FROM UBS,FROM A TOTAL FINE OF $75MMPREVIOUSLY AGREED UPON WITH THE STATE OF MASSACHUSETTS ANDTHE NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION.


Consent







i









Allegations: NASDAQ RULES 2110, 3010 - UBS SECURITIES' SUPERVISORY SYSTEM ANDWRITTEN SUPERVISORY PROCEDURES WERE NOT REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIESLAWS AND REGULATIONS (INCLUDING NASD NOTICE TO MEMBERS 04-66)AND NASDAQ RULES CONCERNING THE PREVENTION OF ERRONEOUSORDERS AND TRANSACTIONS AND FRIVOLOUS CLEARLY ERRONEOUSTRANSACTION COMPLAINTS.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $10,000 AND REQUIRED TOREVISE ITS WRITTEN SUPERVISORY PROCEDURES REGARDINGCOMPLIANCE WITH NASD NOTICE TO MEMBERS 04-66 WITHIN 30BUSINESS DAYS OF ACCEPTANCE OF THIS AWC BY THE NASDAQ REVIEWCOUNCIL.


No







www.finra.org/brokercheck User GuidanceWITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $10,000 AND REQUIRED TOREVISE ITS WRITTEN SUPERVISORY PROCEDURES REGARDINGCOMPLIANCE WITH NASD NOTICE TO MEMBERS 04-66 WITHIN 30BUSINESS DAYS OF ACCEPTANCE OF THIS AWC BY THE NASDAQ REVIEWCOUNCIL.









Allegations: NASDAQ RULES 2110, 3010 - UBS SECURITIES' SUPERVISORY SYSTEM ANDWRITTEN SUPERVISORY PROCEDURES WERE NOT REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIESLAWS AND REGULATIONS (SPECIFICALLY NASD NOTICE TO MEMBERS 04-66) AND NASDAQ RULES CONCERNING THE PREVENTION OF ERRONEOUSORDERS AND TRANSACTIONS AND FRIVOLOUS CLEARLY ERRONEOUSTRANSACTION COMPLAINTS



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $10,000 AND REQUIRED TOREVISE ITS WRITTEN SUPERVISORY PROCEDURES REGARDINGCOMPLIANCE WITH NASD NOTICE TO MEMBERS 04-66 WITHIN 30BUSINESS DAYS OF ACCEPTANCE OF THIS AWC BY THE NASDAQ REVIEWCOUNCIL




i







Initiated By: STATE OF INDIANA, OFFICE OF THE STATE OF THE SECRETARY OF STATE,SECURITIES DIVISION


Other


CONSENT


Docket/Case Number:



Allegations: FAILURE TO SUPERVISE AND UNETHICAL BUSINESS PRACTICES RELATEDTO THE MARKETING AND SALE OF AUCTIONRATE SECURITIES



Resolution:


Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $705,000.11 TO THE STATE OF INDIANA.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,INDIANA WILL RECEIVE A TOTAL PAYMENT OF $705,000.11 FROM UBS,FROM A TOTAL FINE OF $75MM PREVIOUSLY AGREED UPON WITH THESTATE OF MASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION.


Consent


i







Initiated By: DEPARTMENT OF FINANCE OF THE STATE OF IDAHO


Other


CONSENT


Docket/Case Number:






Resolution:


Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.UBS HAS PAID THE SUM OF $389,031.88 TO THE STATE OF IDAHO.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008.ADDITIONALLY, IDAHO WILL RECEIVE A TOTAL PAYMENT OF $389,031.88FROM UBS, FROM A TOTAL FINE OF $75MM PREVIOUSLY AGREED UPONWITH THE STATE OF MASSACHUSETTS AND THE NORTH AMERICANSECURITIES ADMINISTRATORS ASSOCIATION.


Consent


i







Initiated By: COLORADO DIVISION OF SECURITIES


Other


CONSENT


Docket/Case Number:






Resolution:


Sanction Details: UBS HAS PAID THE SUM OF $2,166,411.03 TO THE STATE OF COLORADO.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,COLORADO WILL RECEIVE A TOTAL PAYMENT OF $2,166,411.03 FROM UBS,FROM A TOTAL FINE OF $75MM PREVIOUSLY AGREED UPON WITH THESTATE OF MASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION.


Consent


i








Initiated By: STATE OF CALIFORNIA COMMISSIONER OF CORPORATIONS


Other


CONSENT


Docket/Case Number:





Resolution:


Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.WITHIN TEN DAYS OF THE DATE OF THE ORDER, UBS HAS PAID THE SUMOF $15,209,146.78 TO THE STATE OF CALIFORNIA.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,CALIFORNIA WILL RECEIVE A TOTAL PAYMENT OF $15,209,146.78 FROMUBS, FROM A TOTAL FINE OF $75MM PREVIOUSLY AGREED UPON WITHTHE STATE OF MASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION.


Consent


i








Initiated By: ARIZONA CORPORATION COMMISSION


Other


CONSENT


Docket/Case Number:





Resolution:


Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE SECURITIES ACT.WITHIN TEN DAYS OF THE DATE OF THIS ORDER, UBS SHALL PAY THE SUMOF $1,363,942.61 TO THE STATE OF ARIZONA.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008. ADDITIONALLY,ARIZONA WILL RECEIVE A TOTAL PAYMENT OF $1,363,942.61 FROM UBS,FROM A TOTAL FINE OF $75MM PREVIOUSLY AGREED UPON WITH THESTATE OF MASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION.


Consent


i


Allegations: FINRA RULE 2010, NASD RULES 2110, 3010(A), 3010(B): THE FIRM ENABLEDITS CUSTOMERS TO LEND THEIR FULLY PAID SECURITIES TO THE FIRM ONA SOLICITED AND UNSOLICITED BASIS TO FACILITATE, AMONG OTHERTHINGS, SHORT SELLING BY OTHER CUSTOMERS OF THE FIRM, FURTHERCUSTOMERS WHO LENT SECURITIES RECEIVED MONTHLY INTERESTPAYMENTS, CALCULATED AS A PERCENTAGE OF THE MARKET VALUE OFTHE SECURITIES, AND SECURED BY A THIRD-PARTY LETTER OF CREDIT. INORDER FOR THE FIRM TO MAKE DELIVERY OF SHARES FOR SECURITIESIN DEMAND, THE SUPPLY DESK WITHIN THE FIRM'S SECURITIES LENDINGDEPARTMENT MOST TYPICALLY BORROWED THE SECURITIES FROMINTERNAL AND EXTERNAL SOURCES, BUT IF THESE SOURCES WEREEXHAUSTED, THEN THE SECURITIES LENDING STAFF SEARCHED THEFIRM'S DATABASE TO IDENTIFY CUSTOMERS THAT OWNED FULLY PAIDSHARES IN ORDER TO BORROW THE SECURITIES, THEREAFTER THESECURITIES LENDING STAFF WOULD DETERMINE THE INTEREST RATETHAT THE FIRM WAS WILLING TO PAY THE CUSTOMER TO BORROW THESECURITIES, ALTHOUGH THERE WAS NO OVERSIGHT AND NOSUPERVISORY APPROVAL REQUIRED FOR SETTING OR CHANGINGINTEREST RATES, AND SUBSEQUENTLY THE SECURITIES LENDING STAFFWOULD CONTACT THE CUSTOMER'S REGISTERED REPRESENTATIVE TOINQUIRE AS TO WHETHER THE CUSTOMER WAS INTERESTED IN LENDINGTHE SECURITY. THE SECURITIES LENDING STAFF DID NOT PROVIDESTANDARDIZED INFORMATION OR MATERIALS TO REGISTEREDREPRESENTATIVES ABOUT FULLY PAID LENDING OR CONTACTED ORPROVIDED ANY INFORMATION TO THE REGISTERED REPRESENTATIVE'SSUPERVISOR, BRANCH MANAGER, OR ANYONE ELSE AT THE BRANCHREGARDING THE REQUESTED LOAN SECURITIES, BUT THE SECURITIESLENDING STAFF SENT THE REGISTERED REPRESENTATIVE, WHO DID NOTRECEIVE TRAINING OR CONSISTENT INFORMATION ABOUT FULLY PAIDLENDING, A PROPOSED CUSTOMER SECURITIES LOAN AGREEMENT(CSLA) FOR FORWARDING TO AND SIGNATURE OF INTERESTEDCUSTOMER. THE FIRM DID NOT ADEQUATELY DISCLOSE CERTAINMATERIAL FACTS IN THE CSLA, THE CUSTOMER'S MONTHLY ACCOUNTSTATEMENT, OR THE CONFIRM, A ONE PAGE CONFIRMATION OF THEINITIAL LENDING TRANSACTION, TO CUSTOMERS CONCERNING THE LOANTRANSACTIONS THAT WERE NECESSARY IN ORDER TO MAKE THESTATEMENTS MADE, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICHTHEY WERE MADE, NOT MISLEADING. THE FIRM FAILED TO DISCLOSE ORINADEQUATELY DISCLOSE THAT THE SECURITY WAS HARD TO BORROWDUE TO SHORT SELLING AND WAS FREQUENTLY BEING BORROWED TOFACILITATE SHORT SELLING; THAT THE INTEREST RATES OFFERED ANDAGREED TO COULD BE REDUCED BY THE FIRM; THAT REGISTEREDREPRESENTATIVES RECEIVED COMMISSIONS FOR THE DURATION OF THELOAN; THAT WHILE SECURITIES WERE ON LOAN, DIVIDENDS WERE PAIDAS A "CASH-IN-LIEU" PAYMENT AND THEREFORE SUBJECT TO HIGHER TAXRATES; AND THAT SHARES ON LOAN COULD BE SOLD AT ANY TIME. THEFIRM FAILED TO ESTABLISH AND MAINTAIN A SYSTEM TO SUPERVISE THEACTIVITIES OF EACH REGISTERED REPRESENTATIVE, REGISTEREDPRINCIPAL, AND OTHER ASSOCIATED PERSON RELATED TO FULLY PAIDLENDING THAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCEWITH APPLICABLE SECURITIES LAWS AND REGULATIONS, AND WITH FINRAAND NASD RULES. THE FIRM DID NOT PROVIDE ANY TRAININGREGARDING FULLY PAID LENDING TO ITS REGISTERED PERSONS, THEFIRM FAILED TO SUPERVISE ITS REGISTERED REPRESENTATIVES WITHRESPECT TO THE FULLY PAID LENDING PROCESS OR THEIRCOMMUNICATIONS WITH CUSTOMERS ABOUT FULLY PAID LENDING, ANDTHE FIRM HAD NO SYSTEM OR PROCEDURES THAT NOTIFIED BRANCHMANAGERS THAT CUSTOMERS IN THEIR BRANCHES WERE PARTICIPATINGIN FULLY PAID LENDING. THE TRADITIONAL TOOLS THAT WERE ALREADYAVAILABLE TO BRANCH MANAGERS AND OTHER SUPERVISORS TOMONITOR CUSTOMER ACCOUNTS WERE SIGNIFICANTLY COMPROMISEDWHEN SHARES WERE LENT THROUGH FULLY PAID LENDING, BECAUSE ACUSTOMER'S ACCOUNT NO LONGER REFLECTED THE CUSTOMER'SPOSITION IN THE SECURITY WHEN THE SHARES WERE LENT THROUGHFULLY PAID LENDING, AND THE FIRM'S ABILITY TO SUPERVISE VALUES OFPOSITIONS, CONCENTRATION LEVELS, AND THE SUITABILITY OF ANYSUBSEQUENT SECURITIES RECOMMENDATIONS FOR THE CUSTOMERSWAS COMPROMISED. (CONT. COMMENT)







Allegations: FINRA RULE 2010, NASD RULES 2110, 3010(A), 3010(B): THE FIRM ENABLEDITS CUSTOMERS TO LEND THEIR FULLY PAID SECURITIES TO THE FIRM ONA SOLICITED AND UNSOLICITED BASIS TO FACILITATE, AMONG OTHERTHINGS, SHORT SELLING BY OTHER CUSTOMERS OF THE FIRM, FURTHERCUSTOMERS WHO LENT SECURITIES RECEIVED MONTHLY INTERESTPAYMENTS, CALCULATED AS A PERCENTAGE OF THE MARKET VALUE OFTHE SECURITIES, AND SECURED BY A THIRD-PARTY LETTER OF CREDIT. INORDER FOR THE FIRM TO MAKE DELIVERY OF SHARES FOR SECURITIESIN DEMAND, THE SUPPLY DESK WITHIN THE FIRM'S SECURITIES LENDINGDEPARTMENT MOST TYPICALLY BORROWED THE SECURITIES FROMINTERNAL AND EXTERNAL SOURCES, BUT IF THESE SOURCES WEREEXHAUSTED, THEN THE SECURITIES LENDING STAFF SEARCHED THEFIRM'S DATABASE TO IDENTIFY CUSTOMERS THAT OWNED FULLY PAIDSHARES IN ORDER TO BORROW THE SECURITIES, THEREAFTER THESECURITIES LENDING STAFF WOULD DETERMINE THE INTEREST RATETHAT THE FIRM WAS WILLING TO PAY THE CUSTOMER TO BORROW THESECURITIES, ALTHOUGH THERE WAS NO OVERSIGHT AND NOSUPERVISORY APPROVAL REQUIRED FOR SETTING OR CHANGINGINTEREST RATES, AND SUBSEQUENTLY THE SECURITIES LENDING STAFFWOULD CONTACT THE CUSTOMER'S REGISTERED REPRESENTATIVE TOINQUIRE AS TO WHETHER THE CUSTOMER WAS INTERESTED IN LENDINGTHE SECURITY. THE SECURITIES LENDING STAFF DID NOT PROVIDESTANDARDIZED INFORMATION OR MATERIALS TO REGISTEREDREPRESENTATIVES ABOUT FULLY PAID LENDING OR CONTACTED ORPROVIDED ANY INFORMATION TO THE REGISTERED REPRESENTATIVE'SSUPERVISOR, BRANCH MANAGER, OR ANYONE ELSE AT THE BRANCHREGARDING THE REQUESTED LOAN SECURITIES, BUT THE SECURITIESLENDING STAFF SENT THE REGISTERED REPRESENTATIVE, WHO DID NOTRECEIVE TRAINING OR CONSISTENT INFORMATION ABOUT FULLY PAIDLENDING, A PROPOSED CUSTOMER SECURITIES LOAN AGREEMENT(CSLA) FOR FORWARDING TO AND SIGNATURE OF INTERESTEDCUSTOMER. THE FIRM DID NOT ADEQUATELY DISCLOSE CERTAINMATERIAL FACTS IN THE CSLA, THE CUSTOMER'S MONTHLY ACCOUNTSTATEMENT, OR THE CONFIRM, A ONE PAGE CONFIRMATION OF THEINITIAL LENDING TRANSACTION, TO CUSTOMERS CONCERNING THE LOANTRANSACTIONS THAT WERE NECESSARY IN ORDER TO MAKE THESTATEMENTS MADE, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICHTHEY WERE MADE, NOT MISLEADING. THE FIRM FAILED TO DISCLOSE ORINADEQUATELY DISCLOSE THAT THE SECURITY WAS HARD TO BORROWDUE TO SHORT SELLING AND WAS FREQUENTLY BEING BORROWED TOFACILITATE SHORT SELLING; THAT THE INTEREST RATES OFFERED ANDAGREED TO COULD BE REDUCED BY THE FIRM; THAT REGISTEREDREPRESENTATIVES RECEIVED COMMISSIONS FOR THE DURATION OF THELOAN; THAT WHILE SECURITIES WERE ON LOAN, DIVIDENDS WERE PAIDAS A "CASH-IN-LIEU" PAYMENT AND THEREFORE SUBJECT TO HIGHER TAXRATES; AND THAT SHARES ON LOAN COULD BE SOLD AT ANY TIME. THEFIRM FAILED TO ESTABLISH AND MAINTAIN A SYSTEM TO SUPERVISE THEACTIVITIES OF EACH REGISTERED REPRESENTATIVE, REGISTEREDPRINCIPAL, AND OTHER ASSOCIATED PERSON RELATED TO FULLY PAIDLENDING THAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCEWITH APPLICABLE SECURITIES LAWS AND REGULATIONS, AND WITH FINRAAND NASD RULES. THE FIRM DID NOT PROVIDE ANY TRAININGREGARDING FULLY PAID LENDING TO ITS REGISTERED PERSONS, THEFIRM FAILED TO SUPERVISE ITS REGISTERED REPRESENTATIVES WITHRESPECT TO THE FULLY PAID LENDING PROCESS OR THEIRCOMMUNICATIONS WITH CUSTOMERS ABOUT FULLY PAID LENDING, ANDTHE FIRM HAD NO SYSTEM OR PROCEDURES THAT NOTIFIED BRANCHMANAGERS THAT CUSTOMERS IN THEIR BRANCHES WERE PARTICIPATINGIN FULLY PAID LENDING. THE TRADITIONAL TOOLS THAT WERE ALREADYAVAILABLE TO BRANCH MANAGERS AND OTHER SUPERVISORS TOMONITOR CUSTOMER ACCOUNTS WERE SIGNIFICANTLY COMPROMISEDWHEN SHARES WERE LENT THROUGH FULLY PAID LENDING, BECAUSE ACUSTOMER'S ACCOUNT NO LONGER REFLECTED THE CUSTOMER'SPOSITION IN THE SECURITY WHEN THE SHARES WERE LENT THROUGHFULLY PAID LENDING, AND THE FIRM'S ABILITY TO SUPERVISE VALUES OFPOSITIONS, CONCENTRATION LEVELS, AND THE SUITABILITY OF ANYSUBSEQUENT SECURITIES RECOMMENDATIONS FOR THE CUSTOMERSWAS COMPROMISED. (CONT. COMMENT)






Initiated By: FINRA


Other


N/A




Other Product Type(s): FULLY PAID SECURITIES LENDING

FINRA RULE 2010, NASD RULES 2110, 3010(A), 3010(B): THE FIRM ENABLEDITS CUSTOMERS TO LEND THEIR FULLY PAID SECURITIES TO THE FIRM ONA SOLICITED AND UNSOLICITED BASIS TO FACILITATE, AMONG OTHERTHINGS, SHORT SELLING BY OTHER CUSTOMERS OF THE FIRM, FURTHERCUSTOMERS WHO LENT SECURITIES RECEIVED MONTHLY INTERESTPAYMENTS, CALCULATED AS A PERCENTAGE OF THE MARKET VALUE OFTHE SECURITIES, AND SECURED BY A THIRD-PARTY LETTER OF CREDIT. INORDER FOR THE FIRM TO MAKE DELIVERY OF SHARES FOR SECURITIESIN DEMAND, THE SUPPLY DESK WITHIN THE FIRM'S SECURITIES LENDINGDEPARTMENT MOST TYPICALLY BORROWED THE SECURITIES FROMINTERNAL AND EXTERNAL SOURCES, BUT IF THESE SOURCES WEREEXHAUSTED, THEN THE SECURITIES LENDING STAFF SEARCHED THEFIRM'S DATABASE TO IDENTIFY CUSTOMERS THAT OWNED FULLY PAIDSHARES IN ORDER TO BORROW THE SECURITIES, THEREAFTER THESECURITIES LENDING STAFF WOULD DETERMINE THE INTEREST RATETHAT THE FIRM WAS WILLING TO PAY THE CUSTOMER TO BORROW THESECURITIES, ALTHOUGH THERE WAS NO OVERSIGHT AND NOSUPERVISORY APPROVAL REQUIRED FOR SETTING OR CHANGINGINTEREST RATES, AND SUBSEQUENTLY THE SECURITIES LENDING STAFFWOULD CONTACT THE CUSTOMER'S REGISTERED REPRESENTATIVE TOINQUIRE AS TO WHETHER THE CUSTOMER WAS INTERESTED IN LENDINGTHE SECURITY. THE SECURITIES LENDING STAFF DID NOT PROVIDESTANDARDIZED INFORMATION OR MATERIALS TO REGISTEREDREPRESENTATIVES ABOUT FULLY PAID LENDING OR CONTACTED ORPROVIDED ANY INFORMATION TO THE REGISTERED REPRESENTATIVE'SSUPERVISOR, BRANCH MANAGER, OR ANYONE ELSE AT THE BRANCHREGARDING THE REQUESTED LOAN SECURITIES, BUT THE SECURITIESLENDING STAFF SENT THE REGISTERED REPRESENTATIVE, WHO DID NOTRECEIVE TRAINING OR CONSISTENT INFORMATION ABOUT FULLY PAIDLENDING, A PROPOSED CUSTOMER SECURITIES LOAN AGREEMENT(CSLA) FOR FORWARDING TO AND SIGNATURE OF INTERESTEDCUSTOMER. THE FIRM DID NOT ADEQUATELY DISCLOSE CERTAINMATERIAL FACTS IN THE CSLA, THE CUSTOMER'S MONTHLY ACCOUNTSTATEMENT, OR THE CONFIRM, A ONE PAGE CONFIRMATION OF THEINITIAL LENDING TRANSACTION, TO CUSTOMERS CONCERNING THE LOANTRANSACTIONS THAT WERE NECESSARY IN ORDER TO MAKE THESTATEMENTS MADE, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICHTHEY WERE MADE, NOT MISLEADING. THE FIRM FAILED TO DISCLOSE ORINADEQUATELY DISCLOSE THAT THE SECURITY WAS HARD TO BORROWDUE TO SHORT SELLING AND WAS FREQUENTLY BEING BORROWED TOFACILITATE SHORT SELLING; THAT THE INTEREST RATES OFFERED ANDAGREED TO COULD BE REDUCED BY THE FIRM; THAT REGISTEREDREPRESENTATIVES RECEIVED COMMISSIONS FOR THE DURATION OF THELOAN; THAT WHILE SECURITIES WERE ON LOAN, DIVIDENDS WERE PAIDAS A "CASH-IN-LIEU" PAYMENT AND THEREFORE SUBJECT TO HIGHER TAXRATES; AND THAT SHARES ON LOAN COULD BE SOLD AT ANY TIME. THEFIRM FAILED TO ESTABLISH AND MAINTAIN A SYSTEM TO SUPERVISE THEACTIVITIES OF EACH REGISTERED REPRESENTATIVE, REGISTEREDPRINCIPAL, AND OTHER ASSOCIATED PERSON RELATED TO FULLY PAIDLENDING THAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCEWITH APPLICABLE SECURITIES LAWS AND REGULATIONS, AND WITH FINRAAND NASD RULES. THE FIRM DID NOT PROVIDE ANY TRAININGREGARDING FULLY PAID LENDING TO ITS REGISTERED PERSONS, THEFIRM FAILED TO SUPERVISE ITS REGISTERED REPRESENTATIVES WITHRESPECT TO THE FULLY PAID LENDING PROCESS OR THEIRCOMMUNICATIONS WITH CUSTOMERS ABOUT FULLY PAID LENDING, ANDTHE FIRM HAD NO SYSTEM OR PROCEDURES THAT NOTIFIED BRANCHMANAGERS THAT CUSTOMERS IN THEIR BRANCHES WERE PARTICIPATINGIN FULLY PAID LENDING. THE TRADITIONAL TOOLS THAT WERE ALREADYAVAILABLE TO BRANCH MANAGERS AND OTHER SUPERVISORS TOMONITOR CUSTOMER ACCOUNTS WERE SIGNIFICANTLY COMPROMISEDWHEN SHARES WERE LENT THROUGH FULLY PAID LENDING, BECAUSE ACUSTOMER'S ACCOUNT NO LONGER REFLECTED THE CUSTOMER'SPOSITION IN THE SECURITY WHEN THE SHARES WERE LENT THROUGHFULLY PAID LENDING, AND THE FIRM'S ABILITY TO SUPERVISE VALUES OFPOSITIONS, CONCENTRATION LEVELS, AND THE SUITABILITY OF ANYSUBSEQUENT SECURITIES RECOMMENDATIONS FOR THE CUSTOMERSWAS COMPROMISED. (CONT. COMMENT)


Resolution:


No









Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS,THEREFORE THE FIRM IS CENSURED, FINED $175,000, AND ANUNDERTAKING THAT, PRIOR TO SOLICITING OR FACILITATING ANY NEWFULLY PAID LOANS FROM CUSTOMERS, THE FIRM SHALL ESTABLISH ANDMAINTAIN A SYSTEM, INCLUDING WRITTEN PROCEDURES, TO SUPERVISETHE ACTIVITIES OF EACH REGISTERED REPRESENTATIVE, REGISTEREDPRINCIPAL, AND OTHER ASSOCIATED PERSON RELATING TO FULLY PAIDLENDING OR SIMILAR PROGRAM THAT IS REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH APPLICABLE SECURITIES LAWS ANDREGULATIONS, AND WITH FINRA AND NASD RULES. FURTHERMORE,PRIOR TO SOLICITING OR FACILITATING ANY NEW FULLY PAID LOANSFROM CUSTOMERS, AN OFFICER OF THE FIRM SHALL CERTIFY THAT THEFIRM'S SYSTEM AND WRITTEN PROCEDURES RELATING TO FULLY PAIDLENDING ARE IN COMPLIANCE WITH NASD RULE 3010(A) AND (B).

Regulator Statement THE FIRM FAILED TO ESTABLISH, MAINTAIN, AND ENFORCE WRITTENPROCEDURES THAT WERE REASONABLY DESIGNED TO SUPERVISE FULLYPAID LENDING AND THESE PROCEDURES WERE NOT ACCESSIBLE TO THEFIRM'S REGISTERED REPRESENTATIVES AND BRANCH MANAGERS, ANDTHERE WERE NO PROCEDURES AT THE BRANCH LEVEL REGARDINGFULLY PAID LENDING.



Allegations: FINRA HAS MADE A DETERMINATION THAT, DURING JANUARY 1, 2006THROUGH JUNE 30, 2009, UBS FAILED TO DISCLOSE MATERIAL FACTS TOCUSTOMERS CONCERNING FULLY PAID LENDING THAT WERE NECESSARYIN ORDER TO MAKE THE STATEMENTS MADE IN LIGHT OF THECIRCUMSTANCES UNDER WHICH THEY WERE MADE NOT MISLEADING INVIOLATION OF NASD CONDUCT RULE 2110 AND FINRA RULE 2010. UBSFAILED TO ESTABLISH, MAINTAIN AND ENFORCE WRITTEN PROCEDURESTO SUPERVISE THE FULLY PAID LENDING PROCESS, MEMBERS OF THESECURITIES LENDING DEPARTMENT AND THE ACTIVITIES OF FINANCIALADVISORS IN VIOLATION OF NASD CONDUCT RULE 3010(B). UBS FAILEDTO ESTABLISH AND MAINTAIN A SYSTEM TO SUPERVISE THE ACTIVITIESOF THE STAFF OF THE SECURITIES LENDINGDEPARTMENT AND THE FIRM'S FINANCIAL ADVISORS RELATING TO FULLYPAID LENDING, THAT WAS REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONS INVIOLATION OF NASD CONDUCT RULE 3010 (A).







Initiated By: FINRA


Censure


FINE OF $175,000 AND AN UNDERTAKING




Other Product Type(s): FULLY PAID SECURITIES LENDING

FINRA HAS MADE A DETERMINATION THAT, DURING JANUARY 1, 2006THROUGH JUNE 30, 2009, UBS FAILED TO DISCLOSE MATERIAL FACTS TOCUSTOMERS CONCERNING FULLY PAID LENDING THAT WERE NECESSARYIN ORDER TO MAKE THE STATEMENTS MADE IN LIGHT OF THECIRCUMSTANCES UNDER WHICH THEY WERE MADE NOT MISLEADING INVIOLATION OF NASD CONDUCT RULE 2110 AND FINRA RULE 2010. UBSFAILED TO ESTABLISH, MAINTAIN AND ENFORCE WRITTEN PROCEDURESTO SUPERVISE THE FULLY PAID LENDING PROCESS, MEMBERS OF THESECURITIES LENDING DEPARTMENT AND THE ACTIVITIES OF FINANCIALADVISORS IN VIOLATION OF NASD CONDUCT RULE 3010(B). UBS FAILEDTO ESTABLISH AND MAINTAIN A SYSTEM TO SUPERVISE THE ACTIVITIESOF THE STAFF OF THE SECURITIES LENDINGDEPARTMENT AND THE FIRM'S FINANCIAL ADVISORS RELATING TO FULLYPAID LENDING, THAT WAS REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONS INVIOLATION OF NASD CONDUCT RULE 3010 (A).


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS,THEREFORE THE FIRM IS CENSURED, FINED $175,000, AND AGREES TO ANUNDERTAKING THAT, PRIOR TO SOLICITING OR FACILITATING ANY NEWFULLY PAID LOANS FROM CUSTOMERS, THE FIRM SHALL ESTABLISH ANDMAINTAIN A SYSTEM, INCLUDING WRITTEN PROCEDURES, TO SUPERVISETHE ACTIVITIES OF EACH REGISTERED REPRESENTATIVE, REGISTEREDPRINCIPAL, AND OTHER ASSOCIATED PERSON RELATING TO FULLY PAIDLENDING ORSIMILAR PROGRAM THAT IS REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONS,AND WITH FINRA AND NASD RULES. FURTHERMORE, PRIOR TOSOLICITING OR FACILITATING ANY NEW FULLY PAID LOANS FROMCUSTOMERS, AN OFFICER OF THE FIRM SHALL CERTIFY THAT THE FIRM'SSYSTEM AND WRITTEN PROCEDURES RELATING TO FULLY PAID LENDINGARE IN COMPLIANCE WITH NASD RULE 3010(A) AND (B).




i


Allegations: THE MISSOURI SECURITIES DIVISION ALLEGES FAILURE TO SUPERVISEAND ENGAGEMENT IN DISHONEST AND UNETHICAL PRACTICES.








Initiated By: MISSOURI SECURITIES DIVISION


Other


CONSENT


Docket/Case Number: AP-10-14




Allegations: THE MISSOURI SECURITIES DIVISION ALLEGES FAILURE TO SUPERVISEAND ENGAGEMENT IN DISHONEST AND UNETHICAL PRACTICES.


Resolution:


Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE MISSOURISECURITIES ACT OF 2003 AND WILL COMPLY WITH THE MISSOURISECURITIES ACT OF 2003. WITHIN TEN DAYS OF THE DATE OF THISORDER, UBS SHALL PAY THE SUM OF $1,272,039.07 TO THE STATE OFMISSOURI.


No


Consent


Initiated By: MISSOURI SECURITIES DIVISION










Other


CONSENT


Docket/Case Number: AP-10-14




Resolution:


Sanction Details: UBS SHALL CEASE AND DESIST FROM VIOLATING THE MISSOURISECURITIES ACT OF 2003 AND WILL COMPLY WITH THE MISSOURISECURITIES ACT OF 2003. WITHIN TEN DAYS OF THE DATE OF THISORDER, UBS SHALL PAY THE SUM OF $1,272,039.07 TO THE STATE OFMISSOURI.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY AND ALSO CONFIRMEDTHEIR OBLIGATIONS UNDER THE ARS RIGHTS OFFERING AS PART OFREGULATORY SETTLEMENTS ENTERED INTO IN 2008.ADDITIONALLY, MISSOURI WILL RECEIVE A TOTAL PAYMENT OF$1,272,039.07 FROM UBS, FROM A TOTAL FINE OF $75MM PREVIOUSLYAGREED UPON WITH THE STATE OF MASSACHUSETTS AND THE NORTHAMERICAN SECURITIES ADMINISTRATORS ASSOCIATION.


Consent


i


Allegations: CFTC RELEASE 5316-10, APRIL 29, 2010: THE COMMODITY FUTURESTRADING COMMISSION ("COMMISSION") HAS REASON TO BELIEVE THATUBS SECURITIES LLC ("UBS" OR "RESPONDENT") HAS AIDED AND ABETTEDITS CUSTOMER'S VIOLATION OF SECTION 9(A)(4) OF THE COMMODITYEXCHANGE ACT ("ACT"), AS AMENDED, 7 USC SECTION 13(A)(4), AND THATPURSUANT TO SECTION 13(A) OF THE CEA, UBS SECURITIES IS LIABLEFOR THAT VIOLATION. THEREFORE, THE COMMISSION DEEMS ITAPPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLICADMINISTRATIVE PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED TODETERMINE WHETHER RESPONDENT AIDED AND ABETTED THE VIOLATIONSET FORTH HEREIN, AND TO DETERMINE WHETHER ANY ORDER SHOULDBE ISSUED IMPOSING REMEDIAL SANCTIONS. ON FEBRUARY 6, 2009, AUBS EMPLOYEE BROKER AIDED AND ABETTED THE UBS CUSTOMER'SCONCEALMENT OF MATERIAL FACTS FROM THE NEW YORK MERCANTILEEXCHANGE (NYMEX) IN VIOLATION OF 9(A)(4) OF THE ACT 7 USC SECTION13(A)(4) (2006). PURSUANT TO NYMEX RULES, A BLOCK TRADE MUST BEREPORTED TO NYMEX "WITHIN FIVE MINUTES OF THE TIME OFEXECUTION" CONSISTENT WITH THE REQUIREMENTS OF NYMEX RULE6.21C(A)(6). ALTHOUGH THE BLOCK TRADE IN QUESTION WAS EXECUTEDEARLIER IN THE DAY, THE UBS EMPLOYEE BROKER AIDED AND ABETTEDITS CUSTOMER'S CONCEALMENT OF FACTS WHEN, IN RESPONSE TO THECUSTOMER'S REQUEST TO DELAY REPORTING THE TRADE UNTIL AFTERTHE CLOSE OF TRADING, THE UBS EMPLOYEE DID NOT REPORT THETRADE UNTIL AFTER THE CLOSE. BECAUSE THE EMPLOYEE BROKERUNDERTOOK HIS ACTIONS WITHIN THE SCOPE OF HIS EMPLOYMENT,PURSUANT TO SECTION 2(A)(1)(B) OF THE ACT, 7 USC SECTION 2(A)(1)(B)(2006), AND COMMISSION REGULATION 1.2, 17 CFR SECTION 1.2 (2009),UBS IS LIABLE FOR THE EMPLOYEE BROKER'S AIDING AND ABETTING OFITS CUSTOMER'S VIOLATION OF SECTION 9(A)(4) OF THE ACT.







Initiated By: COMMODITY FUTURES TRADING COMMISSION







CFTC RELEASE 5316-10, APRIL 29, 2010: THE COMMODITY FUTURESTRADING COMMISSION ("COMMISSION") HAS REASON TO BELIEVE THATUBS SECURITIES LLC ("UBS" OR "RESPONDENT") HAS AIDED AND ABETTEDITS CUSTOMER'S VIOLATION OF SECTION 9(A)(4) OF THE COMMODITYEXCHANGE ACT ("ACT"), AS AMENDED, 7 USC SECTION 13(A)(4), AND THATPURSUANT TO SECTION 13(A) OF THE CEA, UBS SECURITIES IS LIABLEFOR THAT VIOLATION. THEREFORE, THE COMMISSION DEEMS ITAPPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLICADMINISTRATIVE PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED TODETERMINE WHETHER RESPONDENT AIDED AND ABETTED THE VIOLATIONSET FORTH HEREIN, AND TO DETERMINE WHETHER ANY ORDER SHOULDBE ISSUED IMPOSING REMEDIAL SANCTIONS. ON FEBRUARY 6, 2009, AUBS EMPLOYEE BROKER AIDED AND ABETTED THE UBS CUSTOMER'SCONCEALMENT OF MATERIAL FACTS FROM THE NEW YORK MERCANTILEEXCHANGE (NYMEX) IN VIOLATION OF 9(A)(4) OF THE ACT 7 USC SECTION13(A)(4) (2006). PURSUANT TO NYMEX RULES, A BLOCK TRADE MUST BEREPORTED TO NYMEX "WITHIN FIVE MINUTES OF THE TIME OFEXECUTION" CONSISTENT WITH THE REQUIREMENTS OF NYMEX RULE6.21C(A)(6). ALTHOUGH THE BLOCK TRADE IN QUESTION WAS EXECUTEDEARLIER IN THE DAY, THE UBS EMPLOYEE BROKER AIDED AND ABETTEDITS CUSTOMER'S CONCEALMENT OF FACTS WHEN, IN RESPONSE TO THECUSTOMER'S REQUEST TO DELAY REPORTING THE TRADE UNTIL AFTERTHE CLOSE OF TRADING, THE UBS EMPLOYEE DID NOT REPORT THETRADE UNTIL AFTER THE CLOSE. BECAUSE THE EMPLOYEE BROKERUNDERTOOK HIS ACTIONS WITHIN THE SCOPE OF HIS EMPLOYMENT,PURSUANT TO SECTION 2(A)(1)(B) OF THE ACT, 7 USC SECTION 2(A)(1)(B)(2006), AND COMMISSION REGULATION 1.2, 17 CFR SECTION 1.2 (2009),UBS IS LIABLE FOR THE EMPLOYEE BROKER'S AIDING AND ABETTING OFITS CUSTOMER'S VIOLATION OF SECTION 9(A)(4) OF THE ACT.


Resolution:


No

Order






Other Sanctions Ordered: UNDERTAKINGS

Sanction Details: RESPONDENT HAS SUBMITTED AN OFFER OF SETTLEMENT, WHICH THECOMMISSION HAS DETERMINED TO ACCEPT. WITHOUT ADMITTING ORDENYING THE FINDINGS OF FACT HEREIN, RESPONDENT ACKNOWLEDGESSERVICE OF THIS ORDER INSTITUTING PROCEEDINGS PURSUANT TOSECTIONS 6(C) AND 6(D) OF THE COMMODITY EXCHANGE ACT, ASAMENDED, MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS.BASED ON THE FOREGOING, THE COMMISSION FINDS THAT THE UBS ISLIABLE FOR ITS EMPLOYEE'S ACTS IN AIDING AND ABETTING ITSCUSTOMER'S VIOLATION OF SECTION 9(A)(4) OF THE ACT, 7 USC SECTION13(A)(4) (2006) AND IS THEREFORE LIABLE FOR VIOLATING SECTION 9(A)(4)OF THE ACT. ACCORDINGLY, IT IS HEREBY ORDERED THAT RESPONDENTSHALL CEASE AND DESIST FROM VIOLATING SECTION 9(A)(4) OF THE ACT,7 USC SECTION 13(A)(4) (2006). RESPONDENT SHALL PAY A CIVIL PENALTYOF $200,000, PLUS POST-JUDGMENT INTEREST. RESPONDENT SHALLCOMPLY WITH THE UNDERTAKINGS.

Regulator Statement UNDERTAKINGS: NEITHER UBS NOR ANY AGENT OR EMPLOYEE UNDERRESPONDENT'S CONTROL OR AUTHORITY SHALL TAKE ANY ACTION ORMAKE ANY PUBLIC STATEMENT DENYING, DIRECTLY OR INDIRECTLY, ANYFINDINGS OR CONCLUSIONS IN THIS ORDER, OR CREATING OR TENDINGTO CREATE, THE IMPRESSION THAT THIS ORDER IS WITHOUT FACTUALBASIS; PROVIDED THAT NOTHING IN THIS PROVISION SHALL AFFECTRESPONDENT'S TESTIMONIAL OBLIGATIONS OR RIGHT TO TAKE LEGALPOSITIONS IN OTHER PROCEEDINGS TO WHICH THE COMMISSION IS NOTA PARTY. RESPONDENT SHALL UNDERTAKE ALL STEPS NECESSARY TOENSURE THAT ALL AGENTS AND EMPLOYEES UNDER RESPONDENT'SCONTROL AND AUTHORITY UNDERSTAND AND COMPLY WITH THISUNDERTAKINGS. UBS SHALL CONTINUE TO COOPERATE FULLY ANDEXPEDITIOUSLY WITH THE COMMISSION IN THIS PROCEEDING AND IN ANYCIVIL OR CRIMINAL INVESTIGATION, LITIGATION OR ADMINISTRATIVEMATTER RELATED TO THE SUBJECT MATTER OF THIS PROCEEDING. ASPART OF SUCH COOPERATION WITH THE COMMISSION, UBS AGREES TO:PRESERVE ALL RECORDS THAT HAVE BEEN PREVIOUSLY IDENTIFIED BYUBS TO THE COMMISSION AS RELEVANT TO THE SUBJECT MATTER OFTHIS PROCEEDING (INCLUDING RECORDS, COPIES OF WHICH HAVE BEENPREVIOUSLY PROVIDED TO THE COMMISSION IN CONNECTION WITH THEINVESTIGATION THAT LED TO THIS PROCEEDING), INCLUDING BUT NOTLIMITED TO EMAILS AND TRADING RECORDS, FOR A PERIOD OF FIVEYEARS FROM THE DATE OF THIS ORDER; COMPLY FULLY, PROMPTLY,COMPLETELY AND TRUTHFULLY WITH ANY INQUIRIES OR REQUESTS FORINFORMATION OR DOCUMENTS; PROVIDE AUTHENTICATION OFDOCUMENTS AND OTHER EVIDENTIARY MATERIAL; PRODUCE ANYCURRENT (AS OF THE TIME OF THE REQUEST) OFFICER, DIRECTOR,EMPLOYEE OR AGENT OF UBS, REGARDLESS OF THE INDIVIDUAL'SLOCATION AND AT SUCH LOCATION THAT MINIMIZES COMMISSION TRAVELEXPENDITURES, TO PROVIDE ASSISTANCE AT ANY TRIAL, PROCEEDING,INCLUDING BUT NOT LIMITED TO, REQUESTS FOR TESTIMONY,DEPOSITIONS AND/OR INTERVIEWS, AND TO ENCOURAGE THEM TOTESTIFY COMPLETELY AND TRUTHFULLY IN ANY SUCH PROCEEDING,TRIAL OR INVESTIGATION; AND LAWFULLY ASSIST IN LOCATING ANDCONTACTING ANY PRIOR (AT THE TIME OF THE REQUEST) OFFICER,DIRECTOR, EMPLOYEE OR AGENT OF UBS.


No







UNDERTAKINGS: NEITHER UBS NOR ANY AGENT OR EMPLOYEE UNDERRESPONDENT'S CONTROL OR AUTHORITY SHALL TAKE ANY ACTION ORMAKE ANY PUBLIC STATEMENT DENYING, DIRECTLY OR INDIRECTLY, ANYFINDINGS OR CONCLUSIONS IN THIS ORDER, OR CREATING OR TENDINGTO CREATE, THE IMPRESSION THAT THIS ORDER IS WITHOUT FACTUALBASIS; PROVIDED THAT NOTHING IN THIS PROVISION SHALL AFFECTRESPONDENT'S TESTIMONIAL OBLIGATIONS OR RIGHT TO TAKE LEGALPOSITIONS IN OTHER PROCEEDINGS TO WHICH THE COMMISSION IS NOTA PARTY. RESPONDENT SHALL UNDERTAKE ALL STEPS NECESSARY TOENSURE THAT ALL AGENTS AND EMPLOYEES UNDER RESPONDENT'SCONTROL AND AUTHORITY UNDERSTAND AND COMPLY WITH THISUNDERTAKINGS. UBS SHALL CONTINUE TO COOPERATE FULLY ANDEXPEDITIOUSLY WITH THE COMMISSION IN THIS PROCEEDING AND IN ANYCIVIL OR CRIMINAL INVESTIGATION, LITIGATION OR ADMINISTRATIVEMATTER RELATED TO THE SUBJECT MATTER OF THIS PROCEEDING. ASPART OF SUCH COOPERATION WITH THE COMMISSION, UBS AGREES TO:PRESERVE ALL RECORDS THAT HAVE BEEN PREVIOUSLY IDENTIFIED BYUBS TO THE COMMISSION AS RELEVANT TO THE SUBJECT MATTER OFTHIS PROCEEDING (INCLUDING RECORDS, COPIES OF WHICH HAVE BEENPREVIOUSLY PROVIDED TO THE COMMISSION IN CONNECTION WITH THEINVESTIGATION THAT LED TO THIS PROCEEDING), INCLUDING BUT NOTLIMITED TO EMAILS AND TRADING RECORDS, FOR A PERIOD OF FIVEYEARS FROM THE DATE OF THIS ORDER; COMPLY FULLY, PROMPTLY,COMPLETELY AND TRUTHFULLY WITH ANY INQUIRIES OR REQUESTS FORINFORMATION OR DOCUMENTS; PROVIDE AUTHENTICATION OFDOCUMENTS AND OTHER EVIDENTIARY MATERIAL; PRODUCE ANYCURRENT (AS OF THE TIME OF THE REQUEST) OFFICER, DIRECTOR,EMPLOYEE OR AGENT OF UBS, REGARDLESS OF THE INDIVIDUAL'SLOCATION AND AT SUCH LOCATION THAT MINIMIZES COMMISSION TRAVELEXPENDITURES, TO PROVIDE ASSISTANCE AT ANY TRIAL, PROCEEDING,INCLUDING BUT NOT LIMITED TO, REQUESTS FOR TESTIMONY,DEPOSITIONS AND/OR INTERVIEWS, AND TO ENCOURAGE THEM TOTESTIFY COMPLETELY AND TRUTHFULLY IN ANY SUCH PROCEEDING,TRIAL OR INVESTIGATION; AND LAWFULLY ASSIST IN LOCATING ANDCONTACTING ANY PRIOR (AT THE TIME OF THE REQUEST) OFFICER,DIRECTOR, EMPLOYEE OR AGENT OF UBS.


Allegations: CFTC RELEASE 5316-10, APRIL 29, 2010: THE COMMODITY FUTURESTRADING COMMISSION ("COMMISSION") HAS REASON TO BELIEVE THATUBS SECURITIES LLC ("UBS" OR "RESPONDENT") HAS AIDED AND ABETTEDITS CUSTOMER'S VIOLATION OF SECTION 9(A)(4) OF THE COMMODITYEXCHANGE ACT ("ACT"), AS AMENDED, 7 USC SECTION 13(A)(4), AND THATPURSUANT TO SECTION 13(A) OF THE CEA, UBS SECURITIES IS LIABLEFOR THAT VIOLATION. THEREFORE, THE COMMISSION DEEMS ITAPPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLICADMINISTRATIVE PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED TODETERMINE WHETHER RESPONDENT AIDED AND ABETTED THE VIOLATIONSET FORTH HEREIN, AND TO DETERMINE WHETHER ANY ORDER SHOULDBE ISSUED IMPOSING REMEDIAL SANCTIONS. ON FEBRUARY 6, 2009, AUBS EMPLOYEE BROKER AIDED AND ABETTED THE UBS CUSTOMER'SCONCEALMENT OF MATERIAL FACTS FROM THE NEW YORK MERCANTILEEXCHANGE (NYMEX) IN VIOLATION OF 9(A)(4) OF THE ACT 7 USC SECTION13(A)(4) (2006). PURSUANT TO NYMEX RULES, A BLOCK TRADE MUST BEREPORTED TO NYMEX "WITHIN FIVE MINUTES OF THE TIME OFEXECUTION" CONSISTENT WITH THE REQUIREMENTS OF NYMEX RULE6.21C(A)(6). ALTHOUGH THE BLOCK TRADE IN QUESTION WAS EXECUTEDEARLIER IN THE DAY, THE UBS EMPLOYEE BROKER AIDED AND ABETTEDITS CUSTOMER'S CONCEALMENT OF FACTS WHEN, IN RESPONSE TO THECUSTOMER'S REQUEST TO DELAY REPORTING THE TRADE UNTIL AFTERTHE CLOSE OF TRADING, THE UBS EMPLOYEE DID NOT REPORT THETRADE UNTIL AFTER THE CLOSE. BECAUSE THE EMPLOYEE BROKERUNDERTOOK HIS ACTIONS WITHIN THE SCOPE OF HIS EMPLOYMENT,PURSUANT TO SECTION 2(A)(1)(B) OF THE ACT, 7 USC SECTION 2(A)(1)(B)(2006), AND COMMISSION REGULATION 1.2, 17 CFR SECTION 1.2 (2009),UBS IS LIABLE FOR THE EMPLOYEE BROKER'S AIDING AND ABETTING OFITS CUSTOMER'S VIOLATION OF SECTION 9(A)(4) OF THE ACT.







Initiated By: COMMODITY FUTURES TRADING COMMISSION


Cease and Desist


CIVIL MONETARY PENALTY





CFTC RELEASE 5316-10, APRIL 29, 2010: THE COMMODITY FUTURESTRADING COMMISSION ("COMMISSION") HAS REASON TO BELIEVE THATUBS SECURITIES LLC ("UBS" OR "RESPONDENT") HAS AIDED AND ABETTEDITS CUSTOMER'S VIOLATION OF SECTION 9(A)(4) OF THE COMMODITYEXCHANGE ACT ("ACT"), AS AMENDED, 7 USC SECTION 13(A)(4), AND THATPURSUANT TO SECTION 13(A) OF THE CEA, UBS SECURITIES IS LIABLEFOR THAT VIOLATION. THEREFORE, THE COMMISSION DEEMS ITAPPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLICADMINISTRATIVE PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED TODETERMINE WHETHER RESPONDENT AIDED AND ABETTED THE VIOLATIONSET FORTH HEREIN, AND TO DETERMINE WHETHER ANY ORDER SHOULDBE ISSUED IMPOSING REMEDIAL SANCTIONS. ON FEBRUARY 6, 2009, AUBS EMPLOYEE BROKER AIDED AND ABETTED THE UBS CUSTOMER'SCONCEALMENT OF MATERIAL FACTS FROM THE NEW YORK MERCANTILEEXCHANGE (NYMEX) IN VIOLATION OF 9(A)(4) OF THE ACT 7 USC SECTION13(A)(4) (2006). PURSUANT TO NYMEX RULES, A BLOCK TRADE MUST BEREPORTED TO NYMEX "WITHIN FIVE MINUTES OF THE TIME OFEXECUTION" CONSISTENT WITH THE REQUIREMENTS OF NYMEX RULE6.21C(A)(6). ALTHOUGH THE BLOCK TRADE IN QUESTION WAS EXECUTEDEARLIER IN THE DAY, THE UBS EMPLOYEE BROKER AIDED AND ABETTEDITS CUSTOMER'S CONCEALMENT OF FACTS WHEN, IN RESPONSE TO THECUSTOMER'S REQUEST TO DELAY REPORTING THE TRADE UNTIL AFTERTHE CLOSE OF TRADING, THE UBS EMPLOYEE DID NOT REPORT THETRADE UNTIL AFTER THE CLOSE. BECAUSE THE EMPLOYEE BROKERUNDERTOOK HIS ACTIONS WITHIN THE SCOPE OF HIS EMPLOYMENT,PURSUANT TO SECTION 2(A)(1)(B) OF THE ACT, 7 USC SECTION 2(A)(1)(B)(2006), AND COMMISSION REGULATION 1.2, 17 CFR SECTION 1.2 (2009),UBS IS LIABLE FOR THE EMPLOYEE BROKER'S AIDING AND ABETTING OFITS CUSTOMER'S VIOLATION OF SECTION 9(A)(4) OF THE ACT.


Resolution:

Other Sanctions Ordered: UNDERTAKINGS

Sanction Details: RESPONDENT HAS SUBMITTED AN OFFER OF SETTLEMENT, WHICH THECOMMISSION HAS DETERMINED TO ACCEPT. WITHOUT ADMITTING ORDENYING THE FINDINGS OF FACT HEREIN, RESPONDENT ACKNOWLEDGESSERVICE OF THIS ORDER INSTITUTING PROCEEDINGS PURSUANT TOSECTIONS 6(C) AND 6(D) OF THE COMMODITY EXCHANGE ACT, ASAMENDED, MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS.BASED ON THE FOREGOING, THE COMMISSION FINDS THAT THE UBS ISLIABLE FOR ITS EMPLOYEE'S ACTS IN AIDING AND ABETTING ITSCUSTOMER'S VIOLATION OF SECTION 9(A)(4) OF THE ACT, 7 USC SECTION13(A)(4) (2006) AND IS THEREFORE LIABLE FOR VIOLATING SECTION 9(A)(4)OF THE ACT. ACCORDINGLY, IT IS HEREBY ORDERED THAT RESPONDENTSHALL CEASE AND DESIST FROM VIOLATING SECTION 9(A)(4) OF THE ACT,7 USC SECTION 13(A)(4) (2006). RESPONDENT SHALL PAY A CIVIL PENALTYOF $200,000, PLUS POST-JUDGMENT INTEREST. RESPONDENT SHALLCOMPLY WITH THE UNDERTAKINGS.


Order


i







Initiated By: TEXAS


Cease and Desist


ADMINISTRATIVE FINE


Docket/Case Number: IC10-CDO-07




Allegations: UBS SECURITIES LLC THROUGH ITS SALESPEOPLE, ADVISED CERTAINCLIENTS THAT AUCTION RATE SECURITIES WERE SAFE, LIQUIDINVESTMENTS, WHEN IN FACT AUCTION RATE SECURITIES HADSIGNIFICANT LIQUIDITY RISKS ASSOCIATED WITH THEM. UBS SECURITIESLLC DID NOT ADEQUATELY TRAIN ALL OF ITS BROKERS AND FINANCIALADVISERS REGARDING THE POTENTIAL LIQUIDITY OF AUCTION RATESECURITIES, INCLUDING THE FACT UBS SECURITIES LLC, INCORPORATEDMAY STOP SUPPORTING THE MARKET.



Resolution:

Other Sanctions Ordered: CEASE AND DESIST

Sanction Details: NO OTHER SANCTIONS FOLLOW.


No


Order


Allegations: THE NOTICE OF HEARING ALLEGES MISREPRESENTATION, OMISSION,FRAUD, CONFLICT OF INTEREST, AND FAILURE TO PROPERLY TRAINFINANCIAL ADVISORS RELATING TO THE MARKETING AND SALE OFAUCTION RATE SECURITIES. THE FIRM DENIES THE ALLEGATIONSCONTAINED WITHIN THE NOTICE.







Initiated By: TEXAS STATE SECURITIES BOARD


Suspension


CEASE AND DESIST, RESCISSION, ADMINISTRATIVE FINE


Docket/Case Number: SOAH DOCKET #:IC 10-CDO-07



Allegations: THE NOTICE OF HEARING ALLEGES MISREPRESENTATION, OMISSION,FRAUD, CONFLICT OF INTEREST, AND FAILURE TO PROPERLY TRAINFINANCIAL ADVISORS RELATING TO THE MARKETING AND SALE OFAUCTION RATE SECURITIES. THE FIRM DENIES THE ALLEGATIONSCONTAINED WITHIN THE NOTICE.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACTS ORCONCLUSIONS OF LAW CONTAINED THEREIN, UBS SECURITIES LLC ANDUBS FINANCIAL SERVICES, INC. CONSENTED TO ENTRY OF AN ORDERPURSUANT TO WHICH UBS WILL REPURCHASE UP TO AN ADDITIONAL$200MM IN ARS FROM INVESTORS NATIONALLY. ADDITIONALLY, TEXASWILL RECEIVE A TOTAL PAYMENT OF $6,530,432.94 FROM UBS, FROM ATOTAL FINE OF $75MM PREVIOUSLY AGREED UPON WITH THE STATE OFMASSACHUSETTS AND THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION.

Firm Statement ON AUGUST 11, 2008 THE TEXAS STATE SECURITIES BOARD FILED AMOTION TO DISMISS BASED ON A PROSPECTIVE SETTLEMENTAGREEMENT. THE MOTION TO DISMISS WAS GRANTED ON AUGUST 20,2008 BY THE ADMINISTRATIVE LAW JUDGE. THIS SETTLEMENT WASFINALIZED ON 3/4/10.




i







Allegations: **02/17/2010**STIPULATION OF FACTS AND CONSENT TO PENALTYFILED BY NYSE REGULATION'S DIVISION OF ENFORCEMENT ANDPENDING.CONSENTED TO FINDINGS: FOR THE SOLE PURPOSE OFSETTLING THIS DISCIPLINARY PROCEEDING, WITHOUT ADJUDICATION OFANY OF THE ISSUES OF LAW OR FACT, AND WITHOUT ADMITTING ORDENYING ANY OF THE ALLEGATIONS OR FINDINGS, UBS SECURITIES LLCSTIPULATED THAT DURING THE PERIOD OF PERIOD JANUARY 2005THROUGH DECEMBER 31, 2008 (THE "FIRST RELEVANT PERIOD"), IT 1.VIOLATED NYSE RULE 92(A) BY, ON TWENTY-ONE OCCASIONS, ENTERINGAN ORDER TO BUY (SELL) AN NYSE-LISTED SECURITY WHILE KNOWINGLYIN POSSESSION OF A CUSTOMER ORDER TO BUY (SELL) SUCH SECURITY,WHICH COULD HAVE BEEN EXECUTED AT THE SAME PRICE. 2. VIOLATEDNYSE RULE 401, IN THAT IT FAILED TO CONDUCT ITS BUSINESSAFFAIRS IN ACCORDANCE WITH THE PRINCIPLES OF GOOD BUSINESSPRACTICE BY FAILING, ON ELEVEN OCCASIONS, TO ADEQUATELYDOCUMENT A CUSTOMER'S PERMISSION TO TRADE ALONG WITH, ORAHEAD OF, CUSTOMER ORDERS EXECUTED PURSUANT TO NYSERULE 92(B).3. VIOLATED SECTION 11(A)(1) OF THE EXCHANGE ACT ANDNYSE RULE 90 IN THAT, ON SEVEN OCCASIONS, ORDERS WEREEXECUTED BY THE FIRM'S FLOOR BROKERS ON THE NYSE FLOOR FORAN ACCOUNT IN WHICH THE FIRM HAD AN INTEREST WITHOUT SUCHORDERS COMPLYING WITH THE REQUIREMENTS OF A STATUTORYEXEMPTION. 4. VIOLATED NYSE RULE 410(B), IN THAT, ON FIVEOCCASIONS, IT ALLOWED PROPRIETARY ORDERS THAT COULD HAVEBEEN PROPERLY EXECUTED PURSUANT TO SECTION 11(A)(1)(G) OF THEEXCHANGE ACT TO BE TRANSMITTED TO THE NYSE FLOOR WITHOUTBEING IDENTIFIED IN A MANNER THAT WOULD ENABLE THE ORDER TOBE HANDLED PURSUANT TO THE REQUIREMENTS OF EXCHANGE ACT SECTION 11(A)(1)(G). 5.VIOLATED NYSE RULE 132.30 BY SUBMITTING, ON THOUSANDS OFOCCASIONS, INACCURATE ACCOUNT TYPE INDICATORS TO THE NYSEFOR COMPARISON AND SETTLEMENT. 6. VIOLATED NYSE RULES 410(A)AND 440 AND EXCHANGE ACT RULES 17A-3 (A)(1) AND (3) AND 17A-4(B)(1),IN THAT THE FIRM FAILED TO MAKE AND MAINTAIN CERTAIN RECORDSOF ORDER INFORMATION AND ORDERTICKETS.ADDITIONALLY, DURING THE PERIOD JANUARY 19, 2007THROUGH DECEMBER 24, 2008, (THE "SECOND RELEVANT PERIOD"), IT 7.VIOLATED NYSE RULE 123C BY, FOR 1,231 MOC/LOC ORDERS, FAILING TOCOMPLY WITH THE REQUIREMENTS GOVERNING THE ENTRY ANDCANCELLATION OF MARKET-ON-CLOSE AND LIMIT-ON-CLOSE ORDERS; 8.VIOLATED NYSE RULE 410B BY, ON THREE OCCASIONS, FAILING TOREPORT TO THE NYSE CERTAIN TRANSACTIONS IN NYSE-LISTEDSECURITIES THAT WERE NOT REPORTED TO THE CONSOLIDATED TAPEBETWEEN SEPTEMBER 1, 2008 AND JANUARY 19, 2009; AND 9. VIOLATEDNYSE RULE 342 BY FAILING TO PROVIDE FOR APPROPRIATEPROCEDURES OF SUPERVISION AND CONTROL, INCLUDING ASEPARATE SYSTEM OF FOLLOW-UP AND REVIEW, REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULES WITH RESPECTTO (A) THE TRANSMISSION AND EXECUTION OF CERTAIN PROPRIETARYAND AGENCY TRADES ON THE NYSE FLOOR; (B) THE SUBMISSION OFCERTAIN AUDIT TRAIL DATA; (C) THE RETENTION OF CERTAINRECORDS PERTAINING TO ORDERINFORMATION AND ORDERTICKETS; (D) THE ENTRY AND/OR CANCELLATION OF CERTAINMARKET-ON-CLOSE AND LIMIT-ON-CLOSEORDERS; AND (E) THESUBMISSION OF CERTAIN NYSE RULE 410B REPORTS.STIPULATEDSANCTION: CENSURE AND FINE IN THE AMOUNT OF $350,000.







Initiated By: NEW YORK STOCK EXCHANGE DIVISION OF ENFORCEMENT




Docket/Case Number: HBD# 10-07



**02/17/2010**STIPULATION OF FACTS AND CONSENT TO PENALTYFILED BY NYSE REGULATION'S DIVISION OF ENFORCEMENT ANDPENDING.CONSENTED TO FINDINGS: FOR THE SOLE PURPOSE OFSETTLING THIS DISCIPLINARY PROCEEDING, WITHOUT ADJUDICATION OFANY OF THE ISSUES OF LAW OR FACT, AND WITHOUT ADMITTING ORDENYING ANY OF THE ALLEGATIONS OR FINDINGS, UBS SECURITIES LLCSTIPULATED THAT DURING THE PERIOD OF PERIOD JANUARY 2005THROUGH DECEMBER 31, 2008 (THE "FIRST RELEVANT PERIOD"), IT 1.VIOLATED NYSE RULE 92(A) BY, ON TWENTY-ONE OCCASIONS, ENTERINGAN ORDER TO BUY (SELL) AN NYSE-LISTED SECURITY WHILE KNOWINGLYIN POSSESSION OF A CUSTOMER ORDER TO BUY (SELL) SUCH SECURITY,WHICH COULD HAVE BEEN EXECUTED AT THE SAME PRICE. 2. VIOLATEDNYSE RULE 401, IN THAT IT FAILED TO CONDUCT ITS BUSINESSAFFAIRS IN ACCORDANCE WITH THE PRINCIPLES OF GOOD BUSINESSPRACTICE BY FAILING, ON ELEVEN OCCASIONS, TO ADEQUATELYDOCUMENT A CUSTOMER'S PERMISSION TO TRADE ALONG WITH, ORAHEAD OF, CUSTOMER ORDERS EXECUTED PURSUANT TO NYSERULE 92(B).3. VIOLATED SECTION 11(A)(1) OF THE EXCHANGE ACT ANDNYSE RULE 90 IN THAT, ON SEVEN OCCASIONS, ORDERS WEREEXECUTED BY THE FIRM'S FLOOR BROKERS ON THE NYSE FLOOR FORAN ACCOUNT IN WHICH THE FIRM HAD AN INTEREST WITHOUT SUCHORDERS COMPLYING WITH THE REQUIREMENTS OF A STATUTORYEXEMPTION. 4. VIOLATED NYSE RULE 410(B), IN THAT, ON FIVEOCCASIONS, IT ALLOWED PROPRIETARY ORDERS THAT COULD HAVEBEEN PROPERLY EXECUTED PURSUANT TO SECTION 11(A)(1)(G) OF THEEXCHANGE ACT TO BE TRANSMITTED TO THE NYSE FLOOR WITHOUTBEING IDENTIFIED IN A MANNER THAT WOULD ENABLE THE ORDER TOBE HANDLED PURSUANT TO THE REQUIREMENTS OF EXCHANGE ACT SECTION 11(A)(1)(G). 5.VIOLATED NYSE RULE 132.30 BY SUBMITTING, ON THOUSANDS OFOCCASIONS, INACCURATE ACCOUNT TYPE INDICATORS TO THE NYSEFOR COMPARISON AND SETTLEMENT. 6. VIOLATED NYSE RULES 410(A)AND 440 AND EXCHANGE ACT RULES 17A-3 (A)(1) AND (3) AND 17A-4(B)(1),IN THAT THE FIRM FAILED TO MAKE AND MAINTAIN CERTAIN RECORDSOF ORDER INFORMATION AND ORDERTICKETS.ADDITIONALLY, DURING THE PERIOD JANUARY 19, 2007THROUGH DECEMBER 24, 2008, (THE "SECOND RELEVANT PERIOD"), IT 7.VIOLATED NYSE RULE 123C BY, FOR 1,231 MOC/LOC ORDERS, FAILING TOCOMPLY WITH THE REQUIREMENTS GOVERNING THE ENTRY ANDCANCELLATION OF MARKET-ON-CLOSE AND LIMIT-ON-CLOSE ORDERS; 8.VIOLATED NYSE RULE 410B BY, ON THREE OCCASIONS, FAILING TOREPORT TO THE NYSE CERTAIN TRANSACTIONS IN NYSE-LISTEDSECURITIES THAT WERE NOT REPORTED TO THE CONSOLIDATED TAPEBETWEEN SEPTEMBER 1, 2008 AND JANUARY 19, 2009; AND 9. VIOLATEDNYSE RULE 342 BY FAILING TO PROVIDE FOR APPROPRIATEPROCEDURES OF SUPERVISION AND CONTROL, INCLUDING ASEPARATE SYSTEM OF FOLLOW-UP AND REVIEW, REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULES WITH RESPECTTO (A) THE TRANSMISSION AND EXECUTION OF CERTAIN PROPRIETARYAND AGENCY TRADES ON THE NYSE FLOOR; (B) THE SUBMISSION OFCERTAIN AUDIT TRAIL DATA; (C) THE RETENTION OF CERTAINRECORDS PERTAINING TO ORDERINFORMATION AND ORDERTICKETS; (D) THE ENTRY AND/OR CANCELLATION OF CERTAINMARKET-ON-CLOSE AND LIMIT-ON-CLOSEORDERS; AND (E) THESUBMISSION OF CERTAIN NYSE RULE 410B REPORTS.STIPULATEDSANCTION: CENSURE AND FINE IN THE AMOUNT OF $350,000.


Resolution:


Sanction Details: **03/15/2010**DECISION NO.10-07 ISSUED BY NYSE HEARING.DECISION:DURING THE PERIOD OF PERIOD JANUARY 2005 THROUGHDECEMBER 31, 2008 (THE "FIRST RELEVANT PERIOD"), UBS SECURITIESLLC VIOLATED NYSE RULE 92(A) BY ENTERING ANORDER TO BUY (SELL) AN NYSE-LISTED SECURITY WHILE KNOWINGLY INPOSSESSION OF A CUSTOMER ORDER TO BUY (SELL) SUCHSECURITY,WHICH COULD HAVE BEEN EXECUTED AT THE SAME PRICE;VIOLATED NYSE RULE 401 BY FAILING TO CONDUCT ITS BUSINESSAFFAIRS IN ACCORDANCE WITH THE PRINCIPLES OF GOOD BUSINESSPRACTICE BY FAILING TO ADEQUATELY DOCUMENT A CUSTOMER'SPERMISSION TO TRADE ALONG WITH, OR AHEAD OF, CUSTOMER ORDERSEXECUTED PURSUANT TO NYSE RULE 92(B); VIOLATED SECTION 11(A)(1)OF THE EXCHANGE ACT AND NYSE RULE 90 INTHAT ORDERS WERE EXECUTED BY THE FIRM'S FLOOR BROKERS ON THENYSE FLOOR FOR AN ACCOUNT IN WHICH THE FIRM HAD AN INTERESTWITHOUT SUCH ORDERS COMPLYING WITH THEREQUIREMENTS OF A STATUTORY EXEMPTION; VIOLATED NYSE RULE410(B), BY ALLOWING PROPRIETARY ORDERS THAT COULD HAVE BEENPROPERLY EXECUTED PURSUANT TO SECTION 11(A)(1)(G) OF THEEXCHANGE ACT TO BE TRANSMITTED TO THE NYSE FLOOR WITHOUTBEING IDENTIFIED IN A MANNER THAT WOULD ENABLE THE ORDER TO BEHANDLED PURSUANT TO THE REQUIREMENTS OF EXCHANGE ACTSECTION 11(A)(1)(G); VIOLATED NYSE RULE 132.30 BY SUBMITTINGINACCURATE ACCOUNT TYPE INDICATORS TO THE NYSE FORCOMPARISON AND SETTLEMENT; VIOLATED NYSE RULES 410(A) AND 440AND EXCHANGE ACT RULES 17A-3(A)(1) AND (3) AND 17A-4(B)(1) BY FAILINGTO MAKE AND MAINTAIN CERTAIN RECORDS OFORDER INFORMATION AND ORDER TICKETS;ADDITIONALLY, DURING THEPERIOD JANUARY 19, 2007 THROUGH DECEMBER 24, 2008,(THE "SECOND RELEVANT PERIOD"), UBS SECURITIES LLC VIOLATED NYSERULE 123C BY FAILING TO COMPLY WITH THE REQUIREMENTSGOVERNING THE ENTRY AND CANCELLATION OF MARKET-ON-CLOSE ANDLIMIT-ON-CLOSE ORDERS; VIOLATED NYSE RULE 410B BY FAILING TOREPORT TO THE NYSE CERTAIN TRANSACTIONS IN NYSE-LISTEDSECURITIES ** CONTINUED AT 14**


No


Decision





www.finra.org/brokercheck User Guidance**03/15/2010**DECISION NO.10-07 ISSUED BY NYSE HEARING.DECISION:DURING THE PERIOD OF PERIOD JANUARY 2005 THROUGHDECEMBER 31, 2008 (THE "FIRST RELEVANT PERIOD"), UBS SECURITIESLLC VIOLATED NYSE RULE 92(A) BY ENTERING ANORDER TO BUY (SELL) AN NYSE-LISTED SECURITY WHILE KNOWINGLY INPOSSESSION OF A CUSTOMER ORDER TO BUY (SELL) SUCHSECURITY,WHICH COULD HAVE BEEN EXECUTED AT THE SAME PRICE;VIOLATED NYSE RULE 401 BY FAILING TO CONDUCT ITS BUSINESSAFFAIRS IN ACCORDANCE WITH THE PRINCIPLES OF GOOD BUSINESSPRACTICE BY FAILING TO ADEQUATELY DOCUMENT A CUSTOMER'SPERMISSION TO TRADE ALONG WITH, OR AHEAD OF, CUSTOMER ORDERSEXECUTED PURSUANT TO NYSE RULE 92(B); VIOLATED SECTION 11(A)(1)OF THE EXCHANGE ACT AND NYSE RULE 90 INTHAT ORDERS WERE EXECUTED BY THE FIRM'S FLOOR BROKERS ON THENYSE FLOOR FOR AN ACCOUNT IN WHICH THE FIRM HAD AN INTERESTWITHOUT SUCH ORDERS COMPLYING WITH THEREQUIREMENTS OF A STATUTORY EXEMPTION; VIOLATED NYSE RULE410(B), BY ALLOWING PROPRIETARY ORDERS THAT COULD HAVE BEENPROPERLY EXECUTED PURSUANT TO SECTION 11(A)(1)(G) OF THEEXCHANGE ACT TO BE TRANSMITTED TO THE NYSE FLOOR WITHOUTBEING IDENTIFIED IN A MANNER THAT WOULD ENABLE THE ORDER TO BEHANDLED PURSUANT TO THE REQUIREMENTS OF EXCHANGE ACTSECTION 11(A)(1)(G); VIOLATED NYSE RULE 132.30 BY SUBMITTINGINACCURATE ACCOUNT TYPE INDICATORS TO THE NYSE FORCOMPARISON AND SETTLEMENT; VIOLATED NYSE RULES 410(A) AND 440AND EXCHANGE ACT RULES 17A-3(A)(1) AND (3) AND 17A-4(B)(1) BY FAILINGTO MAKE AND MAINTAIN CERTAIN RECORDS OFORDER INFORMATION AND ORDER TICKETS;ADDITIONALLY, DURING THEPERIOD JANUARY 19, 2007 THROUGH DECEMBER 24, 2008,(THE "SECOND RELEVANT PERIOD"), UBS SECURITIES LLC VIOLATED NYSERULE 123C BY FAILING TO COMPLY WITH THE REQUIREMENTSGOVERNING THE ENTRY AND CANCELLATION OF MARKET-ON-CLOSE ANDLIMIT-ON-CLOSE ORDERS; VIOLATED NYSE RULE 410B BY FAILING TOREPORT TO THE NYSE CERTAIN TRANSACTIONS IN NYSE-LISTEDSECURITIES ** CONTINUED AT 14**

Regulator Statement **CONTINUED FROM 13C**THAT WERE NOT REPORTED TO THECONSOLIDATED TAPE BETWEEN SEPTEMBER 1, 2008 AND JANUARY 19,2009; VIOLATED NYSE RULE 342 BY FAILING TO PROVIDE FORAPPROPRIATE PROCEDURES OF SUPERVISION AND CONTROL, INCLUDINGA SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW, REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULES WITH RESPECTTO (A) THE TRANSMISSION AND EXECUTION OF CERTAIN PROPRIETARYAND AGENCY TRADES ON THE NYSE FLOOR; (B) THE SUBMISSION OFCERTAIN AUDIT TRAIL DATA; (C) THE RETENTION OF CERTAIN RECORDSPERTAINING TO ORDER INFORMATION AND ORDER TICKETS; (D) THEENTRY AND/OR CANCELLATION OF CERTAIN MARKET-ON-CLOSE ANDLIMIT-ON-CLOSE ORDERS; AND (E)THE SUBMISSION OF CERTAIN NYSERULE 410BREPORTS.SANCTION: CONSENTED TO CENSURE AND A $350,000 FINE.**04/13/2010** THE DECISION BECAME FINAL AT THE CLOSE OF BUSINESSON APRIL 9, 2010 AND THE FINE BECAME PAYABLE ON THAT SAME DATE.






**CONTINUED FROM 13C**THAT WERE NOT REPORTED TO THECONSOLIDATED TAPE BETWEEN SEPTEMBER 1, 2008 AND JANUARY 19,2009; VIOLATED NYSE RULE 342 BY FAILING TO PROVIDE FORAPPROPRIATE PROCEDURES OF SUPERVISION AND CONTROL, INCLUDINGA SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW, REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULES WITH RESPECTTO (A) THE TRANSMISSION AND EXECUTION OF CERTAIN PROPRIETARYAND AGENCY TRADES ON THE NYSE FLOOR; (B) THE SUBMISSION OFCERTAIN AUDIT TRAIL DATA; (C) THE RETENTION OF CERTAIN RECORDSPERTAINING TO ORDER INFORMATION AND ORDER TICKETS; (D) THEENTRY AND/OR CANCELLATION OF CERTAIN MARKET-ON-CLOSE ANDLIMIT-ON-CLOSE ORDERS; AND (E)THE SUBMISSION OF CERTAIN NYSERULE 410BREPORTS.SANCTION: CONSENTED TO CENSURE AND A $350,000 FINE.**04/13/2010** THE DECISION BECAME FINAL AT THE CLOSE OF BUSINESSON APRIL 9, 2010 AND THE FINE BECAME PAYABLE ON THAT SAME DATE.


Allegations: STIPULATION OF FACTS AND CONSENT TO PENALTY FILED BY NYSEREGULATION'S DIVISION OF ENFORCEMENT. CONSENTED TO FINDINGS:FOR THE SOLE PURPOSE OF SETTLING THIS DISCIPLINARY PROCEEDING,WITHOUT ADJUDICATION OF ANY OF THE ISSUES OF LAW OR FACT, ANDWITHOUT ADMITTING OR DENYING ANY OF THE ALLEGATIONS ORFINDINGS, UBS SECURITIES LLC STIPULATED THAT DURING THE PERIODOF PERIOD JANUARY 2005 THROUGH DECEMBER 31, 2008 (THE "FIRSTRELEVANT PERIOD"), IT 1. VIOLATED NYSE RULE 92(A) BY, ON TWENTY-ONE OCCASIONS, ENTERING AN ORDER TO BUY (SELL) AN NYSE-LISTEDSECURITY WHILE KNOWINGLY IN POSSESSION OF A CUSTOMER ORDERTO BUY (SELL) SUCH SECURITY, WHICH COULD HAVE BEEN EXECUTED ATTHE SAME PRICE. 2. VIOLATED NYSE RULE 401, IN THAT IT FAILED TOCONDUCT ITS BUSINESS AFFAIRS IN ACCORDANCE WITH THE PRINCIPLESOF GOOD BUSINESS PRACTICE BY FAILING, ON ELEVEN OCCASIONS, TOADEQUATELY DOCUMENT A CUSTOMER'S PERMISSION TO TRADE ALONGWITH, OR AHEAD OF, CUSTOMER ORDERS EXECUTED PURSUANT TONYSE RULE 92(B).3. VIOLATED SECTION 11(A)(1) OF THE EXCHANGE ACTAND NYSE RULE 90 IN THAT, ON SEVEN OCCASIONS, ORDERS WEREEXECUTED BY THE FIRM'S FLOOR BROKERS ON THE NYSE FLOOR FOR ANACCOUNT IN WHICH THE FIRM HAD AN INTEREST WITHOUT SUCH ORDERSCOMPLYING WITH THE REQUIREMENTS OF A STATUTORY EXEMPTION. 4.VIOLATED NYSE RULE 410(B), IN THAT, ON FIVE OCCASIONS, IT ALLOWEDPROPRIETARY ORDERS THAT COULD HAVE BEEN PROPERLY EXECUTEDPURSUANT TO SECTION 11(A)(1)(G) OF THE EXCHANGE ACT TO BETRANSMITTED TO THE NYSE FLOOR WITHOUT BEING IDENTIFIED IN AMANNER THAT WOULD ENABLE THE ORDER TO BE HANDLED PURSUANTTO THE REQUIREMENTS OF EXCHANGE ACT SECTION 11(A)(1)(G). 5.VIOLATED NYSE RULE 132.30 BY SUBMITTING, ON THOUSANDS OFOCCASIONS, INACCURATE ACCOUNT TYPE INDICATORS TO THE NYSE FORCOMPARISON AND SETTLEMENT. 6. VIOLATED NYSE RULES 410(A) AND 440AND EXCHANGE ACT RULES 17A-3 (A)(1) AND (3) AND 17A-4(B)(1), IN THATTHE FIRM FAILED TO MAKE AND MAINTAIN CERTAIN RECORDS OF ORDERINFORMATION AND ORDER TICKETS.ADDITIONALLY, DURING THE PERIODJANUARY 19, 2007 THROUGH DECEMBER 24, 2008, (THE "SECONDRELEVANT PERIOD"), IT 7. VIOLATED NYSE RULE 123C BY, FOR 1,231MOC/LOC ORDERS, FAILING TO COMPLY WITH THE REQUIREMENTSGOVERNING THE ENTRY AND CANCELLATION OF MARKET-ON-CLOSE ANDLIMIT-ON-CLOSE ORDERS; 8. VIOLATED NYSE RULE 410B BY, ON THREEOCCASIONS, FAILING TO REPORT TO THE NYSE CERTAIN TRANSACTIONSIN NYSE-LISTED SECURITIES THAT WERE NOT REPORTED TO THECONSOLIDATED TAPE BETWEEN SEPTEMBER 1, 2008 AND JANUARY 19,2009; AND 9. VIOLATED NYSE RULE 342 BY FAILING TO PROVIDE FORAPPROPRIATE PROCEDURES OF SUPERVISION AND CONTROL, INCLUDINGA SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW, REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULES WITH RESPECTTO (A) THE TRANSMISSION AND EXECUTION OF CERTAIN PROPRIETARYAND AGENCY TRADES ON THE NYSE FLOOR; (B) THE SUBMISSION OFCERTAIN AUDIT TRAIL DATA; (C) THE RETENTION OF CERTAIN RECORDSPERTAINING TO ORDERINFORMATION AND ORDER TICKETS; (D) THEENTRY AND/OR CANCELLATION OF CERTAIN MARKET-ON-CLOSE ANDLIMIT-ON-CLOSEORDERS; AND (E) THE SUBMISSION OF CERTAIN NYSERULE 410B REPORTS.STIPULATED SANCTION: CENSURE AND FINE IN THEAMOUNT OF $350,000.









Censure


FINE OF $350,000UBS WILL OFFER REMUNERATION TO 5 CUSTOMERS IN CONNECTIONWITH THE RULE 92 VIOLATIONS. UBS WILL HAVE AN INDEPENDENTVERIFICATION AND TESTING CONDUCTED OF THE RELEVANTALGORITHMIC TRADING SYSTEM TO EXAMINE WHETHER ITS TRADINGCONFORMS WITH THE BLACK BOX EXCEPTION OF RULE 92.





STIPULATION OF FACTS AND CONSENT TO PENALTY FILED BY NYSEREGULATION'S DIVISION OF ENFORCEMENT. CONSENTED TO FINDINGS:FOR THE SOLE PURPOSE OF SETTLING THIS DISCIPLINARY PROCEEDING,WITHOUT ADJUDICATION OF ANY OF THE ISSUES OF LAW OR FACT, ANDWITHOUT ADMITTING OR DENYING ANY OF THE ALLEGATIONS ORFINDINGS, UBS SECURITIES LLC STIPULATED THAT DURING THE PERIODOF PERIOD JANUARY 2005 THROUGH DECEMBER 31, 2008 (THE "FIRSTRELEVANT PERIOD"), IT 1. VIOLATED NYSE RULE 92(A) BY, ON TWENTY-ONE OCCASIONS, ENTERING AN ORDER TO BUY (SELL) AN NYSE-LISTEDSECURITY WHILE KNOWINGLY IN POSSESSION OF A CUSTOMER ORDERTO BUY (SELL) SUCH SECURITY, WHICH COULD HAVE BEEN EXECUTED ATTHE SAME PRICE. 2. VIOLATED NYSE RULE 401, IN THAT IT FAILED TOCONDUCT ITS BUSINESS AFFAIRS IN ACCORDANCE WITH THE PRINCIPLESOF GOOD BUSINESS PRACTICE BY FAILING, ON ELEVEN OCCASIONS, TOADEQUATELY DOCUMENT A CUSTOMER'S PERMISSION TO TRADE ALONGWITH, OR AHEAD OF, CUSTOMER ORDERS EXECUTED PURSUANT TONYSE RULE 92(B).3. VIOLATED SECTION 11(A)(1) OF THE EXCHANGE ACTAND NYSE RULE 90 IN THAT, ON SEVEN OCCASIONS, ORDERS WEREEXECUTED BY THE FIRM'S FLOOR BROKERS ON THE NYSE FLOOR FOR ANACCOUNT IN WHICH THE FIRM HAD AN INTEREST WITHOUT SUCH ORDERSCOMPLYING WITH THE REQUIREMENTS OF A STATUTORY EXEMPTION. 4.VIOLATED NYSE RULE 410(B), IN THAT, ON FIVE OCCASIONS, IT ALLOWEDPROPRIETARY ORDERS THAT COULD HAVE BEEN PROPERLY EXECUTEDPURSUANT TO SECTION 11(A)(1)(G) OF THE EXCHANGE ACT TO BETRANSMITTED TO THE NYSE FLOOR WITHOUT BEING IDENTIFIED IN AMANNER THAT WOULD ENABLE THE ORDER TO BE HANDLED PURSUANTTO THE REQUIREMENTS OF EXCHANGE ACT SECTION 11(A)(1)(G). 5.VIOLATED NYSE RULE 132.30 BY SUBMITTING, ON THOUSANDS OFOCCASIONS, INACCURATE ACCOUNT TYPE INDICATORS TO THE NYSE FORCOMPARISON AND SETTLEMENT. 6. VIOLATED NYSE RULES 410(A) AND 440AND EXCHANGE ACT RULES 17A-3 (A)(1) AND (3) AND 17A-4(B)(1), IN THATTHE FIRM FAILED TO MAKE AND MAINTAIN CERTAIN RECORDS OF ORDERINFORMATION AND ORDER TICKETS.ADDITIONALLY, DURING THE PERIODJANUARY 19, 2007 THROUGH DECEMBER 24, 2008, (THE "SECONDRELEVANT PERIOD"), IT 7. VIOLATED NYSE RULE 123C BY, FOR 1,231MOC/LOC ORDERS, FAILING TO COMPLY WITH THE REQUIREMENTSGOVERNING THE ENTRY AND CANCELLATION OF MARKET-ON-CLOSE ANDLIMIT-ON-CLOSE ORDERS; 8. VIOLATED NYSE RULE 410B BY, ON THREEOCCASIONS, FAILING TO REPORT TO THE NYSE CERTAIN TRANSACTIONSIN NYSE-LISTED SECURITIES THAT WERE NOT REPORTED TO THECONSOLIDATED TAPE BETWEEN SEPTEMBER 1, 2008 AND JANUARY 19,2009; AND 9. VIOLATED NYSE RULE 342 BY FAILING TO PROVIDE FORAPPROPRIATE PROCEDURES OF SUPERVISION AND CONTROL, INCLUDINGA SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW, REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULES WITH RESPECTTO (A) THE TRANSMISSION AND EXECUTION OF CERTAIN PROPRIETARYAND AGENCY TRADES ON THE NYSE FLOOR; (B) THE SUBMISSION OFCERTAIN AUDIT TRAIL DATA; (C) THE RETENTION OF CERTAIN RECORDSPERTAINING TO ORDERINFORMATION AND ORDER TICKETS; (D) THEENTRY AND/OR CANCELLATION OF CERTAIN MARKET-ON-CLOSE ANDLIMIT-ON-CLOSEORDERS; AND (E) THE SUBMISSION OF CERTAIN NYSERULE 410B REPORTS.STIPULATED SANCTION: CENSURE AND FINE IN THEAMOUNT OF $350,000.


Resolution:


Sanction Details: DECISION NO.10-07 ISSUED BY NYSE HEARING. DECISION:DURING THEPERIOD OF PERIOD JANUARY 2005 THROUGH DECEMBER 31, 2008 (THE "FIRST RELEVANT PERIOD"), UBS SECURITIES LLC VIOLATED NYSE RULE92(A) BY ENTERING AN ORDER TO BUY (SELL) AN NYSE-LISTED SECURITYWHILE KNOWINGLY IN POSSESSION OF A CUSTOMER ORDER TO BUY(SELL) SUCH SECURITY,WHICH COULD HAVE BEEN EXECUTED AT THESAME PRICE; VIOLATED NYSE RULE 401 BY FAILING TO CONDUCT ITSBUSINESS AFFAIRS IN ACCORDANCE WITH THE PRINCIPLES OF GOODBUSINESS PRACTICE BY FAILING TO ADEQUATELY DOCUMENT ACUSTOMER'S PERMISSION TO TRADE ALONG WITH, OR AHEAD OF,CUSTOMER ORDERS EXECUTED PURSUANT TO NYSE RULE 92(B);VIOLATED SECTION 11(A)(1) OF THE EXCHANGE ACT AND NYSE RULE 90 INTHAT ORDERS WERE EXECUTED BY THE FIRM'S FLOOR BROKERS ON THENYSE FLOOR FOR AN ACCOUNT IN WHICH THE FIRM HAD AN INTERESTWITHOUT SUCH ORDERS COMPLYING WITH THE REQUIREMENTS OF ASTATUTORY EXEMPTION; VIOLATED NYSE RULE 410(B), BY ALLOWINGPROPRIETARY ORDERS THAT COULD HAVE BEEN PROPERLY EXECUTEDPURSUANT TO SECTION 11(A)(1)(G) OF THE EXCHANGE ACT TO BETRANSMITTED TO THE NYSE FLOOR WITHOUT BEING IDENTIFIED IN AMANNER THAT WOULD ENABLE THE ORDER TO BE HANDLED PURSUANTTO THE REQUIREMENTS OF EXCHANGE ACT SECTION 11(A)(1)(G);VIOLATED NYSE RULE 132.30 BY SUBMITTING INACCURATE ACCOUNTTYPE INDICATORS TO THE NYSE FOR COMPARISON AND SETTLEMENT;VIOLATED NYSE RULES 410(A) AND 440 AND EXCHANGE ACT RULES 17A-3(A)(1) AND (3) AND 17A-4(B)(1) BY FAILING TO MAKE AND MAINTAINCERTAIN RECORDS OF ORDER INFORMATION AND ORDERTICKETS;ADDITIONALLY, DURING THE PERIOD JANUARY 19, 2007THROUGH DECEMBER 24, 2008, (THE "SECOND RELEVANT PERIOD"), UBSSECURITIES LLC VIOLATED NYSE RULE 123C BY FAILING TO COMPLY WITHTHE REQUIREMENTS GOVERNING THE ENTRY AND CANCELLATION OFMARKET-ON-CLOSE AND LIMIT-ON-CLOSE ORDERS; VIOLATED NYSE RULE410B BY FAILING TO REPORT TO THE NYSE CERTAIN TRANSACTIONS INNYSE-LISTED SECURITIES ** CONTINUED AT 14**


Decision





www.finra.org/brokercheck User GuidanceDECISION NO.10-07 ISSUED BY NYSE HEARING. DECISION:DURING THEPERIOD OF PERIOD JANUARY 2005 THROUGH DECEMBER 31, 2008 (THE "FIRST RELEVANT PERIOD"), UBS SECURITIES LLC VIOLATED NYSE RULE92(A) BY ENTERING AN ORDER TO BUY (SELL) AN NYSE-LISTED SECURITYWHILE KNOWINGLY IN POSSESSION OF A CUSTOMER ORDER TO BUY(SELL) SUCH SECURITY,WHICH COULD HAVE BEEN EXECUTED AT THESAME PRICE; VIOLATED NYSE RULE 401 BY FAILING TO CONDUCT ITSBUSINESS AFFAIRS IN ACCORDANCE WITH THE PRINCIPLES OF GOODBUSINESS PRACTICE BY FAILING TO ADEQUATELY DOCUMENT ACUSTOMER'S PERMISSION TO TRADE ALONG WITH, OR AHEAD OF,CUSTOMER ORDERS EXECUTED PURSUANT TO NYSE RULE 92(B);VIOLATED SECTION 11(A)(1) OF THE EXCHANGE ACT AND NYSE RULE 90 INTHAT ORDERS WERE EXECUTED BY THE FIRM'S FLOOR BROKERS ON THENYSE FLOOR FOR AN ACCOUNT IN WHICH THE FIRM HAD AN INTERESTWITHOUT SUCH ORDERS COMPLYING WITH THE REQUIREMENTS OF ASTATUTORY EXEMPTION; VIOLATED NYSE RULE 410(B), BY ALLOWINGPROPRIETARY ORDERS THAT COULD HAVE BEEN PROPERLY EXECUTEDPURSUANT TO SECTION 11(A)(1)(G) OF THE EXCHANGE ACT TO BETRANSMITTED TO THE NYSE FLOOR WITHOUT BEING IDENTIFIED IN AMANNER THAT WOULD ENABLE THE ORDER TO BE HANDLED PURSUANTTO THE REQUIREMENTS OF EXCHANGE ACT SECTION 11(A)(1)(G);VIOLATED NYSE RULE 132.30 BY SUBMITTING INACCURATE ACCOUNTTYPE INDICATORS TO THE NYSE FOR COMPARISON AND SETTLEMENT;VIOLATED NYSE RULES 410(A) AND 440 AND EXCHANGE ACT RULES 17A-3(A)(1) AND (3) AND 17A-4(B)(1) BY FAILING TO MAKE AND MAINTAINCERTAIN RECORDS OF ORDER INFORMATION AND ORDERTICKETS;ADDITIONALLY, DURING THE PERIOD JANUARY 19, 2007THROUGH DECEMBER 24, 2008, (THE "SECOND RELEVANT PERIOD"), UBSSECURITIES LLC VIOLATED NYSE RULE 123C BY FAILING TO COMPLY WITHTHE REQUIREMENTS GOVERNING THE ENTRY AND CANCELLATION OFMARKET-ON-CLOSE AND LIMIT-ON-CLOSE ORDERS; VIOLATED NYSE RULE410B BY FAILING TO REPORT TO THE NYSE CERTAIN TRANSACTIONS INNYSE-LISTED SECURITIES ** CONTINUED AT 14**

Firm Statement CONTINUED FROM 13C**THAT WERE NOT REPORTED TO THECONSOLIDATED TAPE BETWEEN SEPTEMBER 1, 2008 AND JANUARY 19,2009; VIOLATED NYSE RULE 342 BY FAILING TO PROVIDE FORAPPROPRIATE PROCEDURES OF SUPERVISION AND CONTROL, INCLUDINGA SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW, REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULES WITH RESPECTTO (A) THE TRANSMISSION AND EXECUTION OF CERTAIN PROPRIETARYAND AGENCY TRADES ON THE NYSE FLOOR; (B) THE SUBMISSION OFCERTAIN AUDIT TRAIL DATA; (C) THE RETENTION OF CERTAIN RECORDSPERTAINING TO ORDER INFORMATION AND ORDER TICKETS; (D) THEENTRY AND/OR CANCELLATION OF CERTAIN MARKET-ON-CLOSE ANDLIMIT-ON-CLOSE ORDERS; AND (E)THE SUBMISSION OF CERTAIN NYSERULE 410B REPORTS.SANCTION: CONSENTED TO CENSURE AND A$350,000 FINE. **04/13/2010** THE DECISION BECAME FINAL AT THE CLOSEOF BUSINESS ON APRIL 9, 2010 AND THE FINE BECAME PAYABLE ON THATSAME DATE.







i


Initiated By: FINRA






Other Product Type(s): REPORTABLE SECURITIES, NATIONAL MARKET SYSTEM SECURITIES

Allegations: SEC RULE 605 OF REGULATION NMS, NASD RULES 2110, 3010, 6130(D),6955(A) - UBS SECURITIES LLC FAILED TO REPORT TO THE FINRA/NASDAQTRADE REPORTING FACILITY THE CORRECT SYMBOL INDICATINGWHETHER TRANSACTIONS WERE BUY, SELL, SELL SHORT OR CROSS FORTRANSACTIONS IN REPORTABLE SECURITIES. THE FIRM TRANSMITTEDREPORTS TO THE ORDER AUDIT TRAIL SYSTEM (OATS) THAT FAILED TOTRANSMIT, OR INCORRECTLY TRANSMITTED, EXECUTION REPORTS, DESKREPORTS, CANCEL REPORTS OR ROUTE REPORTS. THE FIRM MADEAVAILABLE A REPORT ON THE COVERED ORDERS IN NATIONAL MARKETSYSTEM SECURITIES IT RECEIVED FOR EXECUTION FROM ANY PERSONAND INCORRECTLY CLASSIFIED A NOT HELD ORDER AS COVERED AND INONE INSTANCE, COVERING MARKETABLE LIMIT ORDERS BETWEEN 5,000AND 9,999 SHARES, IT FAILED TO PUBLISH ACCURATE STATISTICS. THEFIRM FAILED TO PROVIDE DOCUMENTARY EVIDENCE OF HOW ITCLASSIFIED AN ORDER. THE FIRM'S SUPERVISORY SYSTEM DID NOTPROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH APPLICABLE SECURITIES LAWS, REGULATIONS ANDNASD RULES CONCERNING ORDER HANDLING, BEST EXECUTION, SALESTRANSACTIONS, ANTI-INTIMIDATION/COORDINATION AND OTHER RULES,INCLUDING THE MAINTENANCE OF APPROPRIATE BOOKS AND RECORDS.THE FIRM FAILED TO PROVIDE DOCUMENTARY EVIDENCE THAT ON ONEDAY IT PERFORMED THE SUPERVISORY REVIEWS SET FORTH IN ITSWRITTEN SUPERVISORY PROCEDURES CONCERNING BEST EXECUTION,TRADE REPORTING, SALES TRANSACTIONS (LONG/SHORTDETERMINATION AND MARKING), TRADING HALTS, OATS (ACCURATE ANDTIMELY OATS SUBMISSIONS AND REPAIRING REJECTED REPORTABLEORDER EVENTS) AND BOOKS AND RECORDS.










Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $60,000 AND REQUIRED TOREVISE ITS WRITTEN SUPERVISORY PROCEDURES REGARDING ORDERHANDLING, BEST EXECUTION, SALES TRANSACTIONS, ANTI-INTIMIDATION/COORDINATION OTHER RULES, TRADE REPORTING,TRADING HALTS, OATS (ACCURATE AND TIMELY OATS SUBMISSIONS ANDREPAIRING REJECTED REPORTABLE ORDER EVENTS)AND BOOKS ANDRECORDS WITHIN 30 BUSINESS DAYS OF ACCEPTANCE OF THIS AWC BYTHE NAC.


No




Allegations: SEC RULE 605 OF REGULATION NMS, NASD RULES 2110, 3010, 6130(D),6955(A) - UBS SECURITIES LLC FAILED TO REPORT TO THE FINRA/NASDAQTRADE REPORTING FACILITY THE CORRECT SYMBOL INDICATINGWHETHER TRANSACTIONS WERE BUY, SELL, SELL SHORT OR CROSS FORTRANSACTIONS IN REPORTABLE SECURITIES. THE FIRM TRANSMITTEDREPORTS TO THE ORDER AUDIT TRAIL SYSTEM (OATS) THAT FAILED TOTRANSMIT, OR INCORRECTLY TRANSMITTED, EXECUTION REPORTS, DESKREPORTS, CANCEL REPORTS OR ROUTE REPORTS. THE FIRM MADEAVAILABLE A REPORT ON THE COVERED ORDERS IN NATIONAL MARKETSYSTEM SECURITIES IT RECEIVED FOR EXECUTION FROM ANY PERSONAND INCORRECTLY CLASSIFIED A NOT HELD ORDER AS COVERED AND INONE INSTANCE, COVERING MARKETABLE LIMIT ORDERS BETWEEN 5,000AND 9,999 SHARES, IT FAILED TO PUBLISH ACCURATE STATISTICS. THEFIRM FAILED TO PROVIDE DOCUMENTARY EVIDENCE OF HOW ITCLASSIFIED AN ORDER. THE FIRM'S SUPERVISORY SYSTEM DID NOTPROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH APPLICABLE SECURITIES LAWS, REGULATIONS ANDNASD RULES CONCERNING ORDER HANDLING, BEST EXECUTION, SALESTRANSACTIONS, ANTI-INTIMIDATION/COORDINATION AND OTHER RULES,INCLUDING THE MAINTENANCE OF APPROPRIATE BOOKS AND RECORDS.THE FIRM FAILED TO PROVIDE DOCUMENTARY EVIDENCE THAT ON ONEDAY IT PERFORMED THE SUPERVISORY REVIEWS SET FORTH IN ITSWRITTEN SUPERVISORY PROCEDURES CONCERNING BEST EXECUTION,TRADE REPORTING, SALES TRANSACTIONS (LONG/SHORTDETERMINATION AND MARKING), TRADING HALTS, OATS (ACCURATE ANDTIMELY OATS SUBMISSIONS AND REPAIRING REJECTED REPORTABLEORDER EVENTS) AND BOOKS AND RECORDS.







Initiated By: FINRA


Censure


FINE AND UNDERTAKING





SEC RULE 605 OF REGULATION NMS, NASD RULES 2110, 3010, 6130(D),6955(A) - UBS SECURITIES LLC FAILED TO REPORT TO THE FINRA/NASDAQTRADE REPORTING FACILITY THE CORRECT SYMBOL INDICATINGWHETHER TRANSACTIONS WERE BUY, SELL, SELL SHORT OR CROSS FORTRANSACTIONS IN REPORTABLE SECURITIES. THE FIRM TRANSMITTEDREPORTS TO THE ORDER AUDIT TRAIL SYSTEM (OATS) THAT FAILED TOTRANSMIT, OR INCORRECTLY TRANSMITTED, EXECUTION REPORTS, DESKREPORTS, CANCEL REPORTS OR ROUTE REPORTS. THE FIRM MADEAVAILABLE A REPORT ON THE COVERED ORDERS IN NATIONAL MARKETSYSTEM SECURITIES IT RECEIVED FOR EXECUTION FROM ANY PERSONAND INCORRECTLY CLASSIFIED A NOT HELD ORDER AS COVERED AND INONE INSTANCE, COVERING MARKETABLE LIMIT ORDERS BETWEEN 5,000AND 9,999 SHARES, IT FAILED TO PUBLISH ACCURATE STATISTICS. THEFIRM FAILED TO PROVIDE DOCUMENTARY EVIDENCE OF HOW ITCLASSIFIED AN ORDER. THE FIRM'S SUPERVISORY SYSTEM DID NOTPROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH APPLICABLE SECURITIES LAWS, REGULATIONS ANDNASD RULES CONCERNING ORDER HANDLING, BEST EXECUTION, SALESTRANSACTIONS, ANTI-INTIMIDATION/COORDINATION AND OTHER RULES,INCLUDING THE MAINTENANCE OF APPROPRIATE BOOKS AND RECORDS.THE FIRM FAILED TO PROVIDE DOCUMENTARY EVIDENCE THAT ON ONEDAY IT PERFORMED THE SUPERVISORY REVIEWS SET FORTH IN ITSWRITTEN SUPERVISORY PROCEDURES CONCERNING BEST EXECUTION,TRADE REPORTING, SALES TRANSACTIONS (LONG/SHORTDETERMINATION AND MARKING), TRADING HALTS, OATS (ACCURATE ANDTIMELY OATS SUBMISSIONS AND REPAIRING REJECTED REPORTABLEORDER EVENTS) AND BOOKS AND RECORDS.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $60,000 AND REQUIRED TOREVISE ITS WRITTEN SUPERVISORY PROCEDURES REGARDING ORDERHANDLING, BEST EXECUTION, SALES TRANSACTIONS, ANTI-INTIMIDATION/COORDINATION OTHER RULES, TRADE REPORTING,TRADING HALTS, OATS (ACCURATE AND TIMELY OATS SUBMISSIONS ANDREPAIRING REJECTED REPORTABLE ORDER EVENTS)AND BOOKS ANDRECORDS WITHIN 30 BUSINESS DAYS OF ACCEPTANCE OF THIS AWC BYTHE NAC.




i
















Allegations: NASDAQ RULE 4755 - UBS SECURITIES LLC ENTERED ORDERS INTO THENASDAQ MARKET CENTER THAT FAILED TO CORRECTLY INDICATEWHETHER THE ORDERS WERE A BUY, SHORT SALE OR LONG SALE.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTION AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS FINED $5,000.


No





Allegations: NASDAQ RULE 4755 - UBS SECURITIES LLC ENTERED ORDERS INTO THENASDAQ MARKET CENTER THAT FAILED TO CORRECTLY INDICATEWHETHER THE ORDERS WERE A BUY, SHORT SALE OR LONG SALE.









Other


FINE $5000






Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTION AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS FINED $5,000.




i







Docket/Case Number: CBOT 07-ETI-88BC AND CBOT 08-00084-MS-BC



Allegations: THE PANEL FOUND THAT, ON APRIL 19, 2007, UBS VIOLATED CBOTREGULATION 9B.13(C) AND ON JANUARY 30, 2008 UBS VIOLATED CBOTRULE 807.


Resolution: Settled 356©2022 FINRA. All rights reserved. Report about UBS SECURITIES LLC






Resolution:


Sanction Details: $10,000 FOR VIOLATING CBOT REGULATION 9B.13(C) AND $10,000FOR VIOLATING CBOT RULE 807.

Firm Statement PLEASE NOTE BOTH FILE NUMBERS ARE REPORTED IN THE SAMEDISCIPLINARY DECISION.


Settled


i


Allegations: NASD RULES 2110 AND 3010: RESPONDENT UBS SECURITIES, LLC ("UBS")FAILED TO ESTABLISH SUPERVISORY PROCEDURES AND SYSTEMSREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NASD RULESREGARDING THE OUTSOURCING OF COMMUNICATIONS WITH ITSCUSTOMERS ABOUT THE SALE OF SECURITIES IN AN IPO. INCONNECTION WITH UNDERWRITING AN IPO, UBS OUTSOURCED THEACTIVITY OF COMMUNICATING WITH ITS CUSTOMERS WHO PARTICIPATEDIN A DIRECTED SHARE PROGRAM TO A THIRD PARTY, WHICH DEVELOPEDA WEBSITE TO ADMINISTER THE PROGRAM. THE THIRD PARTYCOMMUNICATED WITH UBS'S CUSTOMERS THROUGH THE WEBSITE.CERTAIN UBS CUSTOMERS WERE INCORRECTLY INFORMED THAT THEYHAD NOT BEEN ALLOCATED SHARES IN THE IPO. BY THE TIME SOME OFTHE CUSTOMERS LEARNED SEVERAL DAYS LATER THAT THEY IN FACTHAD BEEN ALLOCATED SHARES, THE PRICE OF THE COMPANY STOCKHAD DECLINED SIGNIFICANTLY FROM THE INITIAL IPO PRICE, YET THOSECUSTOMERS PAID THE HIGHER IPO PRICE FOR THE SHARES, AND WHENTHEY LATER SOLD THE SHARES, INCURRED LOSSES. WHEN UBS BECAMEAWARE OF THE INCORRECT INFORMATION PROVIDED TO CUSTOMERS, ITFAILED TO RESPOND ADEQUATELY. THE FIRM WAS UNABLE TO TAKEEFFECTIVE ACTION TO ADDRESS THE PROBLEMS BECAUSE IT FAILED TOTAKE STEPS PRIOR TO THE IPO FOR ADEQUATE ACCESS TO RECORDS ORWORK PRODUCT OF THE THIRD PARTY AND FAILED TO REQUIRE THAT THETHIRD PARTY MAINTAIN SUFFICIENT RECORDS OF ITS COMMUNICATIONSWITH UBS'S CUSTOMERS ABOUT THE IPO AND IPO ALLOCATIONS. UBSHAD WRITTEN PROCEDURES FOR DIRECTED SHARE PROGRAMS ANDWRITTEN SUPERVISORY PROCEDURES FOR OUTSOURCING, BUT DID NOTFOLLOW THESE PROCEDURES IN CONNECTION WITH THE IPO OFFERING.AS A RESULT, UBS DID NOT KNOW WHAT ALLOCATION INFORMATION HADBEEN COMMUNICATED TO ITS CUSTOMERS OR HOW MANY CUSTOMERSMAY HAVE BEEN AFFECTED BY THE PROBLEM. UBS DID NOT KNOW, ANDCOULD NOT PROMPTLY DETERMINE, THE CAUSE OF THE PROBLEM,WHETHER AN ERROR HAD OCCURRED, AND IF SO HOW TO CORRECT THEERROR AND THEREFORE WAS UNABLE TO INVESTIGATE OR REMEDY THEPROBLEM OR RESPOND ADEQUATELY TO CUSTOMER COMPLAINTS. UBSALSO FAILED TO ENSURE THAT FINRA HAD THE SAME ACCESS TO THEWORK OF THE THIRD PARTY FOR UBS THAT FINRA WOULD HAVE HAD IFUBS HAD PERFORMED THE WORK DIRECTLY. IN ADDITION, FINRAREQUESTED THAT UBS PROVIDE CERTAIN INFORMATION ABOUT THEWORKINGS OF THE WEBSITE TO ASSIST IN IDENTIFYING CUSTOMERSWHO MAY HAVE BEEN PROVIDED INCORRECT INFORMATION ABOUTSHARE ALLOCATIONS. HOWEVER, UBS WAS NOT ABLE TO PROVIDE THATINFORMATION OR OBTAIN IT FROM THE THIRD PARTY TO PROVIDE IT TOFINRA WITHOUT A CONFIDENTIALITY AGREEMENT, WHICH WAS NOTACCEPTABLE TO FINRA.







Initiated By: FINRA






Other Product Type(s): COMMON STOCK

NASD RULES 2110 AND 3010: RESPONDENT UBS SECURITIES, LLC ("UBS")FAILED TO ESTABLISH SUPERVISORY PROCEDURES AND SYSTEMSREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NASD RULESREGARDING THE OUTSOURCING OF COMMUNICATIONS WITH ITSCUSTOMERS ABOUT THE SALE OF SECURITIES IN AN IPO. INCONNECTION WITH UNDERWRITING AN IPO, UBS OUTSOURCED THEACTIVITY OF COMMUNICATING WITH ITS CUSTOMERS WHO PARTICIPATEDIN A DIRECTED SHARE PROGRAM TO A THIRD PARTY, WHICH DEVELOPEDA WEBSITE TO ADMINISTER THE PROGRAM. THE THIRD PARTYCOMMUNICATED WITH UBS'S CUSTOMERS THROUGH THE WEBSITE.CERTAIN UBS CUSTOMERS WERE INCORRECTLY INFORMED THAT THEYHAD NOT BEEN ALLOCATED SHARES IN THE IPO. BY THE TIME SOME OFTHE CUSTOMERS LEARNED SEVERAL DAYS LATER THAT THEY IN FACTHAD BEEN ALLOCATED SHARES, THE PRICE OF THE COMPANY STOCKHAD DECLINED SIGNIFICANTLY FROM THE INITIAL IPO PRICE, YET THOSECUSTOMERS PAID THE HIGHER IPO PRICE FOR THE SHARES, AND WHENTHEY LATER SOLD THE SHARES, INCURRED LOSSES. WHEN UBS BECAMEAWARE OF THE INCORRECT INFORMATION PROVIDED TO CUSTOMERS, ITFAILED TO RESPOND ADEQUATELY. THE FIRM WAS UNABLE TO TAKEEFFECTIVE ACTION TO ADDRESS THE PROBLEMS BECAUSE IT FAILED TOTAKE STEPS PRIOR TO THE IPO FOR ADEQUATE ACCESS TO RECORDS ORWORK PRODUCT OF THE THIRD PARTY AND FAILED TO REQUIRE THAT THETHIRD PARTY MAINTAIN SUFFICIENT RECORDS OF ITS COMMUNICATIONSWITH UBS'S CUSTOMERS ABOUT THE IPO AND IPO ALLOCATIONS. UBSHAD WRITTEN PROCEDURES FOR DIRECTED SHARE PROGRAMS ANDWRITTEN SUPERVISORY PROCEDURES FOR OUTSOURCING, BUT DID NOTFOLLOW THESE PROCEDURES IN CONNECTION WITH THE IPO OFFERING.AS A RESULT, UBS DID NOT KNOW WHAT ALLOCATION INFORMATION HADBEEN COMMUNICATED TO ITS CUSTOMERS OR HOW MANY CUSTOMERSMAY HAVE BEEN AFFECTED BY THE PROBLEM. UBS DID NOT KNOW, ANDCOULD NOT PROMPTLY DETERMINE, THE CAUSE OF THE PROBLEM,WHETHER AN ERROR HAD OCCURRED, AND IF SO HOW TO CORRECT THEERROR AND THEREFORE WAS UNABLE TO INVESTIGATE OR REMEDY THEPROBLEM OR RESPOND ADEQUATELY TO CUSTOMER COMPLAINTS. UBSALSO FAILED TO ENSURE THAT FINRA HAD THE SAME ACCESS TO THEWORK OF THE THIRD PARTY FOR UBS THAT FINRA WOULD HAVE HAD IFUBS HAD PERFORMED THE WORK DIRECTLY. IN ADDITION, FINRAREQUESTED THAT UBS PROVIDE CERTAIN INFORMATION ABOUT THEWORKINGS OF THE WEBSITE TO ASSIST IN IDENTIFYING CUSTOMERSWHO MAY HAVE BEEN PROVIDED INCORRECT INFORMATION ABOUTSHARE ALLOCATIONS. HOWEVER, UBS WAS NOT ABLE TO PROVIDE THATINFORMATION OR OBTAIN IT FROM THE THIRD PARTY TO PROVIDE IT TOFINRA WITHOUT A CONFIDENTIALITY AGREEMENT, WHICH WAS NOTACCEPTABLE TO FINRA.


Resolution:

Other Sanctions Ordered: CERTIFICATION

Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $150,000 AND SHALL PAYRESTITUTION, IN THE AMOUNT OF NO MORE THAN APPROXIMATELY$118,000 TO NO MORE THAN APPROXIMATELY 126 CUSTOMERS, TOCOMPENSATE THEM AS A RESULT OF HAVING BEEN INCORRECTLY TOLDTHAT THEY DID NOT RECEIVE AN ALLOCATION OF SHARES IN THE IPO.


No









Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $150,000 AND SHALL PAYRESTITUTION, IN THE AMOUNT OF NO MORE THAN APPROXIMATELY$118,000 TO NO MORE THAN APPROXIMATELY 126 CUSTOMERS, TOCOMPENSATE THEM AS A RESULT OF HAVING BEEN INCORRECTLY TOLDTHAT THEY DID NOT RECEIVE AN ALLOCATION OF SHARES IN THE IPO.

Regulator Statement UBS SHALL MAKE RESTITUTION PAYMENTS TO UBS CUSTOMERS, ASIDENTIFIED BY FINRA, WHO RECEIVED AN ALLOCATION OF SHARES IN THEIPO BUT WERE INCORRECTLY TOLD ON THE WEBSITE THAT THEY HADNOT RECEIVED SUCH AN ALLOCATION, PROVIDED THAT THE CUSTOMERSDID NOT OTHERWISE LEARN THEY HAD BEEN ALLOCATED SHARES IN THEIPO PRIOR TO THE BEGINNING OF TRADING ON MAY 24, 2006. NOPAYMENTS SHALL BE MADE TO CUSTOMERS WHO DID NOT PAY FOR THEIRSHARES AND ARE NOT THE SUBJECT OF COLLECTION EFFORTS. UBSSHALL MAKE THE PAYMENTS TO CUSTOMERS IN ACCORDANCE WITH THEFOLLOWING PROCEDURES: (I) FINRA WILL PROVIDE A LIST OF ELIGIBLECUSTOMERS TO UBS WITHIN 30 DAYS OF THE ISSUANCE OF THIS AWC.WITHIN 30 DAYS OF RECEIPT OF THAT LIST, UBS SHALL PROVIDE FINRAWITH A PROPOSED WRITTEN NOTIFICATION AND CERTIFICATION("NOTICE") TO BE SENT TO THESE CUSTOMERS. WITHIN 30 DAYS AFTER ITRECEIVES APPROVAL OF THE NOTICE BY FINRA, UBS SHALL SEND THENOTICE TO ALL IDENTIFIED CUSTOMERS. THE WRITTEN NOTIFICATIONAND PROPOSED CERTIFICATION SHALL BE APPROVED, PRIOR TOSENDING, BY FINRA. (II) THE NOTICE SHALL BE SENT TO EACH ELIGIBLECUSTOMER AT THE ADDRESS(ES) THAT THE ELIGIBLE CUSTOMER USEDFOR THE LIMITED-PURPOSE BROKERAGE ACCOUNT OPENED AT UBS FORTHE DIRECTED SHARE PROGRAM, UNLESS UBS HAS KNOWLEDGE OF AMORE RECENT ADDRESS(ES) FOR THE CUSTOMER, IN WHICH CASE UBSSHALL SEND THE WRITTEN NOTIFICATION AND CERTIFICATION TO BOTHTHE MORE RECENT ADDRESS(ES) AND THE ADDRESS(ES) USED FOR THELIMITED-PURPOSE BROKERAGE ACCOUNT. THE NOTIFICATION SHALLREQUEST A WRITTEN RESPONSE WITHIN 60 DAYS. (III) WITHIN 60 DAYSAFTER EXPIRATION OF THE 60-DAY RESPONSE PERIOD, UBS SHALL MAKEPAYMENTS TO THE CUSTOMERS, IN AMOUNTS AS DIRECTED BY FINRA.THE AMOUNTS PAID SHALL BE THE DIFFERENCE BETWEEN (1) $17 PERSHARE, AND (2) THE PRICE OF THE STOCK AT THE NEXT OPENING ORCLOSING OF THE MARKET AFTER EACH CUSTOMER LEARNED FROM THEWEBSITE OF THE ALLOCATION OF IPO SHARES TO THAT CUSTOMER,MULTIPLIED BY THE NUMBER OF SHARES ALLOCATED TO EACH SUCHCUSTOMER, EXCEPT THAT, FOR CUSTOMERS WHO DID NOT LOG BACK INTHE WEBSITE PRIOR TO 11:59 PM ON MAY 25, 2006, THE PRICE OF STOCKAT THE OPENING OF TRADING THE FOLLOWING DAY SHALL BE USED. (IV)WITHIN 60 DAYS OF THE COMPLETION OF THE RESTITUTION PAYMENTSREQUIRED BY THIS AWC, UBS SHALL CERTIFY TO FINRA THAT THEPAYMENTS HAVE BEEN MADE AND SHALL PROVIDE FINRA WITH COPIESOF CHECKS OR OTHER DOCUMENTS EVIDENCING SUCH PAYMENTS. UBSSHALL ALSO PROVIDE, AT THE SAME TIME, A SCHEDULE LISTING ALLCUSTOMERS UBS PAID PURSUANT TO THIS AWC, STATING THE NAMES OFEACH CUSTOMER AND THE AMOUNTS PAID TO EACH CUSTOMER. (V) UBSAGREES TO INDEMNIFY CUSTOMERS WHO MEET THE CRITERIA SETFORTH IN ABOVE BUT HAVE NOT, AS OF THE DATE OF ISSUANCE OF THISAWC, PAID FOR THE SHARES ALLOCATED TO THEM AGAINST FUTURECOLLECTION EFFORTS BY THE DIRECTED SHARE PROGRAM, ITSAFFILIATES, AGENTS, OR ASSIGNEES, FOR THE FAILURE TO PAY FORSHARES ALLOCATED TO THE CUSTOMER AS PART OF THE DIRECTEDSHARE PROGRAM, IN A FORM APPROVED BY FINRA. WITHIN 150 DAYS OFISSUANCE OF THIS AWC, A SENIOR OFFICER OF UBS SHALL CERTIFY TOFINRA THAT UBS HAS POLICIES AND PROCEDURES IN PLACE RELATING TOOUTSOURCING IN CONNECTION WITH PUBLIC OFFERINGS OF COMMONSTOCK THAT ARE REASONABLY DESIGNED TO ACHIEVE COMPLIANCEWITH FINRA RULES. AT THE TIME UBS PROVIDES THIS CERTIFICATION,UBS SHALL PROVIDE A WRITTEN DESCRIPTION OF THE POLICIES ANDPROCEDURES THAT ARE THE SUBJECT OF THE CERTIFICATION.






UBS SHALL MAKE RESTITUTION PAYMENTS TO UBS CUSTOMERS, ASIDENTIFIED BY FINRA, WHO RECEIVED AN ALLOCATION OF SHARES IN THEIPO BUT WERE INCORRECTLY TOLD ON THE WEBSITE THAT THEY HADNOT RECEIVED SUCH AN ALLOCATION, PROVIDED THAT THE CUSTOMERSDID NOT OTHERWISE LEARN THEY HAD BEEN ALLOCATED SHARES IN THEIPO PRIOR TO THE BEGINNING OF TRADING ON MAY 24, 2006. NOPAYMENTS SHALL BE MADE TO CUSTOMERS WHO DID NOT PAY FOR THEIRSHARES AND ARE NOT THE SUBJECT OF COLLECTION EFFORTS. UBSSHALL MAKE THE PAYMENTS TO CUSTOMERS IN ACCORDANCE WITH THEFOLLOWING PROCEDURES: (I) FINRA WILL PROVIDE A LIST OF ELIGIBLECUSTOMERS TO UBS WITHIN 30 DAYS OF THE ISSUANCE OF THIS AWC.WITHIN 30 DAYS OF RECEIPT OF THAT LIST, UBS SHALL PROVIDE FINRAWITH A PROPOSED WRITTEN NOTIFICATION AND CERTIFICATION("NOTICE") TO BE SENT TO THESE CUSTOMERS. WITHIN 30 DAYS AFTER ITRECEIVES APPROVAL OF THE NOTICE BY FINRA, UBS SHALL SEND THENOTICE TO ALL IDENTIFIED CUSTOMERS. THE WRITTEN NOTIFICATIONAND PROPOSED CERTIFICATION SHALL BE APPROVED, PRIOR TOSENDING, BY FINRA. (II) THE NOTICE SHALL BE SENT TO EACH ELIGIBLECUSTOMER AT THE ADDRESS(ES) THAT THE ELIGIBLE CUSTOMER USEDFOR THE LIMITED-PURPOSE BROKERAGE ACCOUNT OPENED AT UBS FORTHE DIRECTED SHARE PROGRAM, UNLESS UBS HAS KNOWLEDGE OF AMORE RECENT ADDRESS(ES) FOR THE CUSTOMER, IN WHICH CASE UBSSHALL SEND THE WRITTEN NOTIFICATION AND CERTIFICATION TO BOTHTHE MORE RECENT ADDRESS(ES) AND THE ADDRESS(ES) USED FOR THELIMITED-PURPOSE BROKERAGE ACCOUNT. THE NOTIFICATION SHALLREQUEST A WRITTEN RESPONSE WITHIN 60 DAYS. (III) WITHIN 60 DAYSAFTER EXPIRATION OF THE 60-DAY RESPONSE PERIOD, UBS SHALL MAKEPAYMENTS TO THE CUSTOMERS, IN AMOUNTS AS DIRECTED BY FINRA.THE AMOUNTS PAID SHALL BE THE DIFFERENCE BETWEEN (1) $17 PERSHARE, AND (2) THE PRICE OF THE STOCK AT THE NEXT OPENING ORCLOSING OF THE MARKET AFTER EACH CUSTOMER LEARNED FROM THEWEBSITE OF THE ALLOCATION OF IPO SHARES TO THAT CUSTOMER,MULTIPLIED BY THE NUMBER OF SHARES ALLOCATED TO EACH SUCHCUSTOMER, EXCEPT THAT, FOR CUSTOMERS WHO DID NOT LOG BACK INTHE WEBSITE PRIOR TO 11:59 PM ON MAY 25, 2006, THE PRICE OF STOCKAT THE OPENING OF TRADING THE FOLLOWING DAY SHALL BE USED. (IV)WITHIN 60 DAYS OF THE COMPLETION OF THE RESTITUTION PAYMENTSREQUIRED BY THIS AWC, UBS SHALL CERTIFY TO FINRA THAT THEPAYMENTS HAVE BEEN MADE AND SHALL PROVIDE FINRA WITH COPIESOF CHECKS OR OTHER DOCUMENTS EVIDENCING SUCH PAYMENTS. UBSSHALL ALSO PROVIDE, AT THE SAME TIME, A SCHEDULE LISTING ALLCUSTOMERS UBS PAID PURSUANT TO THIS AWC, STATING THE NAMES OFEACH CUSTOMER AND THE AMOUNTS PAID TO EACH CUSTOMER. (V) UBSAGREES TO INDEMNIFY CUSTOMERS WHO MEET THE CRITERIA SETFORTH IN ABOVE BUT HAVE NOT, AS OF THE DATE OF ISSUANCE OF THISAWC, PAID FOR THE SHARES ALLOCATED TO THEM AGAINST FUTURECOLLECTION EFFORTS BY THE DIRECTED SHARE PROGRAM, ITSAFFILIATES, AGENTS, OR ASSIGNEES, FOR THE FAILURE TO PAY FORSHARES ALLOCATED TO THE CUSTOMER AS PART OF THE DIRECTEDSHARE PROGRAM, IN A FORM APPROVED BY FINRA. WITHIN 150 DAYS OFISSUANCE OF THIS AWC, A SENIOR OFFICER OF UBS SHALL CERTIFY TOFINRA THAT UBS HAS POLICIES AND PROCEDURES IN PLACE RELATING TOOUTSOURCING IN CONNECTION WITH PUBLIC OFFERINGS OF COMMONSTOCK THAT ARE REASONABLY DESIGNED TO ACHIEVE COMPLIANCEWITH FINRA RULES. AT THE TIME UBS PROVIDES THIS CERTIFICATION,UBS SHALL PROVIDE A WRITTEN DESCRIPTION OF THE POLICIES ANDPROCEDURES THAT ARE THE SUBJECT OF THE CERTIFICATION.


Allegations: NASD RULES 2110 AND 3010: RESPONDENT UBS SECURITIES, LLC ("UBS")FAILED TO ESTABLISH SUPERVISORY PROCEDURES AND SYSTEMSREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NASD RULESREGARDING THE OUTSOURCING OF COMMUNICATIONS WITH ITSCUSTOMERS ABOUT THE SALE OF SECURITIES IN AN IPO. IN CONNECTIONWITH UNDERWRITING AN IPO, UBS OUTSOURCED THE ACTIVITY OFCOMMUNICATING WITH ITS CUSTOMERS WHO PARTICIPATED IN ADIRECTED SHARE PROGRAM TO A THIRD PARTY, WHICH DEVELOPED AWEBSITE TO ADMINISTER THE PROGRAM. THE THIRD PARTYCOMMUNICATED WITH UBS'S CUSTOMERS THROUGH THE WEBSITE.CERTAIN UBS CUSTOMERS WERE INCORRECTLY INFORMED THAT THEYHAD NOT BEEN ALLOCATED SHARES IN THE IPO. BY THE TIME SOME OFTHE CUSTOMERS LEARNED SEVERAL DAYS LATER THAT THEY IN FACTHAD BEEN ALLOCATED SHARES, THE PRICE OF THE COMPANY STOCKHAD DECLINED SIGNIFICANTLY FROM THE INITIAL IPO PRICE, YET THOSECUSTOMERS PAID THE HIGHER IPO PRICE FOR THE SHARES, AND WHENTHEY LATER SOLD THE SHARES, INCURRED LOSSES. WHEN UBS BECAMEAWARE OF THE INCORRECT INFORMATION PROVIDED TO CUSTOMERS, ITFAILED TO RESPOND ADEQUATELY. THE FIRM WAS UNABLE TO TAKEEFFECTIVE ACTION TO ADDRESS THE PROBLEMS BECAUSE IT FAILED TOTAKE STEPS PRIOR TO THE IPO FOR ADEQUATE ACCESS TO RECORDS ORWORK PRODUCT OF THE THIRD PARTY AND FAILED TO REQUIRE THAT THETHIRD PARTY MAINTAIN SUFFICIENT RECORDS OF ITS COMMUNICATIONSWITH UBS'S CUSTOMERS ABOUT THE IPO AND IPO ALLOCATIONS. UBSHAD WRITTEN PROCEDURES FOR DIRECTED SHARE PROGRAMS ANDWRITTEN SUPERVISORY PROCEDURES FOR OUTSOURCING, BUT DID NOTFOLLOW THESE PROCEDURES IN CONNECTION WITH THE IPO OFFERING.AS A RESULT, UBS DID NOT KNOW WHAT ALLOCATION INFORMATION HADBEEN COMMUNICATED TO ITS CUSTOMERS OR HOW MANY CUSTOMERSMAY HAVE BEEN AFFECTED BY THE PROBLEM. UBS DID NOT KNOW, ANDCOULD NOT PROMPTLY DETERMINE, THE CAUSE OF THE PROBLEM,WHETHER AN ERROR HAD OCCURRED, AND IF SO HOW TO CORRECT THEERROR AND THEREFORE WAS UNABLE TO INVESTIGATE OR REMEDY THEPROBLEM OR RESPOND ADEQUATELY TO CUSTOMER COMPLAINTS. UBSALSO FAILED TO ENSURE THAT FINRA HAD THE SAME ACCESS TO THEWORK OF THE THIRD PARTY FOR UBS THAT FINRA WOULD HAVE HAD IFUBS HAD PERFORMED THE WORK DIRECTLY. IN ADDITION, FINRAREQUESTED THAT UBS PROVIDE CERTAIN INFORMATION ABOUT THEWORKINGS OF THE WEBSITE TO ASSIST IN IDENTIFYING CUSTOMERSWHO MAY HAVE BEEN PROVIDED INCORRECT INFORMATION ABOUTSHARE ALLOCATIONS. HOWEVER, UBS WAS NOT ABLE TO PROVIDE THATINFORMATION OR OBTAIN IT FROM THE THIRD PARTY TO PROVIDE IT TOFINRA WITHOUT A CONFIDENTIALITY AGREEMENT, WHICH WAS NOTACCEPTABLE TO FINRA.







Initiated By: FINRA


Censure


DISGORGEMENT/RESTITUTION MONETARY FINE $150,000.00





NASD RULES 2110 AND 3010: RESPONDENT UBS SECURITIES, LLC ("UBS")FAILED TO ESTABLISH SUPERVISORY PROCEDURES AND SYSTEMSREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NASD RULESREGARDING THE OUTSOURCING OF COMMUNICATIONS WITH ITSCUSTOMERS ABOUT THE SALE OF SECURITIES IN AN IPO. IN CONNECTIONWITH UNDERWRITING AN IPO, UBS OUTSOURCED THE ACTIVITY OFCOMMUNICATING WITH ITS CUSTOMERS WHO PARTICIPATED IN ADIRECTED SHARE PROGRAM TO A THIRD PARTY, WHICH DEVELOPED AWEBSITE TO ADMINISTER THE PROGRAM. THE THIRD PARTYCOMMUNICATED WITH UBS'S CUSTOMERS THROUGH THE WEBSITE.CERTAIN UBS CUSTOMERS WERE INCORRECTLY INFORMED THAT THEYHAD NOT BEEN ALLOCATED SHARES IN THE IPO. BY THE TIME SOME OFTHE CUSTOMERS LEARNED SEVERAL DAYS LATER THAT THEY IN FACTHAD BEEN ALLOCATED SHARES, THE PRICE OF THE COMPANY STOCKHAD DECLINED SIGNIFICANTLY FROM THE INITIAL IPO PRICE, YET THOSECUSTOMERS PAID THE HIGHER IPO PRICE FOR THE SHARES, AND WHENTHEY LATER SOLD THE SHARES, INCURRED LOSSES. WHEN UBS BECAMEAWARE OF THE INCORRECT INFORMATION PROVIDED TO CUSTOMERS, ITFAILED TO RESPOND ADEQUATELY. THE FIRM WAS UNABLE TO TAKEEFFECTIVE ACTION TO ADDRESS THE PROBLEMS BECAUSE IT FAILED TOTAKE STEPS PRIOR TO THE IPO FOR ADEQUATE ACCESS TO RECORDS ORWORK PRODUCT OF THE THIRD PARTY AND FAILED TO REQUIRE THAT THETHIRD PARTY MAINTAIN SUFFICIENT RECORDS OF ITS COMMUNICATIONSWITH UBS'S CUSTOMERS ABOUT THE IPO AND IPO ALLOCATIONS. UBSHAD WRITTEN PROCEDURES FOR DIRECTED SHARE PROGRAMS ANDWRITTEN SUPERVISORY PROCEDURES FOR OUTSOURCING, BUT DID NOTFOLLOW THESE PROCEDURES IN CONNECTION WITH THE IPO OFFERING.AS A RESULT, UBS DID NOT KNOW WHAT ALLOCATION INFORMATION HADBEEN COMMUNICATED TO ITS CUSTOMERS OR HOW MANY CUSTOMERSMAY HAVE BEEN AFFECTED BY THE PROBLEM. UBS DID NOT KNOW, ANDCOULD NOT PROMPTLY DETERMINE, THE CAUSE OF THE PROBLEM,WHETHER AN ERROR HAD OCCURRED, AND IF SO HOW TO CORRECT THEERROR AND THEREFORE WAS UNABLE TO INVESTIGATE OR REMEDY THEPROBLEM OR RESPOND ADEQUATELY TO CUSTOMER COMPLAINTS. UBSALSO FAILED TO ENSURE THAT FINRA HAD THE SAME ACCESS TO THEWORK OF THE THIRD PARTY FOR UBS THAT FINRA WOULD HAVE HAD IFUBS HAD PERFORMED THE WORK DIRECTLY. IN ADDITION, FINRAREQUESTED THAT UBS PROVIDE CERTAIN INFORMATION ABOUT THEWORKINGS OF THE WEBSITE TO ASSIST IN IDENTIFYING CUSTOMERSWHO MAY HAVE BEEN PROVIDED INCORRECT INFORMATION ABOUTSHARE ALLOCATIONS. HOWEVER, UBS WAS NOT ABLE TO PROVIDE THATINFORMATION OR OBTAIN IT FROM THE THIRD PARTY TO PROVIDE IT TOFINRA WITHOUT A CONFIDENTIALITY AGREEMENT, WHICH WAS NOTACCEPTABLE TO FINRA.


Resolution:


Sanction Details: UBS WILL PAY RESTITUTION IN AN AMOUNT OF NO MORE THANAPPROXIMATELY $118, 000.00 TO NO MORE THAN APPROXIMATELY 126CUSTOMERS.









Sanction Details: UBS WILL PAY RESTITUTION IN AN AMOUNT OF NO MORE THANAPPROXIMATELY $118, 000.00 TO NO MORE THAN APPROXIMATELY 126CUSTOMERS.


i


Allegations: SEC RULES 17A-3, 17A-4, 605 OF REGULATION NMS, NASD RULES 2110,3010, 3110, 6130, 6955(A) - UBS SECURITIES LLC TRANSMITTED TO THEORDER AUDIT TRAIL SYSTEM (OATS) NUMEROUS REPORTS THATCONTAINED INACCURATE, INCOMPLETE OR IMPROPERLY FORMATTEDDATA; IT INCORRECTLY SUBMITTED EXECUTION REPORTS IT SHOULD NOTHAVE SUBMITTED; OATS WAS UNABLE TO MATCH NUMEROUS FIRM NEWORDER REPORTS TO A ROUTE REPORT SUBMITTED BY ANOTHER FIRMFOR WHICH THE FIRM WAS NAMED AS THE SENT TO FIRM. THE FIRMTRANSMITTED TO OATS NUMEROUS ROUTE OR COMBINED ORDER/ROUTEREPORTS THAT THE OATS SYSTEM WAS UNABLE TO LINK TO THERELATED ORDER ROUTED TO NASDAQ DUE TO INACCURATE,INCOMPLETE OR IMPROPERLY FORMATTED DATA. THE FIRMTRANSMITTED TO OATS NUMEROUS NEW ORDER REPORTS AND RELATEDSUBSEQUENT REPORTS WHERE THE TIMESTAMP FOR THE RELATEDSUBSEQUENT REPORT OCCURRED PRIOR TO THE RECEIPT OF THEORDER AND THE OATS SYSTEM WAS UNABLE TO CREATE AN ACCURATE,TIME-SEQUENCED RECORD FROM THE RECEIPT OF THE ORDERTHROUGH ITS RESOLUTION. THE FIRM TRANSMITTED TO OATSREPORTABLE ORDER EVENTS (ROES) THAT WERE REJECTED BY OATSFOR CONTEXT OR SYNTAX ERRORS AND FAILED TO REPAIR MOST OFTHEM. THE FIRM FAILED TO REPORT TO OATS A ROUTE REPORT FOROATS REPORTABLE ORDERS. THE FIRM TRANSMITTED TO OATSNUMEROUS ROUTE OR COMBINED ORDER/ROUTE REPORTS THAT THEOATS SYSTEM WAS UNABLE TO LINK TO THE CORRESPONDING NEWORDER TRANSMITTED BY THE DESTINATION MEMBER FIRM DUE TOINACCURATE, INCOMPLETE OR IMPROPERLY FORMATTED DATA. THE FIRMFAILED TO ENFORCE ITS WRITTEN SUPERVISORY PROCEDURESRELATING TO OATS COMPLIANCE. THE FIRM FAILED TO REPORT TO THEFINRA/NASDAQ TRADE REPORTING FACILITY (TRF) THE CORRECTSYMBOL INDICATING WHETHER IT EXECUTED TRANSACTIONS INREPORTABLE SECURITIES IN A PRINCIPAL OR AGENCY CAPACITY. THEFIRM TRANSMITTED TO OATS REPORTS THAT CONTAINED INACCURATE,INCOMPLETE OR IMPROPERLY FORMATTED DATA; THE FIRM FAILED TOSUBMIT AN EXECUTION REPORT TO OATS; REPORTED INCORRECTCAPACITY INDICATORS; IMPROPERLY SUBMITTED NEW ORDER REPORTS;AND FAILED TO SUBMIT A ROUTE REPORT TO OATS. THE FIRM MADEAVAILABLE A REPORT ON THE COVERED ORDERS IN NATIONAL MARKETSYSTEM SECURITIES IT RECEIVED FOR EXECUTION FROM ANY PERSONTHAT INCLUDED INCORRECT ORDER EXECUTION INFORMATION.[CONTINUED IN COMMENTS]







Initiated By: FINRA







SEC RULES 17A-3, 17A-4, 605 OF REGULATION NMS, NASD RULES 2110,3010, 3110, 6130, 6955(A) - UBS SECURITIES LLC TRANSMITTED TO THEORDER AUDIT TRAIL SYSTEM (OATS) NUMEROUS REPORTS THATCONTAINED INACCURATE, INCOMPLETE OR IMPROPERLY FORMATTEDDATA; IT INCORRECTLY SUBMITTED EXECUTION REPORTS IT SHOULD NOTHAVE SUBMITTED; OATS WAS UNABLE TO MATCH NUMEROUS FIRM NEWORDER REPORTS TO A ROUTE REPORT SUBMITTED BY ANOTHER FIRMFOR WHICH THE FIRM WAS NAMED AS THE SENT TO FIRM. THE FIRMTRANSMITTED TO OATS NUMEROUS ROUTE OR COMBINED ORDER/ROUTEREPORTS THAT THE OATS SYSTEM WAS UNABLE TO LINK TO THERELATED ORDER ROUTED TO NASDAQ DUE TO INACCURATE,INCOMPLETE OR IMPROPERLY FORMATTED DATA. THE FIRMTRANSMITTED TO OATS NUMEROUS NEW ORDER REPORTS AND RELATEDSUBSEQUENT REPORTS WHERE THE TIMESTAMP FOR THE RELATEDSUBSEQUENT REPORT OCCURRED PRIOR TO THE RECEIPT OF THEORDER AND THE OATS SYSTEM WAS UNABLE TO CREATE AN ACCURATE,TIME-SEQUENCED RECORD FROM THE RECEIPT OF THE ORDERTHROUGH ITS RESOLUTION. THE FIRM TRANSMITTED TO OATSREPORTABLE ORDER EVENTS (ROES) THAT WERE REJECTED BY OATSFOR CONTEXT OR SYNTAX ERRORS AND FAILED TO REPAIR MOST OFTHEM. THE FIRM FAILED TO REPORT TO OATS A ROUTE REPORT FOROATS REPORTABLE ORDERS. THE FIRM TRANSMITTED TO OATSNUMEROUS ROUTE OR COMBINED ORDER/ROUTE REPORTS THAT THEOATS SYSTEM WAS UNABLE TO LINK TO THE CORRESPONDING NEWORDER TRANSMITTED BY THE DESTINATION MEMBER FIRM DUE TOINACCURATE, INCOMPLETE OR IMPROPERLY FORMATTED DATA. THE FIRMFAILED TO ENFORCE ITS WRITTEN SUPERVISORY PROCEDURESRELATING TO OATS COMPLIANCE. THE FIRM FAILED TO REPORT TO THEFINRA/NASDAQ TRADE REPORTING FACILITY (TRF) THE CORRECTSYMBOL INDICATING WHETHER IT EXECUTED TRANSACTIONS INREPORTABLE SECURITIES IN A PRINCIPAL OR AGENCY CAPACITY. THEFIRM TRANSMITTED TO OATS REPORTS THAT CONTAINED INACCURATE,INCOMPLETE OR IMPROPERLY FORMATTED DATA; THE FIRM FAILED TOSUBMIT AN EXECUTION REPORT TO OATS; REPORTED INCORRECTCAPACITY INDICATORS; IMPROPERLY SUBMITTED NEW ORDER REPORTS;AND FAILED TO SUBMIT A ROUTE REPORT TO OATS. THE FIRM MADEAVAILABLE A REPORT ON THE COVERED ORDERS IN NATIONAL MARKETSYSTEM SECURITIES IT RECEIVED FOR EXECUTION FROM ANY PERSONTHAT INCLUDED INCORRECT ORDER EXECUTION INFORMATION.[CONTINUED IN COMMENTS]


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $320,000 AND REQUIRED TOREVISE ITS WRITTEN SUPERVISORY PROCEDURES REGARDING OATSCOMPLIANCE, ORDER HANDLING, SALES TRANSACTIONS, SOFT DOLLARACCOUNTS AND TRADING, THE FIRM'S USE OF MULTIPLE MARKETPARTICIPANT IDENTIFIERS (MPIDS), PREVENTING ANTI-INTIMIDATION/COORDINATION, OTHER QUOTING AND TRADING RULESINCLUDING THE MAINTENANCE OF APPROPRIATE BOOKS AND RECORDSWITHIN 30 BUSINESS DAYS OF ACCEPTANCE OF THE AWC BY THE NAC.

Regulator Statement ALLEGATIONS CONTINUED: THE FIRM FAILED TO SHOW THE CORRECTCAPACITY ON BROKERAGE ORDER MEMORANDA; FAILED TO PRODUCECUSTOMER SALES ACTIVITY BLOTTERS, PROPRIETARY SALES ACTIVITYBLOTTERS AND REQUIRED ORDER TICKETS AND MEMORANDA ADEQUATEFOR FINRA TO COMPLETE ITS REVIEW OF THE FIRM'S COMPLIANCE WITHSEC RULE 605. THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHAPPLICABLE SECURITIES LAWS, REGULATIONS AND NASD RULESCONCERNING ORDER HANDLING, SALES TRANSACTIONS, SOFT DOLLARACCOUNTS AND TRADING, THE FIRM'S USE OF MULTIPLE MARKETPARTICIPANT IDENTIFIERS (MPIDS), PREVENTING ANTI-INTIMIDATION/COORDINATION, OTHER QUOTING AND TRADING RULESINCLUDING THE MAINTENANCE OF APPROPRIATE BOOKS AND RECORDS.


No








www.finra.org/brokercheck User GuidanceALLEGATIONS CONTINUED: THE FIRM FAILED TO SHOW THE CORRECTCAPACITY ON BROKERAGE ORDER MEMORANDA; FAILED TO PRODUCECUSTOMER SALES ACTIVITY BLOTTERS, PROPRIETARY SALES ACTIVITYBLOTTERS AND REQUIRED ORDER TICKETS AND MEMORANDA ADEQUATEFOR FINRA TO COMPLETE ITS REVIEW OF THE FIRM'S COMPLIANCE WITHSEC RULE 605. THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHAPPLICABLE SECURITIES LAWS, REGULATIONS AND NASD RULESCONCERNING ORDER HANDLING, SALES TRANSACTIONS, SOFT DOLLARACCOUNTS AND TRADING, THE FIRM'S USE OF MULTIPLE MARKETPARTICIPANT IDENTIFIERS (MPIDS), PREVENTING ANTI-INTIMIDATION/COORDINATION, OTHER QUOTING AND TRADING RULESINCLUDING THE MAINTENANCE OF APPROPRIATE BOOKS AND RECORDS.


Allegations: SEC RULES 17A-3, 17A-4, 605 OF REGULATION NMS, NASD RULES 2110,3010, 3110, 6130, 6955(A) - UBS SECURITIES LLC TRANSMITTED TO THEORDER AUDIT TRAIL SYSTEM (OATS) NUMEROUS REPORTS THATCONTAINED INACCURATE, INCOMPLETE OR IMPROPERLY FORMATTEDDATA; IT INCORRECTLY SUBMITTED EXECUTION REPORTS IT SHOULD NOTHAVE SUBMITTED; OATS WAS UNABLE TO MATCH NUMEROUS FIRM NEWORDER REPORTS TO A ROUTE REPORT SUBMITTED BY ANOTHER FIRMFOR WHICH THE FIRM WAS NAMED AS THE SENT TO FIRM. THE FIRMTRANSMITTED TO OATS NUMEROUS ROUTE OR COMBINED ORDER/ROUTEREPORTS THAT THE OATS SYSTEM WAS UNABLE TO LINK TO THERELATED ORDER ROUTED TO NASDAQ DUE TO INACCURATE,INCOMPLETE OR IMPROPERLY FORMATTED DATA. THE FIRMTRANSMITTED TO OATS NUMEROUS NEW ORDER REPORTS AND RELATEDSUBSEQUENT REPORTS WHERE THE TIMESTAMP FOR THE RELATEDSUBSEQUENT REPORT OCCURRED PRIOR TO THE RECEIPT OF THEORDER AND THE OATS SYSTEM WAS UNABLE TO CREATE AN ACCURATE,TIME-SEQUENCED RECORD FROM THE RECEIPT OF THE ORDERTHROUGH ITS RESOLUTION. THE FIRM TRANSMITTED TO OATSREPORTABLE ORDER EVENTS (ROES) THAT WERE REJECTED BY OATSFOR CONTEXT OR SYNTAX ERRORS AND FAILED TO REPAIR MOST OFTHEM. THE FIRM FAILED TO REPORT TO OATS A ROUTE REPORT FOROATS REPORTABLE ORDERS. THE FIRM TRANSMITTED TO OATSNUMEROUS ROUTE OR COMBINED ORDER/ROUTE REPORTS THAT THEOATS SYSTEM WAS UNABLE TO LINK TO THE CORRESPONDING NEWORDER TRANSMITTED BY THE DESTINATION MEMBER FIRM DUE TOINACCURATE, INCOMPLETE OR IMPROPERLY FORMATTED DATA. THE FIRMFAILED TO ENFORCE ITS WRITTEN SUPERVISORY PROCEDURESRELATING TO OATS COMPLIANCE. THE FIRM FAILED TO REPORT TO THEFINRA/NASDAQ TRADE REPORTING FACILITY (TRF) THE CORRECTSYMBOL INDICATING WHETHER IT EXECUTED TRANSACTIONS INREPORTABLE SECURITIES IN A PRINCIPAL OR AGENCY CAPACITY. THEFIRM TRANSMITTED TO OATS REPORTS THAT CONTAINED INACCURATE,INCOMPLETE OR IMPROPERLY FORMATTED DATA; THE FIRM FAILED TOSUBMIT AN EXECUTION REPORT TO OATS; REPORTED INCORRECTCAPACITY INDICATORS; IMPROPERLY SUBMITTED NEW ORDER REPORTS;AND FAILED TO SUBMIT A ROUTE REPORT TO OATS. THE FIRM MADEAVAILABLE A REPORT ON THE COVERED ORDERS IN NATIONAL MARKETSYSTEM SECURITIES IT RECEIVED FOR EXECUTION FROM ANY PERSONTHAT INCLUDED INCORRECT ORDER EXECUTION INFORMATION.[CONTINUED IN COMMENTS]







Initiated By: FINRA


Other


$320,000 FINE, CENSURE AND AN UNDERTAKING TO REVISE CERTAINWRITTEN SUPERVISORY PROCEDURES





SEC RULES 17A-3, 17A-4, 605 OF REGULATION NMS, NASD RULES 2110,3010, 3110, 6130, 6955(A) - UBS SECURITIES LLC TRANSMITTED TO THEORDER AUDIT TRAIL SYSTEM (OATS) NUMEROUS REPORTS THATCONTAINED INACCURATE, INCOMPLETE OR IMPROPERLY FORMATTEDDATA; IT INCORRECTLY SUBMITTED EXECUTION REPORTS IT SHOULD NOTHAVE SUBMITTED; OATS WAS UNABLE TO MATCH NUMEROUS FIRM NEWORDER REPORTS TO A ROUTE REPORT SUBMITTED BY ANOTHER FIRMFOR WHICH THE FIRM WAS NAMED AS THE SENT TO FIRM. THE FIRMTRANSMITTED TO OATS NUMEROUS ROUTE OR COMBINED ORDER/ROUTEREPORTS THAT THE OATS SYSTEM WAS UNABLE TO LINK TO THERELATED ORDER ROUTED TO NASDAQ DUE TO INACCURATE,INCOMPLETE OR IMPROPERLY FORMATTED DATA. THE FIRMTRANSMITTED TO OATS NUMEROUS NEW ORDER REPORTS AND RELATEDSUBSEQUENT REPORTS WHERE THE TIMESTAMP FOR THE RELATEDSUBSEQUENT REPORT OCCURRED PRIOR TO THE RECEIPT OF THEORDER AND THE OATS SYSTEM WAS UNABLE TO CREATE AN ACCURATE,TIME-SEQUENCED RECORD FROM THE RECEIPT OF THE ORDERTHROUGH ITS RESOLUTION. THE FIRM TRANSMITTED TO OATSREPORTABLE ORDER EVENTS (ROES) THAT WERE REJECTED BY OATSFOR CONTEXT OR SYNTAX ERRORS AND FAILED TO REPAIR MOST OFTHEM. THE FIRM FAILED TO REPORT TO OATS A ROUTE REPORT FOROATS REPORTABLE ORDERS. THE FIRM TRANSMITTED TO OATSNUMEROUS ROUTE OR COMBINED ORDER/ROUTE REPORTS THAT THEOATS SYSTEM WAS UNABLE TO LINK TO THE CORRESPONDING NEWORDER TRANSMITTED BY THE DESTINATION MEMBER FIRM DUE TOINACCURATE, INCOMPLETE OR IMPROPERLY FORMATTED DATA. THE FIRMFAILED TO ENFORCE ITS WRITTEN SUPERVISORY PROCEDURESRELATING TO OATS COMPLIANCE. THE FIRM FAILED TO REPORT TO THEFINRA/NASDAQ TRADE REPORTING FACILITY (TRF) THE CORRECTSYMBOL INDICATING WHETHER IT EXECUTED TRANSACTIONS INREPORTABLE SECURITIES IN A PRINCIPAL OR AGENCY CAPACITY. THEFIRM TRANSMITTED TO OATS REPORTS THAT CONTAINED INACCURATE,INCOMPLETE OR IMPROPERLY FORMATTED DATA; THE FIRM FAILED TOSUBMIT AN EXECUTION REPORT TO OATS; REPORTED INCORRECTCAPACITY INDICATORS; IMPROPERLY SUBMITTED NEW ORDER REPORTS;AND FAILED TO SUBMIT A ROUTE REPORT TO OATS. THE FIRM MADEAVAILABLE A REPORT ON THE COVERED ORDERS IN NATIONAL MARKETSYSTEM SECURITIES IT RECEIVED FOR EXECUTION FROM ANY PERSONTHAT INCLUDED INCORRECT ORDER EXECUTION INFORMATION.[CONTINUED IN COMMENTS]


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $320,000 AND REQUIRED TOREVISE ITS WRITTEN SUPERVISORY PROCEDURES REGARDING OATSCOMPLIANCE, ORDER HANDLING, SALES TRANSACTIONS, SOFT DOLLARACCOUNTS AND TRADING, THE FIRM'S USE OF MULTIPLE MARKETPARTICIPANT IDENTIFIERS (MPIDS), PREVENTING ANTI-INTIMIDATION/COORDINATION, OTHER QUOTING AND TRADING RULESINCLUDING THE MAINTENANCE OF APPROPRIATE BOOKS AND RECORDSWITHIN 30 BUSINESS DAYS OF ACCEPTANCE OF THE AWC BY THE NAC.

Firm Statement ALLEGATIONS CONTINUED: THE FIRM FAILED TO SHOW THE CORRECTCAPACITY ON BROKERAGE ORDER MEMORANDA; FAILED TO PRODUCECUSTOMER SALES ACTIVITY BLOTTERS, PROPRIETARY SALES ACTIVITYBLOTTERS AND REQUIRED ORDER TICKETS AND MEMORANDA ADEQUATEFOR FINRA TO COMPLETE ITS REVIEW OF THE FIRM'S COMPLIANCE WITHSEC RULE 605. THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHAPPLICABLE SECURITIES LAWS, REGULATIONS AND NASD RULESCONCERNING ORDER HANDLING, SALES TRANSACTIONS, SOFT DOLLARACCOUNTS AND TRADING, THE FIRM'S USE OF MULTIPLE MARKETPARTICIPANT IDENTIFIERS (MPIDS), PREVENTING ANTI-INTIMIDATION/COORDINATION, OTHER QUOTING AND TRADING RULESINCLUDING THE MAINTENANCE OF APPROPRIATE BOOKS AND RECORDS.









ALLEGATIONS CONTINUED: THE FIRM FAILED TO SHOW THE CORRECTCAPACITY ON BROKERAGE ORDER MEMORANDA; FAILED TO PRODUCECUSTOMER SALES ACTIVITY BLOTTERS, PROPRIETARY SALES ACTIVITYBLOTTERS AND REQUIRED ORDER TICKETS AND MEMORANDA ADEQUATEFOR FINRA TO COMPLETE ITS REVIEW OF THE FIRM'S COMPLIANCE WITHSEC RULE 605. THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHAPPLICABLE SECURITIES LAWS, REGULATIONS AND NASD RULESCONCERNING ORDER HANDLING, SALES TRANSACTIONS, SOFT DOLLARACCOUNTS AND TRADING, THE FIRM'S USE OF MULTIPLE MARKETPARTICIPANT IDENTIFIERS (MPIDS), PREVENTING ANTI-INTIMIDATION/COORDINATION, OTHER QUOTING AND TRADING RULESINCLUDING THE MAINTENANCE OF APPROPRIATE BOOKS AND RECORDS.


i


Initiated By: FINRA






Other Product Type(s): TRACE-ELIGIBLE SECURITIES

Allegations: NASD RULES 2110, 6230, 6230(A) - UBS SECURITIES LLC FAILED TOREPORT TO THE TRADE REPORTING AND COMPLIANCE ENGINE (TRACE)TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES WITHIN 15 MINUTES OFTHE TIME OF EXECUTION THAT THE FIRM WAS REQUIRED TO REPORT.THE FIRM DOUBLE REPORTED TO TRACE TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES.



Resolution:



No









Sanction Details: WITHPOUT ADMITTING OR DENYING THE FINDINGS, THE FIRMCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $7,500.


Initiated By: FINRA


Other





Other Product Type(s): TRACE-ELIGIBLE SECURITIES

Allegations: NASD RULES 2110, 6230, 6230(A) - UBS SECURITIES LLC FAILED TOREPORT TO THE TRADE REPORTING AND COMPLIANCE ENGINE (TRACE)TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES WITHIN 15 MINUTES OFTHE TIME OF EXECUTION THAT THE FIRM WAS REQUIRED TO REPORT.THE FIRM DOUBLE REPORTED TO TRACE TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES.



Resolution:






i








Initiated By: FINRA







Allegations: NASD RULE 6955 - UBS SECURITIES LLC TRANSMITTED TO THE ORDERAUDIT TRAIL SYSTEM (OATS) REPORTABLE ORDER EVENTS (ROES) THATWERE REJECTED BY OATS FOR CONTEXT OR SYNTAX ERRORS AND THEFIRM FAILED TO REPAIR MOST OF THE REJECTED ROES.



Resolution:




No




Initiated By: FINRA

Allegations: NASD RULE 6955 - UBS SECURITIES LLC TRANSMITTED TO THE ORDERAUDIT TRAIL SYSTEM (OATS) REPORTABLE ORDER EVENTS (ROES) THATWERE REJECTED BY OATS FOR CONTEXT OR SYNTAX ERRORS AND THEFIRM FAILED TO REPAIR MOST OF THE REJECTED ROES FOR Q3 2005.









Censure


MONETARY FINE






Resolution:






i


Initiated By: BOSTON OPTIONS EXCHANGE REGULATION, LLC


Censure


FINE $5000.00





Allegations: THE BOX ALLEGES THAT UBS SECURITIES LLC VIOLATED BOX RULECHAPTER VI, SECTION 5 (C) (III) (2), OBLIGATIONS OF MARKET MAKERS;CHAPTER V, SECTION 15, AUDIT TRAIL; CHAPTER III, BUSINESS CONDUCT,SECTION 1, ADHERENCE TO LAW.









Resolution:


Sanction Details: UBS SECURITIES WAS CENSURED AND FINED $5000.00




i


Initiated By: NEW HAMPSHIREBUREAU OF SECURITIES REGULATION


Restitution


COSTS


Docket/Case Number: COM08-21


Principal Product Type: Debt - Municipal

Other Product Type(s): NA

Allegations: UBS VIOLATED ITS FIDUCIARY DUTY WHEN IT CONVINCED NHHELCO TOINCREASE ITS INTEREST RATES ON ARS KNOWING THAT THE MARKETCOULD COLLAPSE AND TRAP NHHELCO IN A HIGHER INTEREST RATE. UBSHAD A DUTY TO FULLY DISCLOSE WHAT IT WAS DOING IN THE MARKET -TRYING TO WARD OFF CATASTROPHIC FAILURE.



Resolution:


No

Sanctions Ordered:

Consent






Other Sanctions Ordered: SEE #14 BELOW.

Sanction Details: SAME AS ABOVE.

Regulator Statement UBS ENTERED INTO A CONSENT ORDER WITH THE NH BUREAU OFSECURITIES REGULATION, UNDER WHICH IT DID NOT ADMIT OR DENY THEALLEGATIONS, AND AGREED TO PAY $750,000 IN COSTS OF THEINVESTIGATION. CONTEMPORANEOUSLY WITH THE CONSENT ORDER,UBS ENTERED INTO A SEPARATE CIVIL SETTLEMENT WITH NHHELCO INCONNECTION WITH UBS' DEALINGS WITH NHHELCO WITH RESPECT TOAUCTION RATE SECURITIES. THE SETTLEMENT PROVIDED A TOTALFINANCIAL BENEFIT TO NHHELCO IN AN AMOUNT OF TWENTY MILLIONDOLLARS ($20,000,000).

Sanctions Ordered:




Other


NONE


Docket/Case Number: COMO8-10, COMO8-12, COMO8-13



Allegations: THE NHBSR ALLEGES FRAUDULENT AND UNETHICAL CONDUCT AND ABREACH OF FIDUCIARY DUTY TO THE ISSUER, NEW HAMPSHIRE HIGHEREDUCATION LOAN CORP.



Resolution:


Sanction Details: NO SANCTIONS ORDERED

Firm Statement WITHOUT ADMITTING OR DENYING CLAIMS ALLEGED BY THE BUREAU,UBS AGREED TO PAY $750,000 TO NHBSR FOR INVESTIGATIVE COSTSRESOLVING ALL CLAIMS ASSERTED BY THE BUREAU. UBS SEPARATELYPROVIDED A TOTAL FINANCIAL BENEFIT TO NHHELCO IN THE AMOUNT OF$20M

Sanctions Ordered:

Consent






WITHOUT ADMITTING OR DENYING CLAIMS ALLEGED BY THE BUREAU,UBS AGREED TO PAY $750,000 TO NHBSR FOR INVESTIGATIVE COSTSRESOLVING ALL CLAIMS ASSERTED BY THE BUREAU. UBS SEPARATELYPROVIDED A TOTAL FINANCIAL BENEFIT TO NHHELCO IN THE AMOUNT OF$20M


i


Initiated By: FINRA



Allegations: SEC RULES 17A-3, 17A-4, 604 OF REGULATION NMS, NASD RULES 3010,3110, 3370, 4632(B), 4632(C), 4632(D), 4632(E), 6130(D)(6), 6955, 6955(A) -UBS SECURITIES LLC ACCEPTED CUSTOMER SHORT SALE ORDERS INCERTAIN SECURITIES AND, FOR EACH ORDER, FAILED TO MAKE ANAFFIRMATIVE DETERMINATION THAT THE FIRM WOULD RECEIVE DELIVERYOF THE SECURITY ON BEHALF OF THE CUSTOMER OR THAT THE FIRMCOULD BORROW THE SECURITY ON BEHALF OF THE CUSTOMER FORDELIVERY BY SETTLEMENT DATE. THE FIRM EFFECTED SHORT SALES INCERTAIN SECURITIES FOR ITS PROPRIETARY ACCOUNT AND FAILED TOMAKE AN AFFIRMATIVE DETERMINATION OR TO ANNOTATE ANAFFIRMATIVE DETERMINATION THAT THE FIRM COULD BORROW THESECURITIES OR OTHERWISE PROVIDE FOR DELIVERY BY SETTLEMENTDATE. THE FIRM EXECUTED SHORT SALE ORDERS AND FAILED TOPROPERLY MARK THE ORDER TICKETS AS SHORT; THE FIRM EXECUTEDSHORT SALE TRANSACTIONS AND FAILED TO REPORT THEM TO THENASDAQ MARKET CENTER (NMC) WITH A SHORT SALE MODIFIER. THEFIRM SUBMITTED REPORTABLE ORDER EVENTS (ROES) TO OATS AFTERTHE 4:00 AM DEADLINE THAT WERE MARKED LATE BY OATS. THE FIRMFAILED TO SHOW THE TIME OF EXECUTION ON BROKERAGE ORDERMEMORANDA; FAILED TO SHOW THE CORRECT TIME OF EXECUTION ONONE BROKERAGE ORDER MEMORANDA; FAILED TO SHOW THE TIME OFCANCELLATION ON BROKERAGE ORDER MEMORANDA; INCORRECTLYSHOWED A CANCELLATION ON BROKERAGE ORDER MEMORANDA; FAILEDTO SHOW THE LIMIT PRICE OF AN ORDER ON ONE BROKERAGE ORDERMEMORANDA; FAILED TO SHOW THE CUSTOMER NAME AND ACCOUNTNUMBER ON BROKERAGE ORDER MEMORANDA; FAILED TO SHOW THEPARTIAL EXECUTION DETAIL ON BROKERAGE ORDER MEMORANDA;FAILED TO SHOW THE SHORT OR SHORT EXEMPT NOTATION ON ONEBROKERAGE ORDER MEMORANDA; AND FAILED TO SHOW THE CORRECTPRICE OF EXECUTION ON BROKERAGE ORDER MEMORANDA.[CONTINUED IN COMMENTS]











Other Product Type(s): DESIGNATED SECURITIES, NASDAQ SECURITIES


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $116,000 AND REQUIRED TOREVISE ITS WRITTEN SUPERVISORY PROCEDURES CONCERNINGCOMPLIANCE WITH NASD RULES 3110(B)(1), 3370, 6130(D)(6); ORDERHANDLING, BEST EXECUTION, OTHER TRADING RULES, SOFT DOLLARACCOUNTS AND TRADING, AND OTHER RULES.

Regulator Statement THE FIRM FAILED TO PRESERVE FOR A PERIOD OF NOT LESS THAN THREEYEARS, THE FIRST TWO IN AN ACCESSIBLE PLACE, BROKERAGE ORDERMEMORANDA, TRADING LEDGERS AND CUSTOMER CONFIRMATIONSAND/OR ACCOUNT STATEMENTS. THE FIRM REPORTED TO ACT THEINCORRECT CAPACITY FOR LAST SALE REPORTS OF TRANSACTIONS INDESIGNATED SECURITIES; FAILED TO REPORT TO ACT LAST SALEREPORTS OF TRANSACTIONS IN DESIGNATED SECURITIES; REPORTED TOACT THE INCORRECT EXECUTION TIME FOR LAST SALE REPORTS OFTRANSACTIONS IN DESIGNATED SECURITIES AND FAILED TO REPORT THECORRECT MODIFIER FOR LAST SALE REPORTS OF TRANSACTIONS INDESIGNATED SECURITIES; REPORTED TO ACT LAST SALE REPORTS OFTRANSACTIONS IN DESIGNATED SECURITIES IT WAS NOT REQUIRED TOREPORT. THE FIRM TRANSMITTED TO OATS REPORTS THAT CONTAINEDINACCURATE, INCOMPLETE OR IMPROPERLY FORMATTED DATA. THE FIRMFAILED TO DISPLAY IMMEDIATELY CUSTOMER LIMIT ORDERS IN NASDAQSECURITIES IN ITS PUBLIC QUOTATION, WHEN EACH SUCH ORDER WAS ATA PRICE THAT WOULD HAVE IMPROVED ITS BID OR OFFER IN EACHSECURITY; OR WHEN THE ORDER WAS PRICED EQUAL TO THE FIRM'S BIDOR OFFER AND THE NATIONAL BEST BID OR OFFER FOR EACH SECURITY,AND THE SIZE OF THE ORDER REPRESENTED MORE THAN A DE MINIMISCHANGE IN RELATION TO THE SIZE ASSOCIATED WITH THE FIRM'S BID OROFFER IN EACH SECURITY. THE FIRM'S SUPERVISORY SYSTEM DID NOTPROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH NASD RULES 3110(B)(1), 3370, 6130(D)(6); THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLESECURITIES LAWS, REGULATIONS AND NASD RULES CONCERNINGORDER HANDLING, BEST EXECUTION, OTHER TRADING RULES, SOFTDOLLAR ACCOUNTS AND TRADING, AND OTHER RULES. THE FIRM FAILEDTO ENFORCE ITS WRITTEN SUPERVISORY PROCEDURES REGARDINGORDER HANDLING, SOFT DOLLAR ACCOUNTS AND TRADING.


No








THE FIRM FAILED TO PRESERVE FOR A PERIOD OF NOT LESS THAN THREEYEARS, THE FIRST TWO IN AN ACCESSIBLE PLACE, BROKERAGE ORDERMEMORANDA, TRADING LEDGERS AND CUSTOMER CONFIRMATIONSAND/OR ACCOUNT STATEMENTS. THE FIRM REPORTED TO ACT THEINCORRECT CAPACITY FOR LAST SALE REPORTS OF TRANSACTIONS INDESIGNATED SECURITIES; FAILED TO REPORT TO ACT LAST SALEREPORTS OF TRANSACTIONS IN DESIGNATED SECURITIES; REPORTED TOACT THE INCORRECT EXECUTION TIME FOR LAST SALE REPORTS OFTRANSACTIONS IN DESIGNATED SECURITIES AND FAILED TO REPORT THECORRECT MODIFIER FOR LAST SALE REPORTS OF TRANSACTIONS INDESIGNATED SECURITIES; REPORTED TO ACT LAST SALE REPORTS OFTRANSACTIONS IN DESIGNATED SECURITIES IT WAS NOT REQUIRED TOREPORT. THE FIRM TRANSMITTED TO OATS REPORTS THAT CONTAINEDINACCURATE, INCOMPLETE OR IMPROPERLY FORMATTED DATA. THE FIRMFAILED TO DISPLAY IMMEDIATELY CUSTOMER LIMIT ORDERS IN NASDAQSECURITIES IN ITS PUBLIC QUOTATION, WHEN EACH SUCH ORDER WAS ATA PRICE THAT WOULD HAVE IMPROVED ITS BID OR OFFER IN EACHSECURITY; OR WHEN THE ORDER WAS PRICED EQUAL TO THE FIRM'S BIDOR OFFER AND THE NATIONAL BEST BID OR OFFER FOR EACH SECURITY,AND THE SIZE OF THE ORDER REPRESENTED MORE THAN A DE MINIMISCHANGE IN RELATION TO THE SIZE ASSOCIATED WITH THE FIRM'S BID OROFFER IN EACH SECURITY. THE FIRM'S SUPERVISORY SYSTEM DID NOTPROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH NASD RULES 3110(B)(1), 3370, 6130(D)(6); THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLESECURITIES LAWS, REGULATIONS AND NASD RULES CONCERNINGORDER HANDLING, BEST EXECUTION, OTHER TRADING RULES, SOFTDOLLAR ACCOUNTS AND TRADING, AND OTHER RULES. THE FIRM FAILEDTO ENFORCE ITS WRITTEN SUPERVISORY PROCEDURES REGARDINGORDER HANDLING, SOFT DOLLAR ACCOUNTS AND TRADING.


Allegations: SEC RULES 17A-3, 17A-4, 604 OF REGULATION NMS, NASD RULES 3010,3110, 3370, 4632(B), 4632(C), 4632(D), 4632(E), 6130(D)(6), 6955, 6955(A) -UBS SECURITIES LLC ACCEPTED CUSTOMER SHORT SALE ORDERS INCERTAIN SECURITIES AND, FOR EACH ORDER, FAILED TO MAKE ANAFFIRMATIVE DETERMINATION THAT THE FIRM WOULD RECEIVE DELIVERYOF THE SECURITY ON BEHALF OF THE CUSTOMER OR THAT THE FIRMCOULD BORROW THE SECURITY ON BEHALF OF THE CUSTOMER FORDELIVERY BY SETTLEMENT DATE. THE FIRM EFFECTED SHORT SALES INCERTAIN SECURITIES FOR ITS PROPRIETARY ACCOUNT AND FAILED TOMAKE AN AFFIRMATIVE DETERMINATION OR TO ANNOTATE ANAFFIRMATIVE DETERMINATION THAT THE FIRM COULD BORROW THESECURITIES OR OTHERWISE PROVIDE FOR DELIVERY BY SETTLEMENTDATE. THE FIRM EXECUTED SHORT SALE ORDERS AND FAILED TOPROPERLY MARK THE ORDER TICKETS AS SHORT; THE FIRM EXECUTEDSHORT SALE TRANSACTIONS AND FAILED TO REPORT THEM TO THENASDAQ MARKET CENTER (NMC) WITH A SHORT SALE MODIFIER. THEFIRM SUBMITTED REPORTABLE ORDER EVENTS (ROES) TO OATS AFTERTHE 4:00 AM DEADLINE THAT WERE MARKED LATE BY OATS. THE FIRMFAILED TO SHOW THE TIME OF EXECUTION ON BROKERAGE ORDERMEMORANDA; FAILED TO SHOW THE CORRECT TIME OF EXECUTION ONONE BROKERAGE ORDER MEMORANDA; FAILED TO SHOW THE TIME OFCANCELLATION ON BROKERAGE ORDER MEMORANDA; INCORRECTLYSHOWED A CANCELLATION ON BROKERAGE ORDER MEMORANDA; FAILEDTO SHOW THE LIMIT PRICE OF AN ORDER ON ONE BROKERAGE ORDERMEMORANDA; FAILED TO SHOW THE CUSTOMER NAME AND ACCOUNTNUMBER ON BROKERAGE ORDER MEMORANDA; FAILED TO SHOW THEPARTIAL EXECUTION DETAIL ON BROKERAGE ORDER MEMORANDA;FAILED TO SHOW THE SHORT OR SHORT EXEMPT NOTATION ON ONEBROKERAGE ORDER MEMORANDA; AND FAILED TO SHOW THE CORRECTPRICE OF EXECUTION ON BROKERAGE ORDER MEMORANDA.[CONTINUED IN COMMENTS]







Initiated By: FINRA


Censure


MONETARY FINE $116,000.00




Other Product Type(s): DESIGNATED SECURITIES, NASDAQ SECURITIES

SEC RULES 17A-3, 17A-4, 604 OF REGULATION NMS, NASD RULES 3010,3110, 3370, 4632(B), 4632(C), 4632(D), 4632(E), 6130(D)(6), 6955, 6955(A) -UBS SECURITIES LLC ACCEPTED CUSTOMER SHORT SALE ORDERS INCERTAIN SECURITIES AND, FOR EACH ORDER, FAILED TO MAKE ANAFFIRMATIVE DETERMINATION THAT THE FIRM WOULD RECEIVE DELIVERYOF THE SECURITY ON BEHALF OF THE CUSTOMER OR THAT THE FIRMCOULD BORROW THE SECURITY ON BEHALF OF THE CUSTOMER FORDELIVERY BY SETTLEMENT DATE. THE FIRM EFFECTED SHORT SALES INCERTAIN SECURITIES FOR ITS PROPRIETARY ACCOUNT AND FAILED TOMAKE AN AFFIRMATIVE DETERMINATION OR TO ANNOTATE ANAFFIRMATIVE DETERMINATION THAT THE FIRM COULD BORROW THESECURITIES OR OTHERWISE PROVIDE FOR DELIVERY BY SETTLEMENTDATE. THE FIRM EXECUTED SHORT SALE ORDERS AND FAILED TOPROPERLY MARK THE ORDER TICKETS AS SHORT; THE FIRM EXECUTEDSHORT SALE TRANSACTIONS AND FAILED TO REPORT THEM TO THENASDAQ MARKET CENTER (NMC) WITH A SHORT SALE MODIFIER. THEFIRM SUBMITTED REPORTABLE ORDER EVENTS (ROES) TO OATS AFTERTHE 4:00 AM DEADLINE THAT WERE MARKED LATE BY OATS. THE FIRMFAILED TO SHOW THE TIME OF EXECUTION ON BROKERAGE ORDERMEMORANDA; FAILED TO SHOW THE CORRECT TIME OF EXECUTION ONONE BROKERAGE ORDER MEMORANDA; FAILED TO SHOW THE TIME OFCANCELLATION ON BROKERAGE ORDER MEMORANDA; INCORRECTLYSHOWED A CANCELLATION ON BROKERAGE ORDER MEMORANDA; FAILEDTO SHOW THE LIMIT PRICE OF AN ORDER ON ONE BROKERAGE ORDERMEMORANDA; FAILED TO SHOW THE CUSTOMER NAME AND ACCOUNTNUMBER ON BROKERAGE ORDER MEMORANDA; FAILED TO SHOW THEPARTIAL EXECUTION DETAIL ON BROKERAGE ORDER MEMORANDA;FAILED TO SHOW THE SHORT OR SHORT EXEMPT NOTATION ON ONEBROKERAGE ORDER MEMORANDA; AND FAILED TO SHOW THE CORRECTPRICE OF EXECUTION ON BROKERAGE ORDER MEMORANDA.[CONTINUED IN COMMENTS]


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $116,000 AND REQUIRED TOREVISE ITS WRITTEN SUPERVISORY PROCEDURES CONCERNINGCOMPLIANCE WITH NASD RULES 3110(B)(1), 3370, 6130(D)(6); ORDERHANDLING, BEST EXECUTION, OTHER TRADING RULES, SOFT DOLLARACCOUNTS AND TRADING, AND OTHER RULES.

Firm Statement THE FIRM FAILED TO PRESERVE FOR A PERIOD OF NOT LESS THAN THREEYEARS, THE FIRST TWO IN AN ACCESSIBLE PLACE, BROKERAGE ORDERMEMORANDA, TRADING LEDGERS AND CUSTOMER CONFIRMATIONSAND/OR ACCOUNT STATEMENTS. THE FIRM REPORTED TO ACT THEINCORRECT CAPACITY FOR LAST SALE REPORTS OF TRANSACTIONS INDESIGNATED SECURITIES; FAILED TO REPORT TO ACT LAST SALEREPORTS OF TRANSACTIONS IN DESIGNATED SECURITIES; REPORTED TOACT THE INCORRECT EXECUTION TIME FOR LAST SALE REPORTS OFTRANSACTIONS IN DESIGNATED SECURITIES AND FAILED TO REPORT THECORRECT MODIFIER FOR LAST SALE REPORTS OF TRANSACTIONS INDESIGNATED SECURITIES; REPORTED TO ACT LAST SALE REPORTS OFTRANSACTIONS IN DESIGNATED SECURITIES IT WAS NOT REQUIRED TOREPORT. THE FIRM TRANSMITTED TO OATS REPORTS THAT CONTAINEDINACCURATE, INCOMPLETE OR IMPROPERLY FORMATTED DATA. THE FIRMFAILED TO DISPLAY IMMEDIATELY CUSTOMER LIMIT ORDERS IN NASDAQSECURITIES IN ITS PUBLIC QUOTATION, WHEN EACH SUCH ORDER WAS ATA PRICE THAT WOULD HAVE IMPROVED ITS BID OR OFFER IN EACHSECURITY; OR WHEN THE ORDER WAS PRICED EQUAL TO THE FIRM'S BIDOR OFFER AND THE NATIONAL BEST BID OR OFFER FOR EACH SECURITY,AND THE SIZE OF THE ORDER REPRESENTED MORE THAN A DE MINIMISCHANGE IN RELATION TO THE SIZE ASSOCIATED WITH THE FIRM'S BID OROFFER IN EACH SECURITY. THE FIRM'S SUPERVISORY SYSTEM DID NOTPROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH NASD RULES 3110(B)(1), 3370, 6130(D)(6); THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLESECURITIES LAWS, REGULATIONS AND NASD RULES CONCERNINGORDER HANDLING, BEST EXECUTION, OTHER TRADING RULES, SOFTDOLLAR ACCOUNTS AND TRADING, AND OTHER RULES. THE FIRM FAILEDTO ENFORCE ITS WRITTEN SUPERVISORY PROCEDURES REGARDINGORDER HANDLING, SOFT DOLLAR ACCOUNTS AND TRADING.








THE FIRM FAILED TO PRESERVE FOR A PERIOD OF NOT LESS THAN THREEYEARS, THE FIRST TWO IN AN ACCESSIBLE PLACE, BROKERAGE ORDERMEMORANDA, TRADING LEDGERS AND CUSTOMER CONFIRMATIONSAND/OR ACCOUNT STATEMENTS. THE FIRM REPORTED TO ACT THEINCORRECT CAPACITY FOR LAST SALE REPORTS OF TRANSACTIONS INDESIGNATED SECURITIES; FAILED TO REPORT TO ACT LAST SALEREPORTS OF TRANSACTIONS IN DESIGNATED SECURITIES; REPORTED TOACT THE INCORRECT EXECUTION TIME FOR LAST SALE REPORTS OFTRANSACTIONS IN DESIGNATED SECURITIES AND FAILED TO REPORT THECORRECT MODIFIER FOR LAST SALE REPORTS OF TRANSACTIONS INDESIGNATED SECURITIES; REPORTED TO ACT LAST SALE REPORTS OFTRANSACTIONS IN DESIGNATED SECURITIES IT WAS NOT REQUIRED TOREPORT. THE FIRM TRANSMITTED TO OATS REPORTS THAT CONTAINEDINACCURATE, INCOMPLETE OR IMPROPERLY FORMATTED DATA. THE FIRMFAILED TO DISPLAY IMMEDIATELY CUSTOMER LIMIT ORDERS IN NASDAQSECURITIES IN ITS PUBLIC QUOTATION, WHEN EACH SUCH ORDER WAS ATA PRICE THAT WOULD HAVE IMPROVED ITS BID OR OFFER IN EACHSECURITY; OR WHEN THE ORDER WAS PRICED EQUAL TO THE FIRM'S BIDOR OFFER AND THE NATIONAL BEST BID OR OFFER FOR EACH SECURITY,AND THE SIZE OF THE ORDER REPRESENTED MORE THAN A DE MINIMISCHANGE IN RELATION TO THE SIZE ASSOCIATED WITH THE FIRM'S BID OROFFER IN EACH SECURITY. THE FIRM'S SUPERVISORY SYSTEM DID NOTPROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH NASD RULES 3110(B)(1), 3370, 6130(D)(6); THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLESECURITIES LAWS, REGULATIONS AND NASD RULES CONCERNINGORDER HANDLING, BEST EXECUTION, OTHER TRADING RULES, SOFTDOLLAR ACCOUNTS AND TRADING, AND OTHER RULES. THE FIRM FAILEDTO ENFORCE ITS WRITTEN SUPERVISORY PROCEDURES REGARDINGORDER HANDLING, SOFT DOLLAR ACCOUNTS AND TRADING.


i


Initiated By: MASSACHUSETTS SECURITIES DIVISION


Restitution


CEASE AND DESIST; RECISSION OF SALES OF AUCTION RATE SECURITIESAT PAR OR RESTITUTION TO INVESTORS WHO HAVE ALREADY SOLDTHESE INSTRUMENTS BELOW PAR) ON TERMS/CONDITIONS THAT AHEARING OFFICER DEEMS APPROPRIATE; CENSURE; ADMINSITRATIVEFINE; ANY OTHER ACTION DEEMED IN THE PUBLIC INTEREST/FOR THEPROTECTION OF MASS INVESTORS BY THE HEARING OFFICER


Docket/Case Number: E-2008-0045




Allegations: THE DIVISION CHARGED UBS SECURITIES AND UBS FINANCIAL SERVICESWITH FRAUD AND DISHONEST AND UNETHICAL SALES PRACTICES INCONNECTION WITH ITS MARKETING AND SALES OF AUCTION RATESECURTIES AS WELL AS BOOKS AND RECORDS VIOLATIONS







CEASE AND DESIST; RECISSION OF SALES OF AUCTION RATE SECURITIESAT PAR OR RESTITUTION TO INVESTORS WHO HAVE ALREADY SOLDTHESE INSTRUMENTS BELOW PAR) ON TERMS/CONDITIONS THAT AHEARING OFFICER DEEMS APPROPRIATE; CENSURE; ADMINSITRATIVEFINE; ANY OTHER ACTION DEEMED IN THE PUBLIC INTEREST/FOR THEPROTECTION OF MASS INVESTORS BY THE HEARING OFFICER


Resolution:


Sanction Details: BUY BACK OF AUCTION RATE SECURITIES PURSUANT TO SPECIFICATIONSOF CONSENT ORDER.CERTAIN RELIEF FOR INVESTORS WHO SOLD BELOW PAR, PURSUANT TOSPECIFICATIONS IN CONSENT ORDER.$75,000,000.00 DISTRIBUTED AMONG STATES.


No


Consent




Restitution


CEASE AND DESIST, RECISSION/RESTITUTION, CENSURE, MONETARYFINES





Allegations: THE ADMINISTRATIVE COMPLAINT ALLEGES FRAUD, DISHONEST ANDUNETHICAL SALES PRACTICES AS WELL AS CERTAIN BOOKS ANDRECORDS VIOLATIONS SURROUNDING THE MARKETING AND SALE OFAUCTION RATE SECURITIES. THE FIRM DENIES THE ALLEGATIONSCONTAINED WITHIN THE COMPLAINT.








Resolution:


Sanction Details: MASSACHUSETTS RECEIVED $2,180,875.36 FROM A TOTAL FINE OF $75MMAGREED UPON WITH THE STATE OF MASSACHUSETTS AND THE NORTHAMERICAN SECURITIES ADMINISTRATORS ASSOCIATION.

Firm Statement ON OCTOBER 2, 2008, UBS SECURITIES LLC ENTERED INTO A CONSENTORDER WITH THE STATE OF MASSACHUSETTS SECURITIES DIVISIONSETTLING ADMINISTRATIVE COMPLAINT (DOCKET # 2008-0045) WITHPREJUDICE. UBS SECURITIES LLC DID NOT ADMIT OR DENY ANYALLEGATIONS IN THE ADMINISTRATIVE COMPLAINT AND THE CONSENTORDER DID NOT CONTAIN ANY ADJUDICATIONS OF LAW OR FACT.


Consent


i


Initiated By: FINRA






Other Product Type(s): ITS/CAES SECURITIES

Allegations: NASD RULE 5262 - UBS SECURITIES LLC, AN INTERMARKET TRADINGSYSTEM/COMPUTER ASSISTED EXECUTION SYSTEM (ITS/CAES)MARKETMAKER, PURCHASED OR SOLD ITS/CAES SECURITIES, WHETHER IN APRINCIPAL CAPACITY OR AS AN AGENT, AT A PRICE LOWER THAN THE BIDOR HIGHER THAN THE OFFER DISPLAYED FROM AN ITS PARTICIPANTEXCHANGE OR ITS/CAES MARKET MAKER.














No



Initiated By: FINRA


Censure


MONETARY FINE




Other Product Type(s): ITS/CAES SECURITIES

Allegations: NASD RULE 5262 - UBS SECURITIES LLC, AN INTERMARKET TRADINGSYSTEM/COMPUTER ASSISTED EXECUTION SYSTEM (ITS/CAES)MARKETMAKER, PURCHASED OR SOLD ITS/CAES SECURITIES, WHETHER IN APRINCIPAL CAPACITY OR AS AN AGENT, AT A PRICE LOWER THAN THE BIDOR HIGHER THAN THE OFFER DISPLAYED FROM AN ITS PARTICIPANTEXCHANGE OR ITS/CAES MARKET MAKER.



Resolution:












i










Allegations: UBS SECURITIES, LLC, AN EXCHANGE MARKET-MAKER ORGANIZATION,WAS CENSURED AND FINED $100,000. IN ADDITION, THE COMMITTEEORDERED DISGORGEMENT IN THE AMOUNT OF $31,500 FOR THEFOLLOWING CONDUCT. UBS RECEIVED A UBS CUSTOMER ORDER VIA AUBS SALES TRADER TO BUY 6000 ANHEUSER BUSCH (BUD) AUG 50 CALLSFOR $5.40 TIED TO BUD STOCK PRICE OF $54.50, DELTA NEUTRAL("CUSTOMER ORDER"). AFTER UBS RECEIVED THE CUSTOMER ORDERBUT PRIOR TO THE CUSTOMER ORDER BEING PROPERLY DISCLOSED,UBS HEDGED ITS ANTICIPATED FACILITATION OF THE PENDINGCUSTOMER ORDER, IN THAT UBS ENTERED A PROPRIETARY ORDERELECTRONICALLY ACROSS ALL OPTION EXCHANGES TO BUY 4000 BUDAUG 50 PUTS FOR $0.60 AND RECEIVED AN EXECUTION ON 3493CONTRACTS FOR $0.60 IN CONTRAVENTION OF EXCHANGE RULE 6.9(E) -SOLICITATION. IN ADDITION, UBS FAILED TO PROPERLY SUPERVISE ITSASSOCIATED PERSON TO REASONABLY ENSURE THAT HIS CONDUCT WASCONSISTENT WITH JUST AND EQUITABLE PRINCIPLES OF TRADE. (CBOERULES 4.1 -JUST AND EQUITABLE PRINCIPLES OF TRADE AND 4.2 -ADHERENCE TO LAW)



Resolution:








Other Sanctions Ordered: DISGORGEMENT IN THE AMOUNT OF $31,500.

Sanction Details: A $100,000 FINE, A CENSURE AND DISGORGEMENT IN THE AMOUNT OF$31,500.





Censure


FINE OF $100,000.00 AND $31,500.00 DISGORGEMENT





Allegations: THE CBOE HAS ISSUED A STATEMENT OF CHARGES ALLEGING AVIOLATION OF EXCHANGE RULES 4.1 (JUST AND EQUITABLE PRINCIPLESOF TRADE), 4.2 (ADHERENCE TO LAW) AND FAILURE TO SUPERVISE INCONNECTION WITH TRADING IN BUD OPTIONS AND STOCK ON JUNE 19,2007. THE FIRM BELIEVES THAT NO WRONG DOING OCCURRED.



Resolution:


Sanction Details: UBS SECURITIES LLC WAS FINED $100,000.00 AND ORDERED TODISGORGE $31,500.00.

Firm Statement THE DECISION ACCEPTING OFFER OF SETTLEMENT CONCERNSVIOLATIONS OF EXCHANGE RULES 4.1, 4.2, AND 6.9(E).


Settled


i








Initiated By: NEW YORK MERCANTILE EXCHANGE


Other


$10,000 FINE


Docket/Case Number:


Other Product Type(s): COMMODITIES

Allegations: THE NYMEX BOARD OF GOVERNORS APPROVED A SETTLEMENTBETWEEN NYMEX AND UBS TO RESOLVE MINOR OFFENSES STEMMINGFROM UBS'VIOLATION OF NYMEX DIVISION RULE 9.27 RELATING TO CURRENTDELIVERY MONTH POSITION LIMITS. THE SETTLEMENT PROVIDES FORTHE PAYMENT BY UBS OF A FINE IN THE AMOUNT OF $10,000, ANAGREEMENT BY UBS TO CEASE AND DESIST FROM FURTHER VIOLATIONS,AND THE ADOPTION BY UBS OF FORMAL PROCEDURES FOR THEMONITORING OF POSITION LIMITS BY COMPLIANCE AND DESK HEADS ININDIVIDUAL NYMEX CONTRACTS AND PROVIDE FOR FORMAL ESCALATIONOF POTENTIAL LIMIT BREACHES TO SENIOR MANAGEMENT.



Resolution:

Other Sanctions Ordered: CEASE AND DESIST FROM FUTURE VIOLATIONS





i


Allegations: SEC RULE 604 OF REGULATION NMS, NASD RULES 2110, 3010 - UBSSECURITIES LLC FAILED TO DISPLAY IMMEDIATELY CUSTOMER LIMITORDERS IN NASDAQ SEUCRITIES IN ITS PUBLIC QUOTATION WHEN EACHSUCH ORDER WAS AT A PRICE THAT WOULD HAVE IMPROVED THE FIRM'SBID OR OFFER IN EACH SUCH SECURITY, OR WHEN THE ORDER WASPRICED EQUAL TO THE FIRM'S BID OR OFFER AND THE NATIONAL BESTBID OR OFFER FOR EACH SUCH SECURITY, AND THE SIZE OF THE ORDERREPRESENTED MORE THAN A DE MINIMIS CHANGE IN RELATION TO THESIZE ASSOCIATED WITH THE FIRM'S BID OR OFFER IN EACH SUCHSECURITY. THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHAPPLICABLE SECURITIES LAWS, REGULATIONS AND NASD RULESCONCERNING LIMIT ORDER DISPLAY.







Initiated By: FINRA






Other Product Type(s): NASDAQ SECURITIES

SEC RULE 604 OF REGULATION NMS, NASD RULES 2110, 3010 - UBSSECURITIES LLC FAILED TO DISPLAY IMMEDIATELY CUSTOMER LIMITORDERS IN NASDAQ SEUCRITIES IN ITS PUBLIC QUOTATION WHEN EACHSUCH ORDER WAS AT A PRICE THAT WOULD HAVE IMPROVED THE FIRM'SBID OR OFFER IN EACH SUCH SECURITY, OR WHEN THE ORDER WASPRICED EQUAL TO THE FIRM'S BID OR OFFER AND THE NATIONAL BESTBID OR OFFER FOR EACH SUCH SECURITY, AND THE SIZE OF THE ORDERREPRESENTED MORE THAN A DE MINIMIS CHANGE IN RELATION TO THESIZE ASSOCIATED WITH THE FIRM'S BID OR OFFER IN EACH SUCHSECURITY. THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHAPPLICABLE SECURITIES LAWS, REGULATIONS AND NASD RULESCONCERNING LIMIT ORDER DISPLAY.


Resolution:




No










Initiated By: FINRA


Censure


FINE





Allegations: SEC RULE 604 OF REGULATION NMS, NASD RULES 2110, 3010 - UBSSECURITIES LLC FAILED TO DISPLAY IMMEDIATELY CUSTOMER LIMITORDERS IN NASDAQ SEUCRITIES IN ITS PUBLIC QUOTATION WHEN EACHSUCH ORDER WAS AT A PRICE THAT WOULD HAVE IMPROVED THE FIRM'SBID OR OFFER IN EACH SUCH SECURITY, OR WHEN THE ORDER WASPRICED EQUAL TO THE FIRM'S BID OR OFFER AND THE NATIONAL BESTBID OR OFFER FOR EACH SUCH SECURITY, AND THE SIZE OF THE ORDERREPRESENTED MORE THAN A DE MINIMIS CHANGE IN RELATION TO THESIZE ASSOCIATED WITH THE FIRM'S BID OR OFFER IN EACH SUCHSECURITY. THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHAPPLICABLE SECURITIES LAWS, REGULATIONS AND NASD RULESCONCERNING LIMIT ORDER DISPLAY.



Resolution:


Sanction Details: CENSURE AND FINE




i


Allegations: NASD RULES 2110, 3010, 3310 - UBS SECURITIES LLC'S AGGREGATETRADE VOLUME (BUY AND SELL) FOR EQUITY SECURITIES ADVERTISED INPRIVATE SERVICE PROVIDERS FOR ONE MONTH SUBSTANTIALLYEXCEEDED THE FIRM'S EXECUTED TRADE VOLUME FOR THE SAMESECURITIES. THE FIRM FAILED TO DETERMINE WHETHER THE TRADEVOLUME THAT IT ADVERTISED IN THESE SERVICES ACCURATELYREFLECTED ITS EXECUTED TRADE VOLUME. THE FIRM'S SUPERVISORYSYSTEM DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNEDTO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIES LAWS,REGULATIONS AND NASD RULES CONCERNING NASD RULE 3310 - THEIDENTIFICATION OF THE PERSON(S) RESPONSIBLE FOR SUPERVISIONWITH RESPECT TO THE ADVERTISED TRADE VOLUME ON SUBSCRIBERSERVICES AND APPLICABLE RULES. THE FIRM DID NOT SUPERVISE THETRADE VOLUME THAT IT ADVERTISED IN THESE SYSTEMS.







Initiated By: FINRA







NASD RULES 2110, 3010, 3310 - UBS SECURITIES LLC'S AGGREGATETRADE VOLUME (BUY AND SELL) FOR EQUITY SECURITIES ADVERTISED INPRIVATE SERVICE PROVIDERS FOR ONE MONTH SUBSTANTIALLYEXCEEDED THE FIRM'S EXECUTED TRADE VOLUME FOR THE SAMESECURITIES. THE FIRM FAILED TO DETERMINE WHETHER THE TRADEVOLUME THAT IT ADVERTISED IN THESE SERVICES ACCURATELYREFLECTED ITS EXECUTED TRADE VOLUME. THE FIRM'S SUPERVISORYSYSTEM DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNEDTO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIES LAWS,REGULATIONS AND NASD RULES CONCERNING NASD RULE 3310 - THEIDENTIFICATION OF THE PERSON(S) RESPONSIBLE FOR SUPERVISIONWITH RESPECT TO THE ADVERTISED TRADE VOLUME ON SUBSCRIBERSERVICES AND APPLICABLE RULES. THE FIRM DID NOT SUPERVISE THETRADE VOLUME THAT IT ADVERTISED IN THESE SYSTEMS.


Resolution:




No










Initiated By: FINRA


Other


MONETARY FINE AND CENSURE





Allegations: UBS SECURITIES LLC'S AGGREGATE TRADE VOLUME (BUY AND SELL) FOREQUITY SECURITIES ADVERTISED IN PRIVATE SERVICE PROVIDERS FORONE MONTH SUBSTANTIALLY EXCEEDED THE FIRM'S EXECUTED TRADEVOLUME FOR THE SAME SECURITIES. THE FIRM FAILED TO DETERMINEWHETHER THE TRADE VOLUME THAT IT ADVERTISED IN THESE SERVICESACCURATELY REFLECTED ITS EXECUTED TRADE VOLUME. THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLESECURITIES LAWS, REGULATIONS AND RULES CONCERNING NASD RULE3310. THE FIRM DID NOT SUPERVISE THE TRADE VOLUME THAT ITADVERTISED IN THESE SYSTEMS.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS. THEFIRM WAS CENSURED AND FINED $200,000.




i


Allegations: **6/29/07**STIPULATION AND CONSENT TO PENALTY FILED BY NYSEREGULATION'S DIVISION OF ENFORCEMENT AND PENDING.CONSENTEDTO FINDINGS:WITHOUT ADMITTING OR DENYING GUILT, UBS SECURITIESLLC CONSENTS TO FINDINGS THAT IT VIOLATED:1. NYSE RULE 401(A) BY FAILING TO ADHERE TO THE PRINCIPLES OFGOOD BUSINESS PRACTICE IN THAT THE FIRM FAILED TO ENSURE THEDELIVERY OF PROSPECTUSES IN CONNECTION WITH CERTAIN SALES OFREGISTERED SECURITIES IN VIOLATION OF SECTION 5(B)(2) OF THESECURITIES ACT OF 1933;2. NYSE RULE 1100(B) BY FAILING TO DELIVERPRODUCT DESCRIPTIONS TO CUSTOMERS THAT PURCHASED EXCHANGETRADED FUNDS; AND 3. NYSE RULE 342 BY FAILING TO PROVIDE FOR,ESTABLISH AND MAINTAIN APPROPRIATE PROCEDURES OF SUPERVISIONAND CONTROL INCLUDING A SYSTEM OF FOLLOW-UP AND REVIEW, WITHRESPECT TO ITS OPERATIONAL AND TECHNOLOGICAL ACTIVITIESRELATING TO THE DELIVERY OF PRODUCT DESCRIPTIONS ANDPROSPECTUSES TO CUSTOMERS THAT PURCHASED CERTAIN SECURITIESAS DESCRIBED ABOVE.STIPULATED SANCTION:THE IMPOSITION BY THE NYSE OF:1.CENSURE;2. A FINE IN THE AMOUNT OF $800,000; AND 3. AN UNDERTAKING TOPROVIDE ENFORCEMENT WITH A WRITTEN CERTIFICATION THAT ITSCURRENT POLICIES AND PROCEDURES, INCLUDING WRITTENSUPERVISORY AND OPERATIONAL POLICIES AND PROCEDURES,REGARDING THE DELIVERY OF PROSPECTUSES AND PRODUCTDESCRIPTIONS ARE REASONABLY DESIGNED TO ENSURE COMPLIANCEWITH THE FEDERAL SECURITIES LAWS AND NYSE RULES APPLICABLE TOTHE DELIVERY OF PROSPECTUSES AND PRODUCT DESCRIPTIONS. THEFIRM WILL PROVIDE ENFORCEMENT WITH THIS WRITTEN CERTIFICATIONWITHIN 90 DAYS FROM THE DATE THAT A HEARING PANEL DECISION INTHIS MATTER BECOMES FINAL.














**6/29/07**STIPULATION AND CONSENT TO PENALTY FILED BY NYSEREGULATION'S DIVISION OF ENFORCEMENT AND PENDING.CONSENTEDTO FINDINGS:WITHOUT ADMITTING OR DENYING GUILT, UBS SECURITIESLLC CONSENTS TO FINDINGS THAT IT VIOLATED:1. NYSE RULE 401(A) BY FAILING TO ADHERE TO THE PRINCIPLES OFGOOD BUSINESS PRACTICE IN THAT THE FIRM FAILED TO ENSURE THEDELIVERY OF PROSPECTUSES IN CONNECTION WITH CERTAIN SALES OFREGISTERED SECURITIES IN VIOLATION OF SECTION 5(B)(2) OF THESECURITIES ACT OF 1933;2. NYSE RULE 1100(B) BY FAILING TO DELIVERPRODUCT DESCRIPTIONS TO CUSTOMERS THAT PURCHASED EXCHANGETRADED FUNDS; AND 3. NYSE RULE 342 BY FAILING TO PROVIDE FOR,ESTABLISH AND MAINTAIN APPROPRIATE PROCEDURES OF SUPERVISIONAND CONTROL INCLUDING A SYSTEM OF FOLLOW-UP AND REVIEW, WITHRESPECT TO ITS OPERATIONAL AND TECHNOLOGICAL ACTIVITIESRELATING TO THE DELIVERY OF PRODUCT DESCRIPTIONS ANDPROSPECTUSES TO CUSTOMERS THAT PURCHASED CERTAIN SECURITIESAS DESCRIBED ABOVE.STIPULATED SANCTION:THE IMPOSITION BY THE NYSE OF:1.CENSURE;2. A FINE IN THE AMOUNT OF $800,000; AND 3. AN UNDERTAKING TOPROVIDE ENFORCEMENT WITH A WRITTEN CERTIFICATION THAT ITSCURRENT POLICIES AND PROCEDURES, INCLUDING WRITTENSUPERVISORY AND OPERATIONAL POLICIES AND PROCEDURES,REGARDING THE DELIVERY OF PROSPECTUSES AND PRODUCTDESCRIPTIONS ARE REASONABLY DESIGNED TO ENSURE COMPLIANCEWITH THE FEDERAL SECURITIES LAWS AND NYSE RULES APPLICABLE TOTHE DELIVERY OF PROSPECTUSES AND PRODUCT DESCRIPTIONS. THEFIRM WILL PROVIDE ENFORCEMENT WITH THIS WRITTEN CERTIFICATIONWITHIN 90 DAYS FROM THE DATE THAT A HEARING PANEL DECISION INTHIS MATTER BECOMES FINAL.


Resolution:


Decision







Sanction Details: **9/7/07** DECISION 07-114 ISSUED BY NYSE HEARING BOARDDECISION: UBS SECURITIES LLC CONSENTED TO FINDINGS THAT ITVIOLATED: 1. NYSE RULE 401(A) BY FAILING TO ADHERE TO THEPRINCIPLES OF GOOD BUSINESS PRACTICE IN THAT THE FIRM FAILED TOENSURE THE DELIVERY OF PROSPECTUSES IN CONNECTION WITHCERTAIN SALES OF REGISTERED SECURITIES IN VIOLATION OF SECTION5(B)(2) OF THE SECURITIES ACT OF 1933; 2. NYSE RULE 1100(B) BY FAILINGTO DELIVER PRODUCT DESCRIPTIONS TO CUSTOMERS THAT PURCHASEDEXCHANGE TRADED FUNDS; AND3. NYSE RULE 342 BY FAILING TO PROVIDE FOR, ESTABLISH AND MAINTAINAPPROPRIATE PROCEDURES OF SUPERVISION AND CONTROL INCLUDINGA SYSTEM OF FOLLOW-UP AND REVIEW, WITH RESPECT TO ITSOPERATIONAL AND TECHNOLOGICAL ACTIVITIES RELATING TO THEDELIVERY OF PRODUCT DESCRIPTIONS AND PROSPECTUSES TOCUSTOMERS THAT PURCHASED CERTAIN SECURITIES AS DESCRIBEDABOVE. SANCTION: CENSURE, A $800,000 FINE AND AN UNDERTAKING.

Regulator Statement **10/4/07** THE DECISION BECAME FINAL AS OF THE CLOSE OF BUSINESSON OCTOBER 2, 2007 AND THE FINE BECAME PAYABLE ON THAT SAMEDATE. CONTACT: PEGGY GERMINO 212-656-8450.

CensureMonetary/Fine $800,000.00


Allegations: STIPULATION AND CONSENT TO PENALTY FILED BY NYSE REGULATION'SDIVISION OF ENFORCEMENT. CONSENTED TO FINDINGS:WITHOUTADMITTING OR DENYING GUILT, THE FIRM CONSENTED TO FINDINGS THATIT VIOLATED: 1. NYSE RULE 401(A) BY FAILING TO ADHERE TO THEPRINCIPLES OF GOOD BUSINESS PRACTICE IN THAT THE FIRM FAILED TOENSURE THE DELIVERY OF PROSPECTUSES IN CONNECTION WITHCERTAIN SALES OF REGISTERED SECURITIES IN VIOLATION OF SECTION5(B)(2) OF THE SECURITIES ACT OF 1933;2. NYSE RULE 1100(B) BY FAILINGTO DELIVER PRODUCT DESCRIPTIONS TO CUSTOMERS THAT PURCHASEDEXCHANGE TRADED FUNDS; AND 3. NYSE RULE 342 BY FAILING TOPROVIDE FOR, ESTABLISH AND MAINTAIN APPROPRIATE PROCEDURES OFSUPERVISION AND CONTROL INCLUDING A SYSTEM OF FOLLOW-UP ANDREVIEW, WITH RESPECT TO ITS OPERATIONAL AND TECHNOLOGICALACTIVITIES RELATING TO THE DELIVERY OF PRODUCT DESCRIPTIONSAND PROSPECTUSES TO CUSTOMERS THAT PURCHASED CERTAINSECURITIES AS DESCRIBED ABOVE. THE FIRM STIPULATED TO A CENSUREAND FINE IN THE AMOUNT OF $800,000. THE FIRM AGREED TO ANUNDERTAKING TO PROVIDE ENFORCEMENT WITH A WRITTENCERTIFICATION THAT ITS CURRENT POLICIES AND PROCEDURES,INCLUDING WRITTEN SUPERVISORY AND OPERATIONAL POLICIES ANDPROCEDURES, REGARDING THE DELIVERY OF PROSPECTUSES ANDPRODUCT DESCRIPTIONS ARE REASONABLY DESIGNED TO ENSURECOMPLIANCE WITH THE FEDERAL SECURITIES LAWS AND NYSE RULESAPPLICABLE TO THE DELIVERY OF PROSPECTUSES AND PRODUCTDESCRIPTIONS. THE FIRM WILL PROVIDE ENFORCEMENT WITH THISWRITTEN CERTIFICATION BY JANUARY 2, 2008.









Censure


FINE




Other Product Type(s): DELIVERY OF PROSPECTUSES

STIPULATION AND CONSENT TO PENALTY FILED BY NYSE REGULATION'SDIVISION OF ENFORCEMENT. CONSENTED TO FINDINGS:WITHOUTADMITTING OR DENYING GUILT, THE FIRM CONSENTED TO FINDINGS THATIT VIOLATED: 1. NYSE RULE 401(A) BY FAILING TO ADHERE TO THEPRINCIPLES OF GOOD BUSINESS PRACTICE IN THAT THE FIRM FAILED TOENSURE THE DELIVERY OF PROSPECTUSES IN CONNECTION WITHCERTAIN SALES OF REGISTERED SECURITIES IN VIOLATION OF SECTION5(B)(2) OF THE SECURITIES ACT OF 1933;2. NYSE RULE 1100(B) BY FAILINGTO DELIVER PRODUCT DESCRIPTIONS TO CUSTOMERS THAT PURCHASEDEXCHANGE TRADED FUNDS; AND 3. NYSE RULE 342 BY FAILING TOPROVIDE FOR, ESTABLISH AND MAINTAIN APPROPRIATE PROCEDURES OFSUPERVISION AND CONTROL INCLUDING A SYSTEM OF FOLLOW-UP ANDREVIEW, WITH RESPECT TO ITS OPERATIONAL AND TECHNOLOGICALACTIVITIES RELATING TO THE DELIVERY OF PRODUCT DESCRIPTIONSAND PROSPECTUSES TO CUSTOMERS THAT PURCHASED CERTAINSECURITIES AS DESCRIBED ABOVE. THE FIRM STIPULATED TO A CENSUREAND FINE IN THE AMOUNT OF $800,000. THE FIRM AGREED TO ANUNDERTAKING TO PROVIDE ENFORCEMENT WITH A WRITTENCERTIFICATION THAT ITS CURRENT POLICIES AND PROCEDURES,INCLUDING WRITTEN SUPERVISORY AND OPERATIONAL POLICIES ANDPROCEDURES, REGARDING THE DELIVERY OF PROSPECTUSES ANDPRODUCT DESCRIPTIONS ARE REASONABLY DESIGNED TO ENSURECOMPLIANCE WITH THE FEDERAL SECURITIES LAWS AND NYSE RULESAPPLICABLE TO THE DELIVERY OF PROSPECTUSES AND PRODUCTDESCRIPTIONS. THE FIRM WILL PROVIDE ENFORCEMENT WITH THISWRITTEN CERTIFICATION BY JANUARY 2, 2008.


Resolution:


Sanction Details: DECISION 07-114 ISSUED BY NYSE HEARING BOARD DECISION: UBSSECURITIES LLC CONSENTED TO FINDINGS THAT IT VIOLATED: 1. NYSERULE 401(A) BY FAILING TO ADHERE TO THE PRINCIPLES OF GOODBUSINESS PRACTICE IN THAT THE FIRM FAILED TO ENSURE THE DELIVERYOF PROSPECTUSES IN CONNECTION WITH CERTAIN SALES OFREGISTERED SECURITIES IN VIOLATION OF SECTION 5(B)(2) OF THESECURITIES ACT OF 1933; 2. NYSE RULE 1100(B) BY FAILING TO DELIVERPRODUCT DESCRIPTIONS TO CUSTOMERS THAT PURCHASED EXCHANGETRADED FUNDS; AND 3. NYSE RULE 342 BY FAILING TO PROVIDE FOR,ESTABLISH AND MAINTAIN APPROPRIATE PROCEDURES OF SUPERVISIONAND CONTROL INCLUDING A SYSTEM OF FOLLOW-UP AND REVIEW, WITHRESPECT TO ITS OPERATIONAL AND TECHNOLOGICAL ACTIVITIESRELATING TO THE DELIVERY OF PRODUCT DESCRIPTIONS ANDPROSPECTUSES TO CUSTOMERS THAT PURCHASED CERTAIN SECURITIESAS DESCRIBED ABOVE. SANCTION: CENSURE, $800,000 FINE AND ANUNDERTAKING.

Firm Statement THE FIRM REMEDIATED THE IDENTIFIED DEFICENCIES AND ENHANCED ITSPROCEDURES REGARDING PROSPECTUS DELIVERY.








Firm Statement THE FIRM REMEDIATED THE IDENTIFIED DEFICENCIES AND ENHANCED ITSPROCEDURES REGARDING PROSPECTUS DELIVERY.


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Allegations: **7/18/07** STIPULATION EXECUTED BY NYSE DIVISION OFENFORCEMENT AND RESPONDENT CONSENTED TO A FINDING:1. VIOLATED NYSE RULE 472(K)(1) IN THAT ON NUMEROUS OCCASIONSTHE FIRM FAILED TO INCLUDE REQUIRED DISCLOSURES IN CERTAIN OFITS PUBLISHED RESEARCH REPORTS REGARDING: (I) NON-INVESTMENTBANKING RELATED COMPENSATION AND SUBJECT COMPANYRELATIONSHIPS; AND (II) INVESTMENT BANKING SUBJECT COMPANYRELATIONSHIPS. 2. VIOLATED NYSE RULE 342 BY FAILING TO PROVIDEFOR APPROPRIATE PROCEDURES OF SUPERVISION AND CONTROL, ANDESTABLISH A SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW RELATINGTO THE INCLUSION OF CERTAIN DISCLOSURES IN RESEARCH REPORTSISSUED BY THE FIRM AS REQUIRED BY NYSE RULE 472(K)(1). THE FIRMCONSENTED TO THE IMPOSITION BY THE NYSE OF THE SANCTION OF ACENSURE AND A FINE IN THE AMOUNT OF $150,000.



Resolution:


Sanction Details: **8/22/07** DECISION #07-125 ISSUED BY NYSE HEARING BOARDDECISION: A HEARING OFFICER ON BEHALF OF NYSE FOUND THAT UBSHAD: 1. VIOLATED NYSE RULE 472(K)(1) IN THAT ON NUMEROUSOCCASIONS THE FIRM FAILED TO INCLUDE REQUIRED DISCLOSURES INCERTAIN OF ITS PUBLISHED RESEARCH REPORTS REGARDING: (I) NON-INVESTMENT BANKING RELATED COMPENSATION AND SUBJECTCOMPANY RELATIONSHIPS; AND (II) INVESTMENT BANKING SUBJECTCOMPANY RELATIONSHIPS; AND 2. VIOLATED NYSE RULE 342 BY FAILINGTO PROVIDE FOR APPROPRIATE PROCEDURES OF SUPERVISION ANDCONTROL, AND ESTABLISH A SEPARATE SYSTEM OF FOLLOW-UP ANDREVIEW RELATING TO THE INCLUSION OF CERTAIN DISCLOSURES INRESEARCH REPORTS ISSUED BY THE FIRM AS REQUIRED BY NYSE RULE472(K)(1). SANCTION: THE HEARING BOARD IMPOSED THE SANCTION,CONSENTED TO BY UBS, OF A CENSURE AND A $150,000 FINE.


Decision






**8/22/07** DECISION #07-125 ISSUED BY NYSE HEARING BOARDDECISION: A HEARING OFFICER ON BEHALF OF NYSE FOUND THAT UBSHAD: 1. VIOLATED NYSE RULE 472(K)(1) IN THAT ON NUMEROUSOCCASIONS THE FIRM FAILED TO INCLUDE REQUIRED DISCLOSURES INCERTAIN OF ITS PUBLISHED RESEARCH REPORTS REGARDING: (I) NON-INVESTMENT BANKING RELATED COMPENSATION AND SUBJECTCOMPANY RELATIONSHIPS; AND (II) INVESTMENT BANKING SUBJECTCOMPANY RELATIONSHIPS; AND 2. VIOLATED NYSE RULE 342 BY FAILINGTO PROVIDE FOR APPROPRIATE PROCEDURES OF SUPERVISION ANDCONTROL, AND ESTABLISH A SEPARATE SYSTEM OF FOLLOW-UP ANDREVIEW RELATING TO THE INCLUSION OF CERTAIN DISCLOSURES INRESEARCH REPORTS ISSUED BY THE FIRM AS REQUIRED BY NYSE RULE472(K)(1). SANCTION: THE HEARING BOARD IMPOSED THE SANCTION,CONSENTED TO BY UBS, OF A CENSURE AND A $150,000 FINE.

Regulator Statement **9/18/07** THE DECISION BECAME FINAL AS OF THE CLOSE OF BUSINESSON SEPTEMBER 17, 2007 AND THE FINE BECAME PAYABLE ON THAT SAMEDATE. CONTACT: PEGGY GERMINO 212-656-8540.


Initiated By: THE NEW YORK STOCK EXCHANGE


Censure


FINE IN THE AMOUNT OF $150,000


Docket/Case Number: HBD 07-125



Allegations: STIPULATION EXECUTED BY NYSE DIVISION OF ENFORCEMENT ANDRESPONDENT CONSENTED TO A FINDING: 1. VIOLATED NYSE RULE472(K)(1) IN THAT ON NUMEROUS OCCASIONS THE FIRM FAILED TOINCLUDE REQUIRED DISCLOSURES IN CERTAIN OF ITS PUBLISHEDRESEARCH REPORTS REGARDING: (I) NON-INVESTMENT BANKINGRELATED COMPENSATION AND SUBJECT COMPANY RELATIONSHIPS; AND(II) INVESTMENT BANKING SUBJECT COMPANY RELATIONSHIPS. 2.VIOLATED NYSE RULE 342 BY FAILING TO PROVIDE FOR APPROPRIATEPROCEDURES OF SUPERVISION AND CONTROL, AND ESTABLISH ASEPARATE SYSTEM OF FOLLOW-UP AND REVIEW RELATING TO THEINCLUSION OF CERTAIN DISCLOSURES IN RESEARCH REPORTS ISSUEDBY THE FIRM AS REQUIRED BY NYSE RULE 472(K)(1). THE FIRMCONSENTED TO THE IMPOSITION BY THE NYSE OF THE SANCTION OF ACENSURE AND A FINE IN THE AMOUNT OF $150,000.








FINE IN THE AMOUNT OF $150,000


Resolution:


Sanction Details: STIPULATION EXECUTED BY NYSE DIVISION OF ENFORCEMENT ANDRESPONDENT CONSENTED TO A FINDING: 1. VIOLATED NYSE RULE472(K)(1) IN THAT ON NUMEROUS OCCASIONS THE FIRM FAILED TOINCLUDE REQUIRED DISCLOSURES IN CERTAIN OF ITS PUBLISHEDRESEARCH REPORTS REGARDING: (I) NON-INVESTMENT BANKINGRELATED COMPENSATION AND SUBJECT COMPANY RELATIONSHIPS; AND(II) INVESTMENT BANKING SUBJECT COMPANY RELATIONSHIPS. 2.VIOLATED NYSE RULE 342 BY FAILING TO PROVIDE FOR APPROPRIATEPROCEDURES OF SUPERVISION AND CONTROL, AND ESTABLISH ASEPARATE SYSTEM OF FOLLOW-UP AND REVIEW RELATING TO THEINCLUSION OF CERTAIN DISCLOSURES IN RESEARCH REPORTS ISSUEDBY THE FIRM AS REQUIRED BY NYSE RULE 472(K)(1). THE FIRMCONSENTED TO THE IMPOSITION BY THE NYSE OF THE SANCTION OF ACENSURE AND A FINE IN THE AMOUNT OF $150,000.

Firm Statement THE FIRM DISCOVERED THAT DISCLOSURES HAD NOT BEEN UPDATED,SELF-REPORTED TO THE NYSE, FULLY COOPERATED WITH THE NYSE,REMEDIATED THE ISSUE AND ENHANCED ITS SUPERVISORYPROCEDURES. ALTHOUGH THE NOTED DISCLOSURES WERE MISSINGFROM SOME RESEARCH REPORTS, RELEVANT REPORTS CONTAINED ANINVESTMENT BANKING SERVICES DISCLOSURE AT THE UBS AG LEVEL.




i


Initiated By: MASSACHUSETTS


Allegations: THE DIVISION CHARGED UBS WITH VIOLATIONS OF CHAPTER 110A,SECTIONS 204(A)(2)(G) & 204(A)(2)(J), INVOLVING DISHONEST ANDUNETHICAL PRACTICES, FAILURE TO SUPERVISE, AND BOOKS ANDRECORDS VIOLATIONS. THESE VIOLATIONS WERE IN CONNECTION WITHUBS'S PROVISION OF GIFTS AND GRATUITIES TO HEDGE FUND ADVISERSWHO WERE LEASING OFFICE SPACE FROM UBS.










CEASE AND DESIST, CENSURE AND SUCH FURTHER ACTION AS DEEMEDJUST AND APPROPRIATE BY THE DIRECTOR OR HEARING OFFICER FORTHE PROTECTION OF INVESTORS.







Resolution:

Other Sanctions Ordered: IMPLEMENT UBS DISCLOSURE POLICY.INDEPENDENT COMPLIANCE CONSULTANT.

Sanction Details: $100,000.00 FINE.


Consent


Initiated By: MASSACHUSETTS, SECRETARY OF THE COMMONWEALTH, SECURITIESDIVISION







Allegations: THE DIVISION CHARGED UBS WITH VIOLATIONS OF CHAPTER 110A,SECTIONS 204(A)(2)(G) & 204(A)(2)(J), INVOLVING DISHONEST ANDUNETHICAL PRACTICES, FAILURE TO SUPERVISE, AND BOOKS ANDRECORDS VIOLATIONS. THESE VIOLATIONS WERE IN CONNECTION WITHUBS'S PROVISION OF GIFTS AND GRATUITIES TO HEDGE FUND ADVISERSWHO WERE LEASING OFFICE SPACE FROM UBS.








CEASE AND DESIST, CENSURE AND SUCH FURTHER ACTION AS DEEMEDJUST AND APPROPRIATE BY THE DIRECTOR OR HEARING OFFICER FORTHE PROTECTION OF INVESTORS.


Resolution:


Sanction Details: FINE $100,000.00UBS AGREED TO IMPLEMENT A DISCLOSURE POLICY WITH RESPECT TOINVESTMENT ADVISORS WHO HAVE A PRIME BROKERAGE AGREEMENTWITH UBS AND WHO LICENSE OFFICE SPACE FROM UBS INMASSACHUSETTS. UBS ALSO AGREED TO RETAIN AN INDEPENDENTCONSULTANT TO DEVELOP AND MONITOR ITS DISCLOSURE POLICY FOR A3 YEAR PERIOD.


Settled


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Initiated By: NASD





Allegations: SEC RULE 11AC1-4, NASD RULES 2110, 3010, 3220, 6955(A) - RESPONDENTFIRM FAILED TO ADJUST OPEN ORDERS. THE FINDINGS STATED THAT THEFIRM TRANSMITTED TO OATS REPORTS THAT CONTAINED INACCURATE,INCOMPLETE OR IMPROPERLY FORMATTED DATA. THE FINDINGS ALSOSTATED THAT THE FIRM FAILED TO DISPLAY IMMEDIATELY CUSTOMERLIMIT ORDERS IN NASDAQ SECURITIES IN ITS PUBLIC QUOTATION, WHENEACH ORDER WAS AT A PRICE THAT WOULD HAVE IMPROVED THE FIRM'SBID OR OFFER IN EACH SECURITY. THE FINDINGS ALSO INCLUDED THATTHE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TOTHE APPLICABLE SECURITIES LAWS, REGULATIONS, AND NASD RULESCONCERNING SEC RULES 605, 606 AND MAINTENANCE AND RETENTIONOF BOOKS AND RECORDS.












Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, UBS SECURITIES LLC.,CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS, THEREFORE, THE FIRM WAS CENSURED, FINED $27,500 ANDREQUIRED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURESCONCERNING SEC RULES 605, 606 AND MAINTENANCE AND RETENTIONOF BOOKS AND RECORDS.


No




Initiated By: NASD

Allegations: SEC RULE 11AC1-4, NASD RULES 2110, 3010, 3220, 6955(A) - RESPONDENTFIRM FAILED TO ADJUST 22 OPEN ORDERS. THE FINDINGS STATED THATTHE FIRM TRANSMITTED TO 36 OATS REPORTS THAT CONTAINEDINACCURATE, INCOMPLETE OR IMPROPERLY FORMATTED DATA. THEFINDINGS ALSO STATED THAT THE FIRM, IN FOUR INSTANCES, FAILED TODISPLAY IMMEDIATELY CUSTOMER LIMIT ORDERS IN NASDAQ SECURITIESIN ITS PUBLIC QUOTATION, WHEN EACH ORDER WAS AT A PRICE THATWOULD HAVE IMPROVED THE FIRM'S BID OR OFFER IN EACH SECURITY.THE FINDINGS ALSO INCLUDED THAT THE FIRM'S SUPERVISORY SYSTEMDID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH RESPECT TO THE APPLICABLE SECURITIESLAWS, REGULATIONS, AND NASD RULES CONCERNING SEC RULES 605,606 AND MAINTENANCE AND RETENTION OF BOOKS AND RECORDS.







Initiated By: NASD








Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, UBS SECURITIES LLC.,CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS, THEREFORE, THE FIRM WAS CENSURED, FINED $27,500 ANDREQUIRED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURESCONCERNING SEC RULES 605, 606 AND MAINTENANCE AND RETENTIONOF BOOKS AND RECORDS.




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Allegations: FAILURE TO COMPLY WITH ISE RULES RELATING TO P/A ORDERHANDLING, CONTINUOUS QUOTING, TRADE THROUGHS AND ORDERHANDLING.










AWC


Resolution:


Sanction Details: UBS SECURITIES CONSENTED TO THE FINE OF $30,000.00 FOR ORDERHANDLING VIOLATIONS, $10,000.00 FOR TRADE THROUGHS, $15,000.00FOR MISHANDLING P/A ORDERS AND $25,000.00 FOR QUOTATIONVIOLATIONS FOR A TOTAL FINE OF $80,000.00. UBS PAID SAID FINE ON JAN.19TH, 2007.

Firm Statement UBS SECURITIES CONSENTED TO THE FINE OF $30,000.00 FOR ORDERHANDLING VIOLATIONS, $10,000.00 FOR TRADE THROUGHS, $15,000.00FOR MISHANDLING P/A ORDERS AND $25,000.00 FOR QUOTATIONVIOLATIONS FOR A TOTAL FINE OF $80,000.00

THE ISE HAS MULTIPLE CASE NUMBERS FOR THIS MATTER-SEE BELOW:

2005-10;2005-137;2005-61;2005-60;2005-112;2005-156;2005-06;2005-136;2005-174;2006-32;2006-82;2006-130;2006-173.




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Allegations: NASD RULE 6955(A) - UBS SECURITIES LLC SUBMITTED TO OATS ORDERSTHAT CONTAINED INACCURATE, INCOMPLETE OR IMPROPERLYFORMATTED DATA; SUBMITTED TO OATS REPORTS AND EXECUTIONREPORTS WITH INACCURATE, INCOMPLETE OR IMPROPERLY FORMATTEDDATA; ERRONEOUSLY SUBMITTED TO OATS EXECUTION REPORTS FORORDERS IT ROUTED AWAY FOR HANDLING AND/OR EXECUTION; ANDSUBMITTED TO OATS REPORTS WITH RESPECT TO EQUITY SECURITIESTRADED ON THE NASDAQ STOCK MARKET THAT WERE NOT IN THEELECTRONIC FORM PRESCRIBED BY NASD AND WERE REPAIRABLE. THESUBJECT REPORTS WERE REJECTED BY THE OATS SYSTEM AND NOTICEOF SUCH REJECTION WAS MADE AVAILABLE TO THE FIRM ON THE OATSWEBSITE BUT THE FIRM DID NOT CORRECT OR REPLACE ANY OF THESUBJECT REPORTS.







Initiated By: NASD






Other Product Type(s): EQUITY SECURITIES


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $65,000 AND REQUIRED TOREPORT TO NASD THE EFFORTS IT HAS UNDERTAKEN TO IMPROVE OATSREPORTING AND SUPERVISION WITHIN 90 DAYS OF ACCEPTANCE OF THISAWC BY ODA OR THE NAC.


No




Allegations: NASD RULE 6955(A) - UBS SECURITIES LLC SUBMITTED TO OATS ORDERSTHAT CONTAINED INACCURATE, INCOMPLETE OR IMPROPERLYFORMATTED DATA; SUBMITTED TO OATS REPORTS AND EXECUTIONREPORTS WITH INACCURATE, INCOMPLETE OR IMPROPERLY FORMATTEDDATA; ERRONEOUSLY SUBMITTED TO OATS EXECUTION REPORTS FORORDERS IT ROUTED AWAY FOR HANDLING AND/OR EXECUTION; ANDSUBMITTED TO OATS REPORTS WITH RESPECT TO EQUITY SECURITIESTRADED ON THE NASDAQ STOCK MARKET THAT WERE NOT IN THEELECTRONIC FORM PRESCRIBED BY NASD AND WERE REPAIRABLE. THESUBJECT REPORTS WERE REJECTED BY THE OATS SYSTEM AND NOTICEOF SUCH REJECTION WAS MADE AVAILABLE TO THE FIRM ON THE OATSWEBSITE BUT THE FIRM DID NOT CORRECT OR REPLACE ANY OF THESUBJECT REPORTS.








Initiated By: NASD


Censure


FINE $65,000




Other Product Type(s): EQUITY SECURITIES

NASD RULE 6955(A) - UBS SECURITIES LLC SUBMITTED TO OATS ORDERSTHAT CONTAINED INACCURATE, INCOMPLETE OR IMPROPERLYFORMATTED DATA; SUBMITTED TO OATS REPORTS AND EXECUTIONREPORTS WITH INACCURATE, INCOMPLETE OR IMPROPERLY FORMATTEDDATA; ERRONEOUSLY SUBMITTED TO OATS EXECUTION REPORTS FORORDERS IT ROUTED AWAY FOR HANDLING AND/OR EXECUTION; ANDSUBMITTED TO OATS REPORTS WITH RESPECT TO EQUITY SECURITIESTRADED ON THE NASDAQ STOCK MARKET THAT WERE NOT IN THEELECTRONIC FORM PRESCRIBED BY NASD AND WERE REPAIRABLE. THESUBJECT REPORTS WERE REJECTED BY THE OATS SYSTEM AND NOTICEOF SUCH REJECTION WAS MADE AVAILABLE TO THE FIRM ON THE OATSWEBSITE BUT THE FIRM DID NOT CORRECT OR REPLACE ANY OF THESUBJECT REPORTS.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $65,000 AND REQUIRED TOREPORT TO NASD THE EFFORTS IT HAS UNDERTAKEN TO IMPROVE OATSREPORTING AND SUPERVISION WITHIN 90 DAYS OF ACCEPTANCE OF THISAWC BY ODA OR THE NAC.




i


Allegations: **1/3/07**STIPULATION OF FACTS AND CONSENT TO PENALTY FILED BYNYSE DIVISION OF ENFORCEMENT AND PENDING.CONSENTED TOFINDINGS:1. VIOLATED NYSE RULE 123C BY FAILING TO COMPLY WITHREQUIREMENTS GOVERNING THE ENTRY AND CANCELLATION OF MOCAND LOC ORDERS;2. VIOLATED NYSE RULE 342 BY FAILING TOREASONABLY SUPERVISE AND IMPLEMENT ADEQUATE CONTROLS,INCLUDING A SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW,REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULESAND POLICIES PERTAINING TO ODD-LOT ORDER ACTIVITY AND AUDITTRAIL REQUIREMENTS;3. VIOLATED NYSE RULE 132.30(10) ON NUMEROUSOCCASIONS BY SUBMITTING TRADES WITH INCORRECT ACCOUNT TYPEINDICATORS OR WITHOUT ACCOUNT TYPE INDICATORS FOR COMPARISONAND CLEARANCE;4. VIOLATED NYSE RULES 123(B) AND 440, ANDEXCHANGE ACT RULE 17A-4(B)(1) ON SIX OCCASIONS BY FAILING TOMAINTAIN A RECORD OF BROKERAGE ORDERS RECEIVED ON THE FLOOR;AND5. VIOLATED NYSE RULE 123(E) ON THIRTEEN OCCASIONS BYREPRESENTING OR EXECUTING ORDERS ON THE FLOOR OF THE NYSEWITHOUT FIRST RECORDING THE DETAILS OF THE ORDER IN ANELECTRONIC SYSTEM ON THE FLOOR.STIPULATED SANCTION:CENSURE AND FINE IN THE AMOUNT OF $95,000.











Docket/Case Number: HPD#07-10



**1/3/07**STIPULATION OF FACTS AND CONSENT TO PENALTY FILED BYNYSE DIVISION OF ENFORCEMENT AND PENDING.CONSENTED TOFINDINGS:1. VIOLATED NYSE RULE 123C BY FAILING TO COMPLY WITHREQUIREMENTS GOVERNING THE ENTRY AND CANCELLATION OF MOCAND LOC ORDERS;2. VIOLATED NYSE RULE 342 BY FAILING TOREASONABLY SUPERVISE AND IMPLEMENT ADEQUATE CONTROLS,INCLUDING A SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW,REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULESAND POLICIES PERTAINING TO ODD-LOT ORDER ACTIVITY AND AUDITTRAIL REQUIREMENTS;3. VIOLATED NYSE RULE 132.30(10) ON NUMEROUSOCCASIONS BY SUBMITTING TRADES WITH INCORRECT ACCOUNT TYPEINDICATORS OR WITHOUT ACCOUNT TYPE INDICATORS FOR COMPARISONAND CLEARANCE;4. VIOLATED NYSE RULES 123(B) AND 440, ANDEXCHANGE ACT RULE 17A-4(B)(1) ON SIX OCCASIONS BY FAILING TOMAINTAIN A RECORD OF BROKERAGE ORDERS RECEIVED ON THE FLOOR;AND5. VIOLATED NYSE RULE 123(E) ON THIRTEEN OCCASIONS BYREPRESENTING OR EXECUTING ORDERS ON THE FLOOR OF THE NYSEWITHOUT FIRST RECORDING THE DETAILS OF THE ORDER IN ANELECTRONIC SYSTEM ON THE FLOOR.STIPULATED SANCTION:CENSURE AND FINE IN THE AMOUNT OF $95,000.


Resolution:


Sanction Details: **1/16/07**DECISION NO. 07-10 ISSUED BY NYSE HEARING BOARD.DECISION:VIOLATED NYSE RULE 123C BY FAILING TO COMPLY WITHREQUIREMENTS GOVERNING ENTRY AND CANCELLATION OF MOC ANDLOC ORDERS; VIOLATED NYSE RULE 342 BY FAILING TO REASONABLYSUPERVISE AND IMPLEMENT ADEQUATE CONTROLS, INCLUDINGSEPARATE SYSTEM OF FOLLOW-UP AND REVIEW, REASONABLY DESIGNEDTO ACHIEVE COMPLIANCE WITH NYSE RULES AND POLICIES PERTAININGTO ODD-LOT ORDER ACTIVITY AND AUDIT TRAIL REQUIREMENTS;VIOLATED NYSE RULE 132.30(10) BY SUBMITTING TRADES WITHINCORRECT ACCOUNT TYPE INDICATORS OR WITHOUT ACCOUNT TYPEINDICATORS FOR COMPARISON AND CLEARANCE; VIOLATED NYSE RULES123(B) AND 440, AND EXCHANGE ACT RULE 17A-4(B)(1) BY FAILING TOMAINTAIN RECORD OF BROKERAGE ORDERS RECEIVED ON FLOOR;VIOLATED NYSE RULE 123(E) BY REPRESENTING OR EXECUTING ORDERSON FLOOR OF NYSE WITHOUT FIRST RECORDING DETAILS OF ORDER INELECTRONIC SYSTEM ON FLOOR. CONSENTED TO A CENSURE AND A$95,000 FINE.


Decision






**1/16/07**DECISION NO. 07-10 ISSUED BY NYSE HEARING BOARD.DECISION:VIOLATED NYSE RULE 123C BY FAILING TO COMPLY WITHREQUIREMENTS GOVERNING ENTRY AND CANCELLATION OF MOC ANDLOC ORDERS; VIOLATED NYSE RULE 342 BY FAILING TO REASONABLYSUPERVISE AND IMPLEMENT ADEQUATE CONTROLS, INCLUDINGSEPARATE SYSTEM OF FOLLOW-UP AND REVIEW, REASONABLY DESIGNEDTO ACHIEVE COMPLIANCE WITH NYSE RULES AND POLICIES PERTAININGTO ODD-LOT ORDER ACTIVITY AND AUDIT TRAIL REQUIREMENTS;VIOLATED NYSE RULE 132.30(10) BY SUBMITTING TRADES WITHINCORRECT ACCOUNT TYPE INDICATORS OR WITHOUT ACCOUNT TYPEINDICATORS FOR COMPARISON AND CLEARANCE; VIOLATED NYSE RULES123(B) AND 440, AND EXCHANGE ACT RULE 17A-4(B)(1) BY FAILING TOMAINTAIN RECORD OF BROKERAGE ORDERS RECEIVED ON FLOOR;VIOLATED NYSE RULE 123(E) BY REPRESENTING OR EXECUTING ORDERSON FLOOR OF NYSE WITHOUT FIRST RECORDING DETAILS OF ORDER INELECTRONIC SYSTEM ON FLOOR. CONSENTED TO A CENSURE AND A$95,000 FINE.

Regulator Statement **2/16/07**DECISION BECAME FINAL AS OF THE CLOSE OF BUSINESS ONFEBRUARY 12, 2007.CONTACT: PEGGY GERMINO 212-656-8450


Initiated By: NYSE REGULATION, INC. DIVISION OF ENFORCEMENT








Allegations: NYSE REGULATION ALLEGED THAT: UBS SECURITIES LLC VIOLATED NYSERULE 123C REGARDING COMPLIANCE WITH REQUIREMENTS GOVERNINGENTRY AND CANCELLATION OF MOC AND LOC ORDERS; VIOLATED NYSERULE 342 WITH RESPECT TO THE SUPERVISION AND IMPLEMENTATION OFADEQUATE CONTROLS, INCLUDING A SEPARATE SYSTEM OF FOLLOW-UPAND REVIEW, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHNYSE RULES AND POLICIES CONCERNING ODD-LOT ORDER ACTIVITY ANDAUDIT TRAIL REQUIREMENTS; VIOLATED NYSE RULE132.30(10) WITHRESPECT TO THE SUBMISSION OF TRADES WITH INCORRECT ACCOUNTTYPE INDICATORS OR WITHOUT ACCOUNT TYPE INDICATORS FORCOMPARISON AND CLEARANCE; VIOLATED NYSE RULES 123(B) AND 440,AND EXCHANGE ACT RULE 17A-4(B)(1) CONCERNING THE MAINTENANCEOF A RECORD OF BROKERAGE ORDERS RECEIVED ON THE FLOOR OFTHE NYSE; AND VIOLATED NYSE RULE 123(E) REGARDING THEREPRESENTAITON OR EXECUTION OF ORDERS ON THE FLOOR OF THENYSE WITHOUT FIRST RECORDING DETAILS OF THE ORDERS IN THEELECTRONIC SYSTEM ON THE FLOOR OF THE NYSE.








Resolution:


Sanction Details: ON 1/16/07 THE DECISION WAS ISSUED BY THE NYSE HEARING BOARDTHAT UBS: VIOLATED NYSE RULE 123C REGARDING COMPLIANCE WITHREQUIREMENTS GOVERNING ENTRY AND CANCELLATION OF MOC ANDLOC ORDERS; VIOLATED NYSE RULE 342 WITH RESPECT TO THESUPERVISION AND IMPLEMENTATION OF ADEQUATE CONTROLS,INCLUDING A SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW,REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULESAND POLICIES CONCERNING ODD-LOT ORDER ACTIVITY AND AUDIT TRAILREQUIREMENTS; VIOLATED NYSE RULE 132.30(10) WITH RESPECT TO THESUBMISSION OF TRADES WITH INCORRECT ACCOUNT TYPE INDICATORSOR WITHOUT ACCOUNT TYPE INDICATORS FOR COMPARISON ANDCLEARANCE; VIOLATED NYSE RULES 123(B) AND 440, AND EXCHANGE ACTRULE 17A-4(B)(1) CONCERNING THE MAINTENANCE OF A RECORD OFBROKERAGE ORDERS RECEIVED ON THE FLOOR OF THE NYSE; ANDVIOLATED NYSE RULE 123(E) REGARDING THE REPRESENTAITON OREXECUTION OF ORDERS ON THE FLOOR OF THE NYSE WITHOUT FIRSTRECORDING DETAILS OF THE ORDERS IN THE ELECTRONIC SYSTEM ONTHE FLOOR OF THE NYSE. CONSENTED TO A CENSURE AND A $95,000.00FINE.

Firm Statement UBS SETTLED THIS MATTER WITHOUT ADMITTING OR DENYING NYSEREGULATIONS'S ALLEGATIONS. IN DETERMINING THE SANCTION, NYSEREGULATION TOOK INTO ACCOUNT CERTAIN MITIGATING FACTORS ANDREMEDIAL STEPS TAKEN BY THE FIRM TO ENHANCE ITS COMPLIANCEWITH RELEVANT RULES AND POLICIES. FOR EXAMPLE, THE SETTLEMENTNOTES THAT UBS HAD TAKEN STEPS TO MINIMIZE THE POTENTIAL FORFUTURE MOC/LOC VIOLATIONS; UBS HAD DISTRIBUTED A COMPLIANCEBULLETIN REGARDING ODD-LOT TRADING WHICH REFERENCED THEAPPROPRIATE NYSE INFO MEMOS AND RULES; UBS DEVELOPED ANDIMPLEMENTED AN ODD-LOT SURVEILLANCE SYSTEM; AND REGARDINGTHE ACCOUNT TYPE INDICATOR ISSUES, UBS HAD, AS APPROPRIATECORRECTED CERTAIN SOFTWARE ISSUES, PROVIDED ADDITIONALTRAINING TO ITS STAFF, AND/OR IMPLEMENTED SURVEILLANCE TOOLS TOIMPROVE ITS COMPLINACE RATE.




i







Initiated By: NASD







Allegations: SEC RULES 11AC1-4, 17A-4, NASD RULES 2110, 3110, 6955(A) - UBSSECURITIES LLC FAILED TO DISPLAY IMMEDIATELY CUSTOMER LIMITORDERS IN NASDAQ SECURITIES IN ITS PUBLIC QUOTATION WHEN EACHSUCH ORDER WAS AT A PRICE THAT WOULD HAVE IMPROVED THE FIRM'SBID OR OFFER AND THE NATIONAL BEST BID OR OFFER FOR EACH SUCHSECURITY AND THE SIZE OF THE ORDER REPRESENTED MORE THAN A DEMINIMIS CHANGE IN RELATION TO THE SIZE ASSOCIATED WITH THE FIRM'SBID OR OFFER IN EACH SUCH SECURITY; FAILED TO REPORT TO OATS ANEXECUTION REPORT FOR OATS REPORTABLE ORDERS; FAILED TOPRESERVE FOR A PERIOD OF NOT LESS THAN THREE YEARS, THE FIRSTTWO IN AN ACCESSIBLE PLACE, THE MEMORANDUM OF BROKERAGEORDERS.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, UBS SECURITIESCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $22,000.


No










Initiated By: NASD


Censure


FINE OF $22,000





Allegations: SEC RULES 11AC1-4, 17A-4, NASD CONDUCT RULES 2110, 3110, NASDMARKETPLACE RULE 6955(A) - UBS SECURITIES LLC FAILED TO DISPLAYIMMEDIATELY 42 CUSTOMER LIMIT ORDERS IN NASDAQ SECURITIES IN ITSPUBLIC QUOTATION WHEN EACH SUCH ORDER WAS AT A PRICE THATWOULD HAVE IMPROVED THE FIRM'S BID OR OFFER OR WHEN THEORDER WAS PRICED EQUAL TO THE FIRM'S BID OR OFFER AND THENATIONAL BEST BID OR OFFER FOR EACH SUCH SECURITY AND THE SIZEOF THE ORDER REPRESENTED MORE THAN A DE MINIMIS CHANGE INRELATION TO THE SIZE ASSOCIATED WITH THE FIRM'S BID OR OFFER INEACH SUCH SECURITY; FAILED TO REPORT TO OATS AN EXECUTIONREPORT FOR 54 OATS REPORTABLE ORDERS; FAILED TO PRESERVE FORA PERIOD OF NOT LESS THAN THREE YEARS, THE FIRST TWO IN ANACCESSIBLE PLACE, THE MEMORANDUM OF EIGHT BROKERAGE ORDERS.



Resolution:






i







Initiated By: NASD






Other Product Type(s): OTCBB

Allegations: NASD RULES 2110, 6954(C)(2)(A), 6954 (C)(2)(B), 6954(D)(3), 6955(A) - UBSSECURITIES, LLC TRANSMITTED TO OATS REPORTS THAT CONTAINEDINACCURATE, INCOMPLETE, OR IMPROPERLY FORMATTED DATA:SPECIFICALLY, THE FIRM FAILED PROPERLY TO REPORT ROUTED IDNUMBERS, INCORRECTLY USED THE "R" REPORTING EXCEPTION CODE,AND FAILED PROPERLY TO REPORT BRANCH SEQUENCE NUMBERS.



Resolution:




No












Initiated By: NASD




CENSURE




Other Product Type(s): OTCBB



Resolution:






i


Allegations: **1/27/06**STIPULATION AND CONSENT TO PENALTY EXECUTED BY NYSEDIVISION OF ENFORCEMENT AND RESPONDENT, AND PENDING.CONSENTED TO FINDINGS: WITHOUT ADMITTING OR DENYING GUILT,CONSENTED TO FINDINGS: THAT THE FIRM VIOLATED NYSE RULE 452, INTHAT, ON ONE OR MORE OCCASIONS, THE FIRM SUBMITTED VOTES FORMORE SHARES THAN IT WAS ENTITLED TO VOTE IN PROXY MATTERS;THAT THE FIRM VIOLATED NYSE RULE 476(A)(6) THAT THE FIRM ENGAGEDIN CONDUCT INCONSISTENT WITH JUST AND EQUITABLE PRINCIPLES OFTRADE IN THAT THE FIRM: (A) FAILED TO IMPLEMENT ADEQUATE POLICIESAND PROCEDURES TO ACCURATELY ADJUST ITS RECORD OF STOCKOWNERSHIP TO ENSURE THAT IT DID NOT VOTE MORE SHARES THAN ITWAS ENTITLED TO VOTE IN PROXY MATTERS; AND (B) ON NUMEROUSOCCASIONS, TENDERED MORE VOTES THAN IT WAS ENTITLED TO VOTE INPROXY MATTERS; THAT THE FIRM VIOLATED NYSE RULE 401 BY FAILINGTO ADHERE TO PRINCIPLES OF GOOD BUSINESS PRACTICES IN THAT THEFIRM FAILED, ON NUMEROUS OCCASIONS, TO RECONCILE ITS RECORDOF STOCK OWNERSHIP SO AS TO ENSURE THAT IT DID NOT SUBMITVOTES FOR MORE SHARES THAN IT WAS ENTITLED TO VOTE IN PROXYMATTERS; THAT THE FIRM VIOLATED NYSE RULE 342 IN THAT THE FIRMFAILED TO (A) SUPERVISE PROXY OPERATIONS TO PREVENT OVER-VOTING; (B) PROVIDE FOR AND IMPLEMENT WRITTEN PROCEDURES FORPROXY OPERATIONS AND SUPERVISION OF THE PROXY FUNCTION; AND(C) PROVIDE FOR AND IMPLEMENT WRITTEN PROCEDURES FORSUPERVISION OF ITS PROXY SERVICE PROVIDER; AND THAT THE FIRMVIOLATED NYSE RULE 476(A)(10) IN THAT THE FIRM SUPPLIED ONE ORMORE INACCURATE RESPONSES ON A SURVEY DIRECTED TO IT BY THENYSE. CONSENTED TO SANCTION: THE IMPOSITION BY THE EXCHANGEOF THE PENALTY OF A CENSURE AND A FINE OF $600,000.











Docket/Case Number: HPD# 06-55



**1/27/06**STIPULATION AND CONSENT TO PENALTY EXECUTED BY NYSEDIVISION OF ENFORCEMENT AND RESPONDENT, AND PENDING.CONSENTED TO FINDINGS: WITHOUT ADMITTING OR DENYING GUILT,CONSENTED TO FINDINGS: THAT THE FIRM VIOLATED NYSE RULE 452, INTHAT, ON ONE OR MORE OCCASIONS, THE FIRM SUBMITTED VOTES FORMORE SHARES THAN IT WAS ENTITLED TO VOTE IN PROXY MATTERS;THAT THE FIRM VIOLATED NYSE RULE 476(A)(6) THAT THE FIRM ENGAGEDIN CONDUCT INCONSISTENT WITH JUST AND EQUITABLE PRINCIPLES OFTRADE IN THAT THE FIRM: (A) FAILED TO IMPLEMENT ADEQUATE POLICIESAND PROCEDURES TO ACCURATELY ADJUST ITS RECORD OF STOCKOWNERSHIP TO ENSURE THAT IT DID NOT VOTE MORE SHARES THAN ITWAS ENTITLED TO VOTE IN PROXY MATTERS; AND (B) ON NUMEROUSOCCASIONS, TENDERED MORE VOTES THAN IT WAS ENTITLED TO VOTE INPROXY MATTERS; THAT THE FIRM VIOLATED NYSE RULE 401 BY FAILINGTO ADHERE TO PRINCIPLES OF GOOD BUSINESS PRACTICES IN THAT THEFIRM FAILED, ON NUMEROUS OCCASIONS, TO RECONCILE ITS RECORDOF STOCK OWNERSHIP SO AS TO ENSURE THAT IT DID NOT SUBMITVOTES FOR MORE SHARES THAN IT WAS ENTITLED TO VOTE IN PROXYMATTERS; THAT THE FIRM VIOLATED NYSE RULE 342 IN THAT THE FIRMFAILED TO (A) SUPERVISE PROXY OPERATIONS TO PREVENT OVER-VOTING; (B) PROVIDE FOR AND IMPLEMENT WRITTEN PROCEDURES FORPROXY OPERATIONS AND SUPERVISION OF THE PROXY FUNCTION; AND(C) PROVIDE FOR AND IMPLEMENT WRITTEN PROCEDURES FORSUPERVISION OF ITS PROXY SERVICE PROVIDER; AND THAT THE FIRMVIOLATED NYSE RULE 476(A)(10) IN THAT THE FIRM SUPPLIED ONE ORMORE INACCURATE RESPONSES ON A SURVEY DIRECTED TO IT BY THENYSE. CONSENTED TO SANCTION: THE IMPOSITION BY THE EXCHANGEOF THE PENALTY OF A CENSURE AND A FINE OF $600,000.


Resolution:


Sanction Details: **4/18/06** DECISION 05-66 ISSUED BY NYSE HEARING PANELVIOLATIONS FOUND: VIOLATED NYSE RULE 452 BY SUBMITTING VOTESFOR MORE SHARES THAN IT WAS ENTITLED TO VOTE IN PROXY MATTERS;FAILED TO IMPLEMENT POLICIES AND PROCEDURES TO ACCURATELYADJUST ITS RECORD OF STOCK OWNERSHIP TO ENSURE THAT IT DID NOTVOTE MORE SHARES THAN IT WAS ENTITLED TO VOTE IN PROXYMATTERS; TENDERED MORE VOTES THAT IT WAS ENTITLED TO VOTE INPROXY MATTERS; VIOLATED NYSE RULE 401 BY FAILING TO RECONCILEITS RECORD OF STOCK OWNERSHIP TO ENSURE THAT IT DID NOT SUBMITVOTES FOR MORE SHARES THAN IT WAS ENTITLED TO VOTE IN PROXYMATTERS; VIOLATED NYSE RULE 342 BY FAILING TO SUPERVISE PROXYOPERATIONS TO PREVENT OVER-VOTING AND FAILING TO PROVIDE FORAND IMPLEMENT WRITTEN PROCEDURES FOR PROXY OPERATIONS ANDSUPERVISION OF PROXY FUNCTION AND PROXY SERVICE PROVIDER;VIOLATED NYSE RULE 476(A)(10) BY SUPPLYING INACCURATE RESPONSESON NYSE SURVEY. SANCTION: THE HEARING PANEL IMPOSED THESANCTION, CONSENTED TO BY UBS SECURITIES LLC, OF A CENSURE ANDA FINE OF $600,000.


Decision





www.finra.org/brokercheck User Guidance**4/18/06** DECISION 05-66 ISSUED BY NYSE HEARING PANELVIOLATIONS FOUND: VIOLATED NYSE RULE 452 BY SUBMITTING VOTESFOR MORE SHARES THAN IT WAS ENTITLED TO VOTE IN PROXY MATTERS;FAILED TO IMPLEMENT POLICIES AND PROCEDURES TO ACCURATELYADJUST ITS RECORD OF STOCK OWNERSHIP TO ENSURE THAT IT DID NOTVOTE MORE SHARES THAN IT WAS ENTITLED TO VOTE IN PROXYMATTERS; TENDERED MORE VOTES THAT IT WAS ENTITLED TO VOTE INPROXY MATTERS; VIOLATED NYSE RULE 401 BY FAILING TO RECONCILEITS RECORD OF STOCK OWNERSHIP TO ENSURE THAT IT DID NOT SUBMITVOTES FOR MORE SHARES THAN IT WAS ENTITLED TO VOTE IN PROXYMATTERS; VIOLATED NYSE RULE 342 BY FAILING TO SUPERVISE PROXYOPERATIONS TO PREVENT OVER-VOTING AND FAILING TO PROVIDE FORAND IMPLEMENT WRITTEN PROCEDURES FOR PROXY OPERATIONS ANDSUPERVISION OF PROXY FUNCTION AND PROXY SERVICE PROVIDER;VIOLATED NYSE RULE 476(A)(10) BY SUPPLYING INACCURATE RESPONSESON NYSE SURVEY. SANCTION: THE HEARING PANEL IMPOSED THESANCTION, CONSENTED TO BY UBS SECURITIES LLC, OF A CENSURE ANDA FINE OF $600,000.

Regulator Statement **6/9/06** THE DECISION IS NOW FINAL AND EFFECTIVE IMMEDIATELY.CONTACT: PEGGY GERMINO 212-656-8450.


Allegations: **1/27/06**STIPULATION AND CONSENT TO PENALTY EXECUTED BY NYSEDIVISION OF ENFORCEMENT AND RESPONDENT, AND PENDING.CONSENTED TO FINDINGS: WITHOUT ADMITTING OR DENYING GUILT,CONSENTED TO FINDINGS: THAT THE FIRM VIOLATED NYSE RULE 452, INTHAT, ON ONE OR MORE OCCASIONS, THE FIRM SUBMITTED VOTES FORMORE SHARES THAN IT WAS ENTITLED TO VOTE IN PROXY MATTERS;THAT THE FIRM VIOLATED NYSE RULE 476(A)(6) THAT THE FIRM ENGAGEDIN CONDUCT INCONSISTENT WITH JUST AND EQUITABLE PRINCIPLES OFTRADE IN THAT THE FIRM: (A) FAILED TO IMPLEMENT ADEQUATE POLICIESAND PROCEDURES TO ACCURATELY ADJUST ITS RECORD OF STOCKOWNERSHIP TO ENSURE THAT IT DID NOT VOTE MORE SHARES THAN ITWAS ENTITLED TO VOTE IN PROXY MATTERS; AND (B) ON NUMEROUSOCCASIONS, TENDERED MORE VOTES THAN IT WAS ENTITLED TO VOTE INPROXY MATTERS; THAT THE FIRM VIOLATED NYSE RULE 401 BY FAILINGTO ADHERE TO PRINCIPLES OF GOOD BUSINESS PRACTICES IN THAT THEFIRM FAILED, ON NUMEROUS OCCASIONS, TO RECONCILE ITS RECORDOF STOCK OWNERSHIP SO AS TO ENSURE THAT IT DID NOT SUBMITVOTES FOR MORE SHARES THAN IT WAS ENTITLED TO VOTE IN PROXYMATTERS; THAT THE FIRM VIOLATED NYSE RULE 342 IN THAT THE FIRMFAILED TO (A) SUPERVISE PROXY OPERATIONS TO PREVENT OVER-VOTING; (B) PROVIDE FOR AND IMPLEMENT WRITTEN PROCEDURES FORPROXY OPERATIONS AND SUPERVISION OF THE PROXY FUNCTION; AND(C) PROVIDE FOR AND IMPLEMENT WRITTEN PROCEDURES FORSUPERVISION OF ITS PROXY SERVICE PROVIDER; AND THAT THE FIRMVIOLATED NYSE RULE 476(A)(10) IN THAT THE FIRM SUPPLIED ONE ORMORE INACCURATE RESPONSES ON A SURVEY DIRECTED TO IT BY THENYSE. CONSENTED TO SANCTION: THE IMPOSITION BY THE EXCHANGEOF THE PENALTY OF A CENSURE AND A FINE OF $600,000.











CENSURE





**1/27/06**STIPULATION AND CONSENT TO PENALTY EXECUTED BY NYSEDIVISION OF ENFORCEMENT AND RESPONDENT, AND PENDING.CONSENTED TO FINDINGS: WITHOUT ADMITTING OR DENYING GUILT,CONSENTED TO FINDINGS: THAT THE FIRM VIOLATED NYSE RULE 452, INTHAT, ON ONE OR MORE OCCASIONS, THE FIRM SUBMITTED VOTES FORMORE SHARES THAN IT WAS ENTITLED TO VOTE IN PROXY MATTERS;THAT THE FIRM VIOLATED NYSE RULE 476(A)(6) THAT THE FIRM ENGAGEDIN CONDUCT INCONSISTENT WITH JUST AND EQUITABLE PRINCIPLES OFTRADE IN THAT THE FIRM: (A) FAILED TO IMPLEMENT ADEQUATE POLICIESAND PROCEDURES TO ACCURATELY ADJUST ITS RECORD OF STOCKOWNERSHIP TO ENSURE THAT IT DID NOT VOTE MORE SHARES THAN ITWAS ENTITLED TO VOTE IN PROXY MATTERS; AND (B) ON NUMEROUSOCCASIONS, TENDERED MORE VOTES THAN IT WAS ENTITLED TO VOTE INPROXY MATTERS; THAT THE FIRM VIOLATED NYSE RULE 401 BY FAILINGTO ADHERE TO PRINCIPLES OF GOOD BUSINESS PRACTICES IN THAT THEFIRM FAILED, ON NUMEROUS OCCASIONS, TO RECONCILE ITS RECORDOF STOCK OWNERSHIP SO AS TO ENSURE THAT IT DID NOT SUBMITVOTES FOR MORE SHARES THAN IT WAS ENTITLED TO VOTE IN PROXYMATTERS; THAT THE FIRM VIOLATED NYSE RULE 342 IN THAT THE FIRMFAILED TO (A) SUPERVISE PROXY OPERATIONS TO PREVENT OVER-VOTING; (B) PROVIDE FOR AND IMPLEMENT WRITTEN PROCEDURES FORPROXY OPERATIONS AND SUPERVISION OF THE PROXY FUNCTION; AND(C) PROVIDE FOR AND IMPLEMENT WRITTEN PROCEDURES FORSUPERVISION OF ITS PROXY SERVICE PROVIDER; AND THAT THE FIRMVIOLATED NYSE RULE 476(A)(10) IN THAT THE FIRM SUPPLIED ONE ORMORE INACCURATE RESPONSES ON A SURVEY DIRECTED TO IT BY THENYSE. CONSENTED TO SANCTION: THE IMPOSITION BY THE EXCHANGEOF THE PENALTY OF A CENSURE AND A FINE OF $600,000.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING GUILT, THE FIRM CONSENTS TO:A. FINDINGS BY THE HEARING PANEL THAT THE FIRM:

1. VIOLATED NYSE RULE 452, IN THAT, ON ONE OR MORE OCCASIONS, THEFIRM SUBMITTED VOTES FOR MORE SHARES THAN IT WAS ENTITLED TOVOTE IN PROXY MATTERS.

2. VIOLATED NYSE RULE 476(A)(6) THAT THE FIRM ENGAGED IN CONDUCTINCONSISTENT WITH JUST AND EQUITABLE PRINCIPLES OF TRADE INTHAT THE FIRM:(A) FAILED TO IMPLEMENT ADEQUATE POLICIES AND PROCEDURES TOACCURATELY ADJUST ITS RECORD OF STOCK OWNERSHIP TO ENSURETHAT IT DID NOT VOTE MORE SHARES THAN IT WAS ENTITLED TO VOTE INPROXY MATTERS; AND(B) ON NUMEROUS OCCASIONS, TENDERED MORE VOTES THAN IT WASENTITLED TO VOTE IN PROXY MATTERS.

3. VIOLATED NYSE RULE 401 BY FAILING TO ADHERE TO PRINCIPLES OFGOOD BUSINESS PRACTICES IN THAT THE FIRM FAILED, ON NUMEROUSOCCASIONS, TO RECONCILE ITS RECORD OF STOCK OWNERSHIP SO ASTO ENSURE THAT IT DIDNOT SUBMIT VOTES FOR MORE SHARES THAN IT WAS ENTITLED TO VOTEIN PROXY MATTERS.

4. VIOLATED NYSE RULE 342 IN THAT THE FIRM FAILED TO:(A) SUPERVISE PROXY OPERATIONS TO PREVENT OVER-VOTING;(B) PROVIDE FOR AND IMPLEMENT WRITTEN PROCEDURES FOR PROXYOPERATIONS AND SUPERVISION OF THE PROXY FUNCTION; AND(C) PROVIDE FOR AND IMPLEMENT WRITTEN PROCEDURES FORSUPERVISION OF ITS PROXY SERVICE PROVIDER.

5. VIOLATED NYSE RULE 476(A)(10) IN THAT THE FIRM SUPPLIED ONE ORMORE INACCURATE RESPONSES ON A SURVEY DIRECTED TO IT BY THENYSE.

B. THE IMPOSITION BY THE NYSE OF:1. A CENSURE; AND2. A FINE OF $600,000.


Settled






WITHOUT ADMITTING OR DENYING GUILT, THE FIRM CONSENTS TO:A. FINDINGS BY THE HEARING PANEL THAT THE FIRM:

1. VIOLATED NYSE RULE 452, IN THAT, ON ONE OR MORE OCCASIONS, THEFIRM SUBMITTED VOTES FOR MORE SHARES THAN IT WAS ENTITLED TOVOTE IN PROXY MATTERS.

2. VIOLATED NYSE RULE 476(A)(6) THAT THE FIRM ENGAGED IN CONDUCTINCONSISTENT WITH JUST AND EQUITABLE PRINCIPLES OF TRADE INTHAT THE FIRM:(A) FAILED TO IMPLEMENT ADEQUATE POLICIES AND PROCEDURES TOACCURATELY ADJUST ITS RECORD OF STOCK OWNERSHIP TO ENSURETHAT IT DID NOT VOTE MORE SHARES THAN IT WAS ENTITLED TO VOTE INPROXY MATTERS; AND(B) ON NUMEROUS OCCASIONS, TENDERED MORE VOTES THAN IT WASENTITLED TO VOTE IN PROXY MATTERS.

3. VIOLATED NYSE RULE 401 BY FAILING TO ADHERE TO PRINCIPLES OFGOOD BUSINESS PRACTICES IN THAT THE FIRM FAILED, ON NUMEROUSOCCASIONS, TO RECONCILE ITS RECORD OF STOCK OWNERSHIP SO ASTO ENSURE THAT IT DIDNOT SUBMIT VOTES FOR MORE SHARES THAN IT WAS ENTITLED TO VOTEIN PROXY MATTERS.

4. VIOLATED NYSE RULE 342 IN THAT THE FIRM FAILED TO:(A) SUPERVISE PROXY OPERATIONS TO PREVENT OVER-VOTING;(B) PROVIDE FOR AND IMPLEMENT WRITTEN PROCEDURES FOR PROXYOPERATIONS AND SUPERVISION OF THE PROXY FUNCTION; AND(C) PROVIDE FOR AND IMPLEMENT WRITTEN PROCEDURES FORSUPERVISION OF ITS PROXY SERVICE PROVIDER.

5. VIOLATED NYSE RULE 476(A)(10) IN THAT THE FIRM SUPPLIED ONE ORMORE INACCURATE RESPONSES ON A SURVEY DIRECTED TO IT BY THENYSE.

B. THE IMPOSITION BY THE NYSE OF:1. A CENSURE; AND2. A FINE OF $600,000.

Firm Statement THE FIRM HAS SUBSCRIBED TO ADP'S OVERVOTING SERVICE, WHICHHIGHLIGHTS OVERVOTING SITUATIONS PRIOR TO PROXY SUBMISSIONAND REVISED ITS PROCEDURES TO FURTHER ADDRESS NOTEDDEFICIENCIES.BY LETTER DATED APRIL 27 TO UBS SECURITIES LLC, NYSE REG. ISSUEDITS DECISION ON THIS MATTER. AS NO PERSON OR BODY REQUESTED AREVIEW, THE DECISION BECAME FINAL 25 DAYS AFTER NOTICE OF THEHEARING PANEL'S DECISION. ON JULY 7, UBS RECEIVED A SECOND U6NOTING THAT AS OF JUNE 9, 2006, THE DECISION IS NOW FINAL ANDEFFECTIVE IMMEDIATELY WITH A REFERENCE TO CONTACT PEGGYGERMINO 212-656-8450.


i


Initiated By: NASD


Docket/Case Number: E112004018901



Allegations: NASD CONDUCT RULES 2711(H)(2) AND 2110; RESPONDENT DISSEMINATEDAPPROXIMATELY 170 RESEARCH REPORTS TO ITS CLIENTS THAT FAILEDTO HAVE REQUIRED DISCLOSURES.






https://www.finra.org/rules-guidance/oversight-enforcement/finra-disciplinary-actions?search=E112004018901






Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, RESPONDENTMEMBER FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THEENTRY OF FINDINGS; THEREFORE, FIRM IS CENSURED AND FINED $10,000.


No




Initiated By: NASD





Docket/Case Number: E112004018901



Allegations: NASD CONDUCT RULES 2711(H)(2) AND 2110; RESPONDENT DISSEMINATEDAPPROXIMATELY 170 RESEARCH REPORTS TO ITS CLIENTS THAT FAILEDTO HAVE REQUIRED DISCLOSURES.






https://www.finra.org/rules-guidance/oversight-enforcement/finra-disciplinary-actions?search=E112004018901



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, RESPONDENTMEMBER FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THEENTRY OF FINDINGS; THEREFORE, FIRM IS CENSURED AND FINED $10,000

Firm Statement IN DETERMINING THE AMOUNT OF THE FINE, THE NASD TOOK INTOACCOUNT THE FACT THAT, BEFORE THE STAFF COMMENCED THEEXAMINATION, THE FIRM SELF REPORTED THE DISCLOSURE VIOLATIONSTO ITS DESIGNATED EXAMINING AUTHORITY AND IMPLEMENTEDDEMONSTRABLE CORRECTIVE ACTIONS.




i



Allegations: **9/28/05**STIPULATION AND CONSENT TO PENALTY FILED BY NYSEDIVISION OF ENFORCEMENT AND PENDING CONSENTED TO FINDINGS:1.VIOLATED EXCHANGE RULE 410A BY FAILING TO SUBMIT ACCURATETRADING INFORMATION THROUGH THE SUBMISSION OF ELECTRONICBLUE SHEETS IN RESPONSE TO ONE OR MORE REQUESTS FOR SUCHINFORMATION BY THE EXCHANGE;2.VIOLATED EXCHANGE RULE 401 BYFAILING TO ADHERE TO THE PRINCIPLES OF GOOD BUSINESS PRACTICEIN THE CONDUCT OF THEIR BUSINESS AFFAIRS IN THAT IT SUBMITTEDINACCURATE TRADING INFORMATION ON ELECTRONIC BLUE SHEETS INRESPONSE TO ONE OR MORE REQUESTS FOR SUCH INFORMATION BYTHE EXCHANGE; AND 3.VIOLATED EXCHANGE RULES 342 BY FAILING TOESTABLISH AND MAINTAIN APPROPRIATE SYSTEMS AND PROCEDURESFOR THE SUPERVISION AND CONTROL OF AREAS RESPONSIBLE FORCOMPLYING WITH ELECTRONIC BLUE SHEET REPORTINGREQUIREMENTS, AND FAILED TO ESTABLISH A SEPARATE SYSTEM OFFOLLOW-UP AND REVIEW TO REASONABLY ENSURE COMPLIANCE WITHEXCHANGE RULES RELATING TO THE PREPARATION AND SUBMISSION OFELECTRONIC BLUE SHEETS.STIPULATED SANCTION: THE IMPOSITION BY THE EXCHANGE OF ACENSURE, A $500,000 FINE AND A REQUIREMENT THAT RESPONDENT WILLCONDUCT A VALIDATION OF ALL REQUIRED BLUE SHEET DATA ELEMENTSIN ACCORDANCE WITH ISG REGULATORY MEMORANDUM, ISG 2005-01.










Docket/Case Number: HPD #05-159




Resolution:


Sanction Details: **1/5/06**DECISION 05-159 ISSUED BY NYSE HEARING PANEL DECISION:VIOLATED NYSE RULE 410A BY FAILING TO SUBMIT ACCURATE TRADINGINFORMATION THROUGH THE SUBMISSION OF ELECTRONIC BLUESHEETS; VIOLATED NYSE RULE 401 BY SUBMITTING INACCURATETRADING INFORMATION ON ELECTRONIC BLUE SHEETS; VIOLATED NYSERULE 342 BY FAILING TO ESTABLISH AND MAINTAIN APPROPRIATESYSTEMS AND PROCEDURES FOR THE SUPERVISION AND CONTROL OFAREAS RESPONSIBLE FOR COMPLYING WITH ELECTRONIC BLUE SHEETREPORTING REQUIREMENTS AND FAILING TO ESTABLISH A SEPARATESYSTEM OF FOLLOW-UP AND REVIEW TO REASONABLY ENSURECOMPLIANCE WITH NYSE RULES RELATING TO THE PREPARATION ANDSUBMISSION OF ELECTRONIC BLUE SHEETS. -CONSENT TO CENSURE,FINE OF $500,000, AND A REQUIREMENT TO CONDUCT VALIDATION OF ALLREQUIRED BLUE SHEET DATA ELEMENTS, AND UNDERTAKING TO INFORMNYSE IN WRITING THAT VALIDATION HAS BEEN COMPLETED.

Regulator Statement **2/17/06**THE DECISION IS NOW FINAL AND IS EFFECTIVE IMMEDIATELY.CONTACT: PEGGY GERMINO 212-656-8450.


Decision


Allegations: STIPULATION AND CONSENT TO PENALTY FILED BY NYSE DIVISION OFENFORCEMENT AND PENDING CONSENTED TO FINDINGS: 1.VIOLATEDEXCHANGE RULE 410A BY FAILING TO SUBMIT ACCURATE TRADINGINFORMATION THROUGH THE SUBMISSION OF ELECTRONIC BLUE SHEETSIN RESPONSE TO ONE OR MORE REQUESTS FOR SUCH INFORMATION BYTHE EXCHANGE;2.VIOLATED EXCHANGE RULE 401 BY FAILING TO ADHERETO THE PRINCIPLES OF GOOD BUSINESS PRACTICE IN THE CONDUCT OFTHEIR BUSINESS AFFAIRS IN THAT IT SUBMITTED INACCURATE TRADINGINFORMATION ON ELECTRONIC BLUE SHEETS IN RESPONSE TO ONE ORMORE REQUESTS FOR SUCH INFORMATION BY THE EXCHANGE; AND3.VIOLATED EXCHANGE RULES 342 BY FAILING TO ESTABLISH ANDMAINTAIN APPROPRIATE SYSTEMS AND PROCEDURES FOR THESUPERVISION AND CONTROL OF AREAS RESPONSIBLE FOR COMPLYINGWITH ELECTRONIC BLUE SHEET REPORTING REQUIREMENTS, AND FAILEDTO ESTABLISH A SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW TOREASONABLY ENSURE COMPLIANCE WITH EXCHANGE RULES RELATINGTO THE PREPARATION AND SUBMISSION OF ELECTRONIC BLUE SHEETS.STIPULATED SANCTION: THE IMPOSITION BY THE EXCHANGE OF ACENSURE, A $500,000 FINE AND A REQUIREMENT THAT RESPONDENT WILLCONDUCT A VALIDATION OF ALL REQUIRED BLUE SHEET DATA ELEMENTSIN ACCORDANCE WITH ISG REGULATORY MEMORANDUM, ISG 2005-01.
















STIPULATION AND CONSENT TO PENALTY FILED BY NYSE DIVISION OFENFORCEMENT AND PENDING CONSENTED TO FINDINGS: 1.VIOLATEDEXCHANGE RULE 410A BY FAILING TO SUBMIT ACCURATE TRADINGINFORMATION THROUGH THE SUBMISSION OF ELECTRONIC BLUE SHEETSIN RESPONSE TO ONE OR MORE REQUESTS FOR SUCH INFORMATION BYTHE EXCHANGE;2.VIOLATED EXCHANGE RULE 401 BY FAILING TO ADHERETO THE PRINCIPLES OF GOOD BUSINESS PRACTICE IN THE CONDUCT OFTHEIR BUSINESS AFFAIRS IN THAT IT SUBMITTED INACCURATE TRADINGINFORMATION ON ELECTRONIC BLUE SHEETS IN RESPONSE TO ONE ORMORE REQUESTS FOR SUCH INFORMATION BY THE EXCHANGE; AND3.VIOLATED EXCHANGE RULES 342 BY FAILING TO ESTABLISH ANDMAINTAIN APPROPRIATE SYSTEMS AND PROCEDURES FOR THESUPERVISION AND CONTROL OF AREAS RESPONSIBLE FOR COMPLYINGWITH ELECTRONIC BLUE SHEET REPORTING REQUIREMENTS, AND FAILEDTO ESTABLISH A SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW TOREASONABLY ENSURE COMPLIANCE WITH EXCHANGE RULES RELATINGTO THE PREPARATION AND SUBMISSION OF ELECTRONIC BLUE SHEETS.STIPULATED SANCTION: THE IMPOSITION BY THE EXCHANGE OF ACENSURE, A $500,000 FINE AND A REQUIREMENT THAT RESPONDENT WILLCONDUCT A VALIDATION OF ALL REQUIRED BLUE SHEET DATA ELEMENTSIN ACCORDANCE WITH ISG REGULATORY MEMORANDUM, ISG 2005-01.


Resolution:


Sanction Details: **1/5/06**DECISION 05-159 ISSUED BY NYSE HEARING PANEL DECISION:VIOLATED NYSE RULE 410A BY FAILING TO SUBMIT ACCURATE TRADINGINFORMATION THROUGH THE SUBMISSION OF ELECTRONIC BLUESHEETS; VIOLATED NYSE RULE 401 BY SUBMITTING INACCURATETRADING INFORMATION ON ELECTRONIC BLUE SHEETS; VIOLATED NYSERULE 342 BY FAILING TO ESTABLISH AND MAINTAIN APPROPRIATESYSTEMS AND PROCEDURES FOR THE SUPERVISION AND CONTROL OFAREAS RESPONSIBLE FOR COMPLYING WITH ELECTRONIC BLUE SHEETREPORTING REQUIREMENTS AND FAILING TO ESTABLISH A SEPARATESYSTEM OF FOLLOW-UP AND REVIEW TO REASONABLY ENSURECOMPLIANCE WITH NYSE RULES RELATING TO THE PREPARATION ANDSUBMISSION OF ELECTRONIC BLUE SHEETS. -CONSENT TO CENSURE,FINE OF $500,000, AND A REQUIREMENT TO CONDUCT VALIDATION OF ALLREQUIRED BLUE SHEET DATA ELEMENTS, AND UNDERTAKING TO INFORMNYSE IN WRITING THAT VALIDATION HAS BEEN COMPLETED.








**1/5/06**DECISION 05-159 ISSUED BY NYSE HEARING PANEL DECISION:VIOLATED NYSE RULE 410A BY FAILING TO SUBMIT ACCURATE TRADINGINFORMATION THROUGH THE SUBMISSION OF ELECTRONIC BLUESHEETS; VIOLATED NYSE RULE 401 BY SUBMITTING INACCURATETRADING INFORMATION ON ELECTRONIC BLUE SHEETS; VIOLATED NYSERULE 342 BY FAILING TO ESTABLISH AND MAINTAIN APPROPRIATESYSTEMS AND PROCEDURES FOR THE SUPERVISION AND CONTROL OFAREAS RESPONSIBLE FOR COMPLYING WITH ELECTRONIC BLUE SHEETREPORTING REQUIREMENTS AND FAILING TO ESTABLISH A SEPARATESYSTEM OF FOLLOW-UP AND REVIEW TO REASONABLY ENSURECOMPLIANCE WITH NYSE RULES RELATING TO THE PREPARATION ANDSUBMISSION OF ELECTRONIC BLUE SHEETS. -CONSENT TO CENSURE,FINE OF $500,000, AND A REQUIREMENT TO CONDUCT VALIDATION OF ALLREQUIRED BLUE SHEET DATA ELEMENTS, AND UNDERTAKING TO INFORMNYSE IN WRITING THAT VALIDATION HAS BEEN COMPLETED.

Firm Statement ON JANUARY 5TH, 2006, THE NYSE HEARING PANEL ISSUED ITS DECISIONREGARDING THE DIVISION OF ENFORCEMENT'S ACTION AGAINSTMULTIPLE FIRMS FOR ERRORS IN REPORTING SHORT SALE TRADES ONTHE BLUESHEET REPORT. THE PANEL AFFIRMED THE STIPULATIONAGREED TO BY UBS SECURITIES LLC IMPOSING A CENSURE; A FINE OF$500,000; AND A REQUIREMENT THAT UBS-S CONDUCT A VALIDATION OFALL REQUIRED BLUSHEET DATA ELEMENTS IN ACCORDANCE WITH ISGREGULATORY MEMORANDUM ISG 2005-01. UBS-S IS CITED FORVIOLATING NYSE RULES 410A, 401, AND 342.


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Allegations: SEC ADMINISTRATIVE PROCEEDING RELEASE NO. 34-52022 DATED JULY13, 2005; UBS'S VIOLATED OF THE RECORD-KEEPING REQUIREMENTS OFSECTION 17(A)(1) OF THE EXCHANGE ACT AND RULE 17A-4 THEREUNDERDURING THE PERIOD OF JULY 1, 1999 TOJUNE 30, 2002 (THE "RELEVANT PERIOD"). DURING ALL OR PART OF THERELEVANT PERIOD, UBS FAILED TO PRESERVE FOR THREE YEARS, THEFIRST TWO OF WHICH IN AN EASILY ACCESSIBLE PLACE, ALL ELECTRONICMAIL COMMUNICATIONS (INCLUDING INTER-OFFICE MEMORANDA ANDCOMMUNICATIONS) RECEIVED AND SENT BYITS EMPLOYEES THAT RELATED TO ITS BUSINESS AS A MEMBER OF ANEXCHANGE, BROKER OR DEALER. UBS LACKED ADEQUATE SYSTEMS ORPROCEDURES TO ENSURE THE PRESERVATION OF ELECTRONIC MAILCOMMUNICATIONS.








Cease and Desist


CENSURE, CIVIL PENALTY



Resolution:

Other Sanctions Ordered: UNDERTAKING: WITHIN 90 DAYS TO REVIEW PROCEDURES REGARDINGTHE PRESERVATION OF ELECTRONIC COMMUNICATIONS FORCOMPLIANCE WITH THE APPLICABLE LAW AND REGULATIONS.

Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS HEREIN, RESPONDENTCONSENTED TO THE ENTRY OF THIS ORDER. ACCORDINGLY, PURSUANTTO SECTION 8A OF THE SECURITIES ACT AND SECTION 21C OF THEEXCHANGE ACT IS ORDERED THAT RESPONDENT SHALL CEASE ANDDESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANYFUTURE VIOLATIONS OF SECTION 17(A)(1) OF THE EXCHANGE ACT ANDRULE 17A-4 PROMULGATEDTHEREUNDER, PURSUANT TO SECTION 21C OF THE EXCHANGE ACT;AND CENSURED PURSUANT TO SECTION 15(B)(4) OF THE EXCHANGE ACT.PURSUANT TO SECTION 15(B)(4) AND SECTION 21B OF THE EXCHANGEACT, RESPONDENT SHALL PAY $700,000 TO THE U.S. TREASURY AS A CIVILPENALTY WITHIN TEN (10) DAYS AFTER THE ENTRY OF THE ORDER.


No

Sanctions Ordered: CensureMonetary/Fine $700,000.00Cease and Desist/Injunction

Order


Allegations: SEC ADMINISTRATIVE PROCEEDING RELEASE NO. 34-52022 DATED JULY13, 2005; UBS'S VIOLATED OF THE RECORD-KEEPING REQUIREMENTS OFSECTION 17(A)(1) OF THE EXCHANGE ACT AND RULE 17A-4 THEREUNDERDURING THE PERIOD OF JULY 1, 1999 TO JUNE 30, 2002 (THE "RELEVANTPERIOD"). DURING ALL OR PART OF THE RELEVANT PERIOD, UBS FAILEDTO PRESERVE FOR THREE YEARS, THE FIRST TWO OF WHICH IN ANEASILY ACCESSIBLE PLACE, ALL ELECTRONIC MAIL COMMUNICATIONS(INCLUDING INTER-OFFICE MEMORANDA AND COMMUNICATIONS)RECEIVED AND SENT BY ITS EMPLOYEES THAT RELATED TO ITS BUSINESSAS A MEMBER OF AN EXCHANGE, BROKER OR DEALER. UBS LACKEDADEQUATE SYSTEMS OR PROCEDURES TO ENSURE THE PRESERVATIONOF ELECTRONIC MAIL COMMUNICATIONS









Cease and Desist


CENSURE, CIVIL PENALTY





SEC ADMINISTRATIVE PROCEEDING RELEASE NO. 34-52022 DATED JULY13, 2005; UBS'S VIOLATED OF THE RECORD-KEEPING REQUIREMENTS OFSECTION 17(A)(1) OF THE EXCHANGE ACT AND RULE 17A-4 THEREUNDERDURING THE PERIOD OF JULY 1, 1999 TO JUNE 30, 2002 (THE "RELEVANTPERIOD"). DURING ALL OR PART OF THE RELEVANT PERIOD, UBS FAILEDTO PRESERVE FOR THREE YEARS, THE FIRST TWO OF WHICH IN ANEASILY ACCESSIBLE PLACE, ALL ELECTRONIC MAIL COMMUNICATIONS(INCLUDING INTER-OFFICE MEMORANDA AND COMMUNICATIONS)RECEIVED AND SENT BY ITS EMPLOYEES THAT RELATED TO ITS BUSINESSAS A MEMBER OF AN EXCHANGE, BROKER OR DEALER. UBS LACKEDADEQUATE SYSTEMS OR PROCEDURES TO ENSURE THE PRESERVATIONOF ELECTRONIC MAIL COMMUNICATIONS


Resolution:

Other Sanctions Ordered: UNDERTAKING: WITHIN 90 DAYS TO REVIEW PROCEDURES REGARDINGTHE PRESERVATION OF ELECTRONIC COMMUNICATIONS FORCOMPLIANCE WITH THE APPLICABLE LAW AND REGULATIONS.

Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS HEREIN, RESPONDENTCONSENTED TO THE ENTRY OF THIS ORDER. ACCORDINGLY, PURSUANTTO SECTION 8A OF THE SECURITIES ACT AND SECTION 21C OF THEEXCHANGE ACT IS ORDERED THAT RESPONDENT SHALL CEASE ANDDESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANYFUTURE VIOLATIONS OF SECTION 17(A)(1) OF THE EXCHANGE ACT ANDRULE 17A-4 PROMULGATED THEREUNDER, PURSUANT TO SECTION 21COF THE EXCHANGE ACT; AND CENSURED PURSUANT TO SECTION 15(B)(4)OF THE EXCHANGE ACT. PURSUANT TO SECTION 15(B)(4) AND SECTION21B OF THE EXCHANGE ACT, RESPONDENT SHALL PAY $700,000 TO THEU.S. TREASURY AS A CIVIL PENALTY WITHIN TEN (10) DAYS AFTER THEENTRY OF THE ORDER.

Sanctions Ordered: CensureMonetary/Fine $700,000.00Cease and Desist/Injunction

Order


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Initiated By: NASD




Docket/Case Number: CE1050008



Allegations: SECTION 17(A) OF THE EXCHANGE ACT, RULE 17A-4 THEREUNDER, NASDRULE 3110 AND 3010- THE MEMBER FIRM FAILED TO KEEP ELECTRONICCOMMUNICATIONS FOR THREE YEARS AND/OR FAILED TO PRESERVEELECTRONIC MAIL COMMUNICATIONS FOR THE FIRST TWO YEARS IN ANACCESSIBLE PLACE. THE FIRM ALSO HAD INADEQUATE SUPERVISORYSYSTEMS AND PROCEDURES THAT WERE NOT REASONABLY DESIGNEDTO ACHIEVE COMPLIANCE.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, RESPONDENT FIRMCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE, FIRM IS CENSURED AND FINED $2,100,000. THEAMOUNT PAID TO NASD BY THE FIRM SHALL BE REDUCED BY $700,000PURSUANT TO A CIVIL MONEY PENALTY PAID TO THE U.S. TREASURY ANDBY $700,000 PURSUANT TO A FINE PAID TO THE EXCHANGE, IN RELATEDPROCEEDINGS WITH THE COMMISSION AND EXCHANGE.


No







https://www.finra.org/rules-guidance/oversight-enforcement/finra-disciplinary-actions?search=CE1050008



Initiated By: NASD




Docket/Case Number: CE1050008



Allegations: SECTION 17(A) OF THE EXCHANGE ACT, RULE 17A-4 THEREUNDER, NASDRULE 3110 AND 3010- THE MEMBER FIRM FAILED TO KEEP ELECTRONICCOMMUNICATIONS FOR THREE YEARS AND/OR FAILED TO PRESERVEELECTRONIC MAIL COMMUNICATIONS FOR THE FIRST TWO YEARS IN ANACCESSIBLE PLACE. THE FIRM ALSO HAD INADEQUATE SUPERVISORYSYSTEMS AND PROCEDURES THAT WERE NOT REASONABLY DESIGNEDTO ACHIEVE COMPLIANCE.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, RESPONDENT FIRMCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE, FIRM IS CENSURED AND FINED $2,100,000. THEAMOUNT PAID TO NASD BY THE FIRM SHALL BE REDUCED BY $700,000PURSUANT TO A CIVIL MONEY PENALTY PAID TO THE U.S. TREASURY ANDBY $700,000 PURSUANT TO A FINE PAID TO THE EXCHANGE, IN RELATEDPROCEEDINGS WITH THE COMMISSION AND EXCHANGE.




i







https://www.finra.org/rules-guidance/oversight-enforcement/finra-disciplinary-actions?search=CE1050008






Docket/Case Number: HPD#: 05-062



Allegations: **5/18/05**STIPULATION AND CONSENT TO PENALTY FILED BY NYSEDIVISION OF ENFORCEMENT CONSENTED TO FINDINGS: WITHOUTADMITTING OR DENYING GUILT, UBS SECURITIES LLC CONSENTED TOFINDINGS BY THE HEARING PANEL THAT THE FIRM:(1)VIOLATEDEXCHANGE RULE 440, SECTION 17(A)(1) OF THE SECURITIES ANDEXCHANGE ACT OF 1934 AND RULE 17A-4 BY FAILING TO PRESERVE FOR APERIOD OF THREE YEARS, THE FIRST TWO OF WHICH IN AN ACCESSIBLEPLACE, ELECTRONIC COMMUNICATIONS RELATING TO ITS BUSINESS; AND(2)VIOLATED EXCHANGE RULE 342 BY FAILING TO REASONABLYSUPERVISE AND CONTROL THE ACTIVITIES OF ITS EMPLOYEES AND BYFAILING TO ESTABLISH AN ADEQUATE SYSTEM OF FOLLOW-UP ANDREVIEW TO ENSURE COMPLIANCE WITH EXCHANGE RULES AND FEDERALSECURITIES LAWS RELATING TO THE RETENTION OF ELECTRONICCOMMUNICATIONS. STIPULATED SANCTION:THE IMPOSITION BY THEEXCHANGE OF:1.)A CENSURE;2.)A TOTAL PAYMENT OF $2.1 MILLION; AND3.)AN UNDERTAKING.


Resolution:


Sanction Details: **5/19/05**DECISION 05-62 ISSUED BY NYSE HEARING PANELDECISION: VIOLATED EXCHANGE RULE 440, SECTION 17(A)(1) OF THESECURITIES AND EXCHANGE ACT OF 1934 AND RULE 17A-4 BY FAILING TOPRESERVE FOR A PERIOD OF THREE YEARS, THE FIRST TWO OF WHICH INAN ACCESSIBLE PLACE, ELECTRONIC COMMUNICATIONS RELATING TO ITSBUSINESS; AND VIOLATED EXCHANGE RULE 342 BY FAILING TOREASONABLY SUPERVISE AND CONTROL THE ACTIVITIES OF ITSEMPLOYEES AND BY FAILING TO ESTABLISH AN ADEQUATE SYSTEM OFFOLLOW-UP AND REVIEW TO ENSURE COMPLIANCE WITH EXCHANGERULES AND FEDERAL SECURITIES LAWS RELATING TO THE RETENTION OFELECTRONIC COMMUNICATIONS -- CONSENT TO CENSURE, A FINE OF$2,100,000 AND AN UNDERTAKING.


Decision






**5/19/05**DECISION 05-62 ISSUED BY NYSE HEARING PANELDECISION: VIOLATED EXCHANGE RULE 440, SECTION 17(A)(1) OF THESECURITIES AND EXCHANGE ACT OF 1934 AND RULE 17A-4 BY FAILING TOPRESERVE FOR A PERIOD OF THREE YEARS, THE FIRST TWO OF WHICH INAN ACCESSIBLE PLACE, ELECTRONIC COMMUNICATIONS RELATING TO ITSBUSINESS; AND VIOLATED EXCHANGE RULE 342 BY FAILING TOREASONABLY SUPERVISE AND CONTROL THE ACTIVITIES OF ITSEMPLOYEES AND BY FAILING TO ESTABLISH AN ADEQUATE SYSTEM OFFOLLOW-UP AND REVIEW TO ENSURE COMPLIANCE WITH EXCHANGERULES AND FEDERAL SECURITIES LAWS RELATING TO THE RETENTION OFELECTRONIC COMMUNICATIONS -- CONSENT TO CENSURE, A FINE OF$2,100,000 AND AN UNDERTAKING.

Regulator Statement **6/15/05**THE DECISION IS NOW FINAL AND EFFECTIVEIMMEDIATELY.CONTACT:MICHELE VAN TASSEL 212-656-5340






Docket/Case Number: EXCHANGE HEARING PANEL DECISION 05-62



Allegations: **5/18/05**STIPULATION AND CONSENT TO PENALTY AND FINDINGS FILEDBY THE NYSE DIVISION OF ENFORCEMENT: WITHOUT ADMITTING ORDENYING GUILT, UBS SECURITIES LLC CONSENTED TO FINDINGS BY THEHEARING PANEL THAT THE FIRM:(1)VIOLATED EXCHANGE RULE 440,SECTION 17(A)(1) OF THE SECURITIES AND EXCHANGE ACT OF 1934 ANDRULE 17A-4 BY FAILING TO PRESERVE FOR A PERIOD OF THREE YEARS,THE FIRST TWO OF WHICH IN AN ACCESSIBLE PLACE, ELECTRONICCOMMUNICATIONS RELATING TO ITS BUSINESS; AND (2)VIOLATEDEXCHANGE RULE 342 BY FAILING TO REASONABLY SUPERVISE ANDCONTROL THE ACTIVITIES OF ITS EMPLOYEES AND BY FAILING TOESTABLISH AN ADEQUATE SYSTEM OF FOLLOW-UP AND REVIEW TOENSURE COMPLIANCE WITH EXCHANGE RULES AND FEDERALSECURITIES LAWS RELATING TO THE RETENTION OF ELECTRONICCOMMUNICATIONS. STIPULATED SANCTION:THE IMPOSITION BY THEEXCHANGE OF:1.)A CENSURE;2.)A TOTAL PAYMENT OF $2.1 MILLION($700,000 NASD, $700,000 NYSE AND $700,000 SEC) AND 3.)ANUNDERTAKING.



Resolution:


Decision







Sanction Details: **5/19/05**DECISION 05-62 ISSUED BY NYSE HEARING PANEL: UBSSECURITIES LLC VIOLATED EXCHANGE RULE 440, SECTION 17(A)(1) OFTHE SECURITIES AND EXCHANGE ACT OF 1934 AND RULE 17A-4 BYFAILING TO PRESERVE FOR A PERIOD OF THREE YEARS, THE FIRST TWOOF WHICH IN AN ACCESSIBLE PLACE, ELECTRONIC COMMUNICATIONSRELATING TO ITS BUSINESS; AND VIOLATED EXCHANGE RULE 342 BYFAILING TO REASONABLY SUPERVISE AND CONTROL THE ACTIVITIES OFITS EMPLOYEES AND BY FAILING TO ESTABLISH AN ADEQUATE SYSTEM OFFOLLOW-UP AND REVIEW TO ENSURE COMPLIANCE WITH EXCHANGERULES AND FEDERAL SECURITIES LAWS RELATING TO THE RETENTION OFELECTRONIC COMMUNICATIONS -- CONSENT TO CENSURE, A FINE OF$2,100,000 ($700,000 NASD, $700,000 NYSE AND $700,000 SEC)AND ANUNDERTAKING.



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Initiated By: CBOT





Docket/Case Number: 2004-INV-9



Allegations: UBS EMPLOYEES, BY VIRUTE OF REGULATION 9B.07, EXCUTED CROSSTRADES WHICH WERE NOT ENTERED IN ACCORDANCE WITH PRESCRIBEDTIME REQUIREMENTS AND PROCEDURES, IN VIOLATION OF REGULATION9B.16.



Resolution:



Settled







Sanction Details: $30,000 FINE PAID ON

Firm Statement WITHOUT ADMITTING OR DENYING ANY VIOLATION OF REGULATION 9B.16,APPLICANT AGREED TO PAY A FINE OF $30,000 IN SETTLEMENT OF THISMATTER.


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Initiated By: NASD




Docket/Case Number: CMS040147



Allegations: NASD CONDUCT RULE 2110, NASD MARKETPLACE RULES 4632(A)(9)6955(A)AND SEC RULE 10B-10 AND 11AC1-5(B) - RESPONDENT MEMBERINCORRECTLY DESIGNATED AS .PRP THROUGH ACT LAST SALE REPORTSOF TRANSACTIONS IN NASDAQ NATIONAL MARKET SECURITIES;TRANSMITTED TO OATS REPORTS THAT CONTAINED INACCURATE ORDERTYPES AND INACCURATE ORDER RECEIPT TIME AND FAILED TO SUBMITREQUIRED OATS DATA; FAILED TO PROVIDE WRITTEN NOTIFICATIONDISCLOSING TO ITS CUSTOMER THAT THE TRANSACTION WAS EXECUTEDAT AN AVERAGE PRICE; AND MADE AVAILABLE A REPORT ON THECOVERED ORDERS IN NATIONAL MARKET SECURITIES IN WHICH THE FIRMCLASSIFIED ORDER INCORRECTLY AND IN WHICH THE FIRM CALCULATEDORDER EXECUTION DATA INCORRECTLY.



Resolution:


No








Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, RESPONDENTMEMBER CONSENTED TO THE DESCRIBED SANCTIONS AND TO THEENTRY OF FINDINGS, THEREFORE, THE FIRM IS CENSURED AND FINED$25,000.


No



Initiated By: NASD


Other





Other Product Type(s): UNSPECIFIED

Allegations: NASD CONDUCT RULE 2110, NASD MARKETPLACE RULES 4632(A)(9)6955(A)AND SEC RULE 10B-10 AND 11AC1-5(B) - RESPONDENT MEMBERINCORRECTLY DESIGNATED AS .PRP THROUGH ACT LAST SALE REPORTSOF TRANSACTIONS IN NASDAQ NATIONAL MARKET SECURITIES;TRANSMITTED TO OATS REPORTS THAT CONTAINED INACCURATE ORDERTYPES AND INACCURATE ORDER RECEIPT TIME AND FAILED TO SUBMITREQUIRED OATS DATA; FAILED TO PROVIDE WRITTEN NOTIFICATIONDISCLOSING TO ITS CUSTOMER THAT THE TRANSACTION WAS EXECUTEDAT AN AVERAGE PRICE; AND MADE AVAILABLE A REPORT ON THECOVERED ORDERS IN NATIONAL MARKET SECURITIES IN WHICH THE FIRMCLASSIFIED ORDER INCORRECTLY AND IN WHICH THE FIRM CALCULATEDORDER EXECUTION DATA INCORRECTLY.








Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, RESPONDENTMEMBER CONSENTED TO THE DESCRIBED SANCTIONS AND TO THEENTRY OF FINDINGS, THEREFORE, THE FIRM IS CENSURED AND FINED$25,000. FINE PAID ON 10/13/2004.




i


Initiated By: NASD







Allegations: NASD CONDUCT RULE 3320, NASD MARKETPLACE RULE 4613(B) AND SECRULE 11AC1-1 – AN ORDER WAS PRESENTED TO UBS WARBURG LLC("UBSW") AT UBSW'S PUBLISHED BID OR PUBLISHED OFFER IN AN AMOUNTUP TO ITS PUBLISHED QUOTATION SIZE. UBSW FAILED TO EXECUTE THEORDERS UPON PRESENTATION AND THEREBY FAILED TO HONOR ITSPUBLISHED QUOTATION.



Resolution:


No








Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, UBS WARBURG LLCCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $7,500.


No



Initiated By: NASD


Other





Other Product Type(s): UNSPECIFIED

Allegations: NASD CONDUCT RULE 3320, NASD MARKETPLACE RULE 4613(B) AND SECRULE 11A(C)1-1(C) – AN ORDER WAS PRESENTED TO UBS WARBURG LLC("UBSW") AT UBSW'S PUBLISHED BID OR PUBLISHED OFFER IN AN AMOUNTUP TO ITS PUBLISHED QUOTATION SIZE. UBSW FAILED TO EXECUTE THEORDERS UPON PRESENTATION AND THEREBY FAILED TO HONOR ITSPUBLISHED QUOTATION.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, UBS WARBURG LLCCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $7,500. FINEPAID ON 9/10/2004. NO PORTION OF THE FINE WAS WAIVED.








Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, UBS WARBURG LLCCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED $7,500. FINEPAID ON 9/10/2004. NO PORTION OF THE FINE WAS WAIVED.


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Initiated By: STATE OF MISSOURI, OFFICE OF SECRETARY OF STATE


Cease and Desist


DISGORGEMENT AND UNDERTAKING


Docket/Case Number: AO-03-20



Allegations: THE APPLICANT ACTED IN VIOLATION OF SECTION 409.204(A)(2)(G) OF THEMISSOURI SECURITIES ACT IN ISSUING RESEARCH REPORTS. THEAPPLICANT ALSO FAILED TO ESTABLISH AND MAINTAIN ADEQUATESUPERVISORY PROCEDURES AS REQUIRED BY SECTION 409.204(A)(2)(J)OF THE MISSOURI SECURITIES ACT.



Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTION 409.204(A)(2)(G) AND (J) OF THE MISSOURISECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDERED TOCOMPLY WITH SECTION 409.204(A)(2)(G) AND (J) OF THE MISSOURISECURITIES ACT IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. MUST PAY A TOTAL OF $80,000,000 (OF WHICH $431,117 ISALLOCATED TO THE STATE OF MISSOURI) INCLUDING $25,000,000 AS APENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHERMONIES, $25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.


Consent






ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTION 409.204(A)(2)(G) AND (J) OF THE MISSOURISECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDERED TOCOMPLY WITH SECTION 409.204(A)(2)(G) AND (J) OF THE MISSOURISECURITIES ACT IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. MUST PAY A TOTAL OF $80,000,000 (OF WHICH $431,117 ISALLOCATED TO THE STATE OF MISSOURI) INCLUDING $25,000,000 AS APENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHERMONIES, $25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE STATE OF MISSOURI, OFFICE OFSECRETARY OF STATE CERTAIN CHARGES ARISING FROM ANINVESTIGATION OF RESEARCH ANALYST CONFLICTS OF INTEREST. THISSETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHER BROKERAGEFIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMS HAVEREACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC, NASD,AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. ("UBS FINANCIAL") AGREED TOPAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25 MILLION INPENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION– WILL BE PAID IN CONNECTION WITH RELATED PROCEEDINGS BY THESEC, NASD AND NYSE AND WILL BE PLACED INTO A DISTRIBUTION FUNDFOR THE BENEFIT OF CERTAIN CUSTOMERS. THE REMAINDER WILL BEPAID TO RESOLVE RELATED PROCEEDINGS BY STATE REGULATORS.WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT ANDCONCLUSIONS OF LAW CONTAINED IN THE CONSENT ORDER, THEAPPLICANT CONSENTED TO THE ENTRY OF AN ORDER PROVIDING THATAPPLICANT WILL CEASE AND DESIST FROM VIOLATING SECTION 409.204(A)(2)(G) AND (J) OF THE MISSOURI SECURITIES ACT. IN ADDITION THEAPPLICANT WAS ORDERED TO COMPLY WITH SECTION 409.204(A)(2)(G)AND (J) OF THE MISSOURI SECURITIES ACT IN CONNECTION WITH THERESEARCH PRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF $80,000,000 (OF WHICH$431,117 IS ALLOCATED TO THE STATE OF MISSOURI) INCLUDING$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


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Initiated By: NORTH DAKOTA

Allegations: SEE GLOBAL SETTLEMENT DOCUMENTS







Initiated By: NORTH DAKOTA





Docket/Case Number:



Other Product Type(s): ANALYST CONFLICT OF INTEREST


Resolution:


Sanction Details: $242,500 ASSESSED AS A CIVIL PENALTY. $7,500 PAID TO THE INVESTOREDUCATION AND TECHNOLOGY FUND ADMINISTERED BY THE SECURITIESDEPARTMENT. THESE PAYMENTS WERE JOINT AND SEVERAL WITH UBSPAINEWEBBER, INC. OTHER TERMS AS SET FORTH IN GLOBALSETTLEMENT DOCUMENTS.


Consent


Initiated By: NORTH DAKOTA SECURITIES DEPARTMENT




Docket/Case Number:



Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 10-04-11(1)(C) OF THENORTH DAKOTA SECURITIES ACT IN ISSUING RESEARCH REPORTS.APPLICANT ALSO FAILED TO ESTABLISH AND MAINTAIN ADEQUATESUPERVISORY PROCEDURES FOR RESEARCH AS REQUIRED BY SECTION10-04-11(1)(M) OF THE NORTH DAKOTA SECURITIES ACT.










DISGORGEMENT, UNDERTAKING, CEASE AND DESIST


Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTIONS 10-04-11(1)(C) AND 10-04-11(1)(M) OF THE NORTHDAKOTA SECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDERED TOCOMPLY WITH THE SECTIONS 10-04-11(1)(C) AND 10-04-11(1)(M) OF THENORTH DAKOTA SECURITIES ACT IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. MUST PAY A TOTAL OF$80,000,000 (OF WHICH $250,000 IS ALLOCATED TO THE STATE OF NORTHDAKOTA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE NORTH DAKOTA SECURITIESDEPARTMENT CERTAIN CHARGES ARISING FROM AN INVESTIGATION OFRESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING THE SECTIONS 10-04-11(1)(C) AND 10-04-11(1)(M)OF THE NORTH DAKOTA SECURITIES ACT. IN ADDITION THE APPLICANTWAS ORDERED TO COMPLY WITH THE SECTIONS 10-04-11(1)(C) AND 10-04-11(1)(M) OF THE NORTH DAKOTA SECURITIES ACT IN CONNECTION WITHTHE RESEARCH PRACTICES REFERENCED IN THE ORDER AND WITHCERTAIN UNDERTAKINGS TO ADOPT ENHANCED POLICIES ANDPROCEDURES REASONABLY DESIGNED TO ADDRESS POTENTIALCONFLICTS OF INTEREST ARISING FROM RESEARCH PRACTICES.APPLICANT AND ITS AFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF$80,000,000 (OF WHICH $250,000 IS ALLOCATED TO THE STATE OF NORTHDAKOTA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


Consent






APPLICANT HAS SETTLED WITH THE NORTH DAKOTA SECURITIESDEPARTMENT CERTAIN CHARGES ARISING FROM AN INVESTIGATION OFRESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING THE SECTIONS 10-04-11(1)(C) AND 10-04-11(1)(M)OF THE NORTH DAKOTA SECURITIES ACT. IN ADDITION THE APPLICANTWAS ORDERED TO COMPLY WITH THE SECTIONS 10-04-11(1)(C) AND 10-04-11(1)(M) OF THE NORTH DAKOTA SECURITIES ACT IN CONNECTION WITHTHE RESEARCH PRACTICES REFERENCED IN THE ORDER AND WITHCERTAIN UNDERTAKINGS TO ADOPT ENHANCED POLICIES ANDPROCEDURES REASONABLY DESIGNED TO ADDRESS POTENTIALCONFLICTS OF INTEREST ARISING FROM RESEARCH PRACTICES.APPLICANT AND ITS AFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF$80,000,000 (OF WHICH $250,000 IS ALLOCATED TO THE STATE OF NORTHDAKOTA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


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Initiated By: STATE OF NEW MEXICO SECURITIES DIVISION


Cease and Desist


DISGORGEMENT, UNDERTAKING


Docket/Case Number: 04-03-027-009



Allegations: THE APPLICANT ACTED IN VIOLATION OF SECTION 58-13B-16.A(2)(H) OFTHE NEW MEXICO SECURITIES ACT IN ISSUING RESEARCH REPORTS. THEAPPLICANT ALSO FAILED TO ESTABLISH AND MAINTAIN ADEQUATESUPERVISORY PROCEDURES FOR RESEARCH AS REQUIRED BY SECTION58-13B-16.A(2)(H) AND (K) OF THE NEW MEXICO SECURITIES ACT AND RULE12.11.4.10 PROMULGATED THEREUNDER.



Resolution:


Consent







Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTIONS 58-13B-16.A(H) AND (K) OF THE NEW MEXICOSECURITIES ACT AND RULE 12.11.4.10 PROMULGATED THEREUNDER. INADDITION THE APPLICANT WAS ORDERED TO COMPLY WITH SECTIONS 58-13B-16.A(H) AND (K) OF THE NEW MEXICO SECURITIES ACT AND RULE12.11.4.10 PROMULGATED THEREUNDER IN CONNECTION WITH THERESEARCH PRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. MUST PAY A TOTAL OF$80,000,000 (OF WHICH $2,609,851 IS ALLOCATED TO THE STATE OFCALIFORNIA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE NEW MEXICO SECURITIES DIVISIONCERTAIN CHARGES ARISING FROM AN INVESTIGATION OF RESEARCHANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING SECTIONS 58-13B-16.A(H) AND (K) OF THE NEWMEXICO SECURITIES ACT AND RULE 12.11.4.10 PROMULGATEDTHEREUNDER. IN ADDITION THE APPLICANT WAS ORDERED TO COMPLYWITH SECTIONS 58-13B-16.A(H) AND (K) OF THE NEW MEXICO SECURITIESACT AND RULE 12.11.4.10 PROMULGATED THEREUNDER IN CONNECTIONWITH THE RESEARCH PRACTICES REFERENCED IN THE ORDER AND WITHCERTAIN UNDERTAKINGS TO ADOPT ENHANCED POLICIES ANDPROCEDURES REASONABLY DESIGNED TO ADDRESS POTENTIALCONFLICTS OF INTEREST ARISING FROM RESEARCH PRACTICES.APPLICANT AND ITS AFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF$80,000,000 (OF WHICH $2,609,851 IS ALLOCATED TO THE STATE OFCALIFORNIA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION







APPLICANT HAS SETTLED WITH THE NEW MEXICO SECURITIES DIVISIONCERTAIN CHARGES ARISING FROM AN INVESTIGATION OF RESEARCHANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING SECTIONS 58-13B-16.A(H) AND (K) OF THE NEWMEXICO SECURITIES ACT AND RULE 12.11.4.10 PROMULGATEDTHEREUNDER. IN ADDITION THE APPLICANT WAS ORDERED TO COMPLYWITH SECTIONS 58-13B-16.A(H) AND (K) OF THE NEW MEXICO SECURITIESACT AND RULE 12.11.4.10 PROMULGATED THEREUNDER IN CONNECTIONWITH THE RESEARCH PRACTICES REFERENCED IN THE ORDER AND WITHCERTAIN UNDERTAKINGS TO ADOPT ENHANCED POLICIES ANDPROCEDURES REASONABLY DESIGNED TO ADDRESS POTENTIALCONFLICTS OF INTEREST ARISING FROM RESEARCH PRACTICES.APPLICANT AND ITS AFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF$80,000,000 (OF WHICH $2,609,851 IS ALLOCATED TO THE STATE OFCALIFORNIA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION


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Initiated By: NORTH CAROLINA DEPARTMENT OF THE SECRETARY OF STATE,SECURITIES DIVISION


Cease and Desist




Docket/Case Number: 03-013-IG



Allegations: THE APPLICANT ACTED IN VIOLATION OF SECTION 78A-39(A)(2)(G) OF THENORTH CAROLINA SECURITIES ACT AND RULES 18NCAC6.1414(A)AND 18 NCAC 6.1414(B)(33) OF THE NORTH CAROLINA ADMINISTRATIVECODE IN ISSUING RESEARCH REPORTS AND BY FAILING TO ESTABLISH.AND MAINTAIN ADEQUATE SUPERVISORY PROCEDURES FOR RESEARCH.



Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTION78A-39(A)(2)(G) OF THE NORTH CAROLINA SECURITIESACT. IN ADDITION THE APPLICANT WAS ORDERED TO COMPLY WITHSECTION78A-39(A)(2)(G) OF THE NORTH CAROLINA SECURITIES ACT INCONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIAL SERVICES INC.MUST PAY A TOTAL OF $80,000,000 (OF WHICH $620,209 IS ALLOCATED TOTHE STATE OF NORTH CAROLINA) INCLUDING $25,000,000 AS A PENALTY;$25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES,$25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION


Consent






ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTION78A-39(A)(2)(G) OF THE NORTH CAROLINA SECURITIESACT. IN ADDITION THE APPLICANT WAS ORDERED TO COMPLY WITHSECTION78A-39(A)(2)(G) OF THE NORTH CAROLINA SECURITIES ACT INCONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIAL SERVICES INC.MUST PAY A TOTAL OF $80,000,000 (OF WHICH $620,209 IS ALLOCATED TOTHE STATE OF NORTH CAROLINA) INCLUDING $25,000,000 AS A PENALTY;$25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES,$25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION

Firm Statement APPLICANT HAS SETTLED WITH THE NORTH CAROLINA SECRETARY OFSTATE CERTAIN CHARGES ARISING FROM AN INVESTIGATION OFRESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING SECTION78A-39(A)(2)(G) OF THE NORTHCAROLINA SECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDEREDTO COMPLY WITH SECTION78A-39(A)(2)(G) OF THE NORTH CAROLINASECURITIES ACT IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALMUST PAY A TOTAL OF $80,000,000 (OF WHICH $620,209 IS ALLOCATED TOTHE STATE OF NORTH CAROLINA) INCLUDING $25,000,000 AS A PENALTY;$25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES,$25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION


i


Allegations: THE APPLICANT ACTED IN VIOLATION OF SECTION 25218 OF THECALIFORNIA CORPORATIONS CODE AND REGULATION SECTION 260.218.4PROMULGATED THEREUNDER IN ISSUING RESEARCH REPORTS. THEAPPLICANT ALSO FAILED TO ESTABLISH AND MAINTAIN ADEQUATESUPERVISORY PROCEDURES AS REQUIRED BY SECTION 25218 OF THECALIFORNIA CORPORATIONS CODE AND REGULATION SECTION 260.218.4PROMULGATED THEREUNDER IN ISSUING RESEARCH REPORTS.







Initiated By: CALIFORNIA DEPARTMENT OF CORPORATIONS


Cease and Desist




Docket/Case Number:



Allegations: THE APPLICANT ACTED IN VIOLATION OF SECTION 25218 OF THECALIFORNIA CORPORATIONS CODE AND REGULATION SECTION 260.218.4PROMULGATED THEREUNDER IN ISSUING RESEARCH REPORTS. THEAPPLICANT ALSO FAILED TO ESTABLISH AND MAINTAIN ADEQUATESUPERVISORY PROCEDURES AS REQUIRED BY SECTION 25218 OF THECALIFORNIA CORPORATIONS CODE AND REGULATION SECTION 260.218.4PROMULGATED THEREUNDER IN ISSUING RESEARCH REPORTS.


Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE CALIFORNIA CORPORATE SECURITIES LAW. IN ADDITIONTHE APPLICANT WAS ORDERED TO COMPLY WITH THE CALIFORNIACORPORATE SECURITIES LAW IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. MUST PAY A TOTAL OF$80,000,000 (OF WHICH $2,609,851 IS ALLOCATED TO THE STATE OFCALIFORNIA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION

Firm Statement APPLICANT HAS SETTLED WITH THE CALIFORNIA DEPARTMENT OFCORPORATIONS CERTAIN CHARGES ARISING FROM AN INVESTIGATION OFRESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING THE CALIFORNIA CORPORATE SECURITIES LAW.IN ADDITION THE APPLICANT WAS ORDERED TO COMPLY WITH THECALIFORNIA CORPORATE SECURITIES LAW IN CONNECTION WITH THERESEARCH PRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF $80,000,000 (OF WHICH$2,609,851 IS ALLOCATED TO THE STATE OF CALIFORNIA) INCLUDING$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION


Consent






APPLICANT HAS SETTLED WITH THE CALIFORNIA DEPARTMENT OFCORPORATIONS CERTAIN CHARGES ARISING FROM AN INVESTIGATION OFRESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING THE CALIFORNIA CORPORATE SECURITIES LAW.IN ADDITION THE APPLICANT WAS ORDERED TO COMPLY WITH THECALIFORNIA CORPORATE SECURITIES LAW IN CONNECTION WITH THERESEARCH PRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF $80,000,000 (OF WHICH$2,609,851 IS ALLOCATED TO THE STATE OF CALIFORNIA) INCLUDING$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION


i




Docket/Case Number:



Allegations: THE APPLICANT ACTED IN VIOLATION OF SECTION 421B:10(I)(B)(7) OF THENEW HAMPSHIRE SECURITIES ACT IN ISSUING RESEARCH REPORTS. THEAPPLICANT ALSO FAILED TO ESTABLISH AND MAINTAIN ADEQUATESUPERVISORY PROCEDURES FOR RESEARCH AS REQUIRED BY SECTION421B:10(I)(B)(10) OF THE NEW HAMPSHIRE SECURITIES ACT.








Disgorgement


CEAST AND DESIST



Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTIONS B:10(I)(B)(7) AND B:10(I)(B)(10) OF THE NEWHAMPSHIRE SECURITIES ACT. IN ADDITION THE APPLICANT WASORDERED TO COMPLY WITH SECTIONS B:10(I)(B)(7) AND B:10(I)(B)(10) OFTHE NEW HAMPSHIRE SECURITIES ACT IN CONNECTION WITH THERESEARCH PRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. MUST PAY A TOTAL OF$80,000,000 (OF WHICH $250,000 IS ALLOCATED TO THE STATE OF NEWHAMPSHIRE) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE NEW HAMPSHIRE BUREAU OFSECURITIES REGULATION CERTAIN CHARGES ARISING FROM ANINVESTIGATION OF RESEARCH ANALYST CONFLICTS OF INTEREST. THISSETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHER BROKERAGEFIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMS HAVEREACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC, NASD,AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. ("UBS FINANCIAL") HAVEAGREED TO PAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS -$25 MILLION – WILL BE PAID IN CONNECTION WITH RELATEDPROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CERTAIN CUSTOMERS. THEREMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. WITHOUT ADMITTING OR DENYING THE FINDINGSOF FACT AND CONCLUSIONS OF LAW CONTAINED IN THE CONSENTORDER, THE APPLICANT CONSENTED TO THE ENTRY OF AN ORDERPROVIDING THAT APPLICANT WILL CEASE AND DESIST FROM VIOLATINGSECTIONS B:10(I)(B)(7) AND B:10(I)(B)(10) OF THE NEW HAMPSHIRESECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDERED TOCOMPLY WITH SECTIONS B:10(I)(B)(7) AND B:10(I)(B)(10) OF THE NEWHAMPSHIRE SECURITIES ACT IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF $80,000,000 (OF WHICH$250,000 IS ALLOCATED TO THE STATE OF NEW HAMPSHIRE) INCLUDING$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


Consent






APPLICANT HAS SETTLED WITH THE NEW HAMPSHIRE BUREAU OFSECURITIES REGULATION CERTAIN CHARGES ARISING FROM ANINVESTIGATION OF RESEARCH ANALYST CONFLICTS OF INTEREST. THISSETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHER BROKERAGEFIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMS HAVEREACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC, NASD,AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. ("UBS FINANCIAL") HAVEAGREED TO PAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS -$25 MILLION – WILL BE PAID IN CONNECTION WITH RELATEDPROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CERTAIN CUSTOMERS. THEREMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. WITHOUT ADMITTING OR DENYING THE FINDINGSOF FACT AND CONCLUSIONS OF LAW CONTAINED IN THE CONSENTORDER, THE APPLICANT CONSENTED TO THE ENTRY OF AN ORDERPROVIDING THAT APPLICANT WILL CEASE AND DESIST FROM VIOLATINGSECTIONS B:10(I)(B)(7) AND B:10(I)(B)(10) OF THE NEW HAMPSHIRESECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDERED TOCOMPLY WITH SECTIONS B:10(I)(B)(7) AND B:10(I)(B)(10) OF THE NEWHAMPSHIRE SECURITIES ACT IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF $80,000,000 (OF WHICH$250,000 IS ALLOCATED TO THE STATE OF NEW HAMPSHIRE) INCLUDING$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


i


Initiated By: WEST VIRGINIA SECURITIES DIVISION, COMMISSIONER OF SECURITIES


Disgorgement


CEASE AND DESIST,UNDERTAKING


Docket/Case Number: E03-1351



Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 32-2-204(A)(2)(G) OF THEWEST VIRGINIA UNIFORM SECURITIES LAW AND REGULATIONS INISSUING RESEARCH REPORTS. THE APPLICANT ALSO FAILED TOESTABLISH AND MAINTAIN ADEQUATE SUPERVISORY PROCEDURES ASREQUIRED BY SECTION 32-2-204(A)(2)(J) OF THE WEST VIRGINIA UNIFORMSECURITIES LAW AND REGULATIONS.



Resolution:


Consent







Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTION 32-2-204 OF THE WEST VIRGINIA UNIFORMSECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDERED TOCOMPLY WITH SECTION 32-2-204 OF THE WEST VIRGINIA UNIFORMSECURITIES ACT IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. MUST PAY A TOTAL OF $80,000,000 (OF WHICH $250,000 ISALLOCATED TO THE STATE OF WEST VIRGINIA) INCLUDING $25,000,000 ASA PENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS ANDOTHER MONIES, $25,000,000 TO BE USED FOR PROCUREMENT OFINDEPENDENT RESEARCH AND $5,000,000 TO BE USED FOR INVESTOREDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE WEST VIRGINIA COMMISSIONER OFSECURITIES CERTAIN CHARGES ARISING FROM AN INVESTIGATION OFRESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING SECTION 32-2-204 OF THE WEST VIRGINIAUNIFORM SECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDEREDTO COMPLY WITH SECTION 32-2-204 OF THE WEST VIRGINIA UNIFORMSECURITIES ACT IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALMUST PAY A TOTAL OF $80,000,000 (OF WHICH $250,000 IS ALLOCATED TOTHE STATE OF WEST VIRGINIA) INCLUDING $25,000,000 AS A PENALTY;$25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES,$25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.







APPLICANT HAS SETTLED WITH THE WEST VIRGINIA COMMISSIONER OFSECURITIES CERTAIN CHARGES ARISING FROM AN INVESTIGATION OFRESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING SECTION 32-2-204 OF THE WEST VIRGINIAUNIFORM SECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDEREDTO COMPLY WITH SECTION 32-2-204 OF THE WEST VIRGINIA UNIFORMSECURITIES ACT IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALMUST PAY A TOTAL OF $80,000,000 (OF WHICH $250,000 IS ALLOCATED TOTHE STATE OF WEST VIRGINIA) INCLUDING $25,000,000 AS A PENALTY;$25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES,$25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.


i


Initiated By: STATE OF NEBRASKA, DEPARTMENT OF BANKING AND FINANCE


Disgorgement


CEASE AND DESIST, UNDERTAKING


Docket/Case Number:



Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 8-1103(9)(A)(VII) OF THESECURITIES ACT OF NEBRASKA IN ISSUING RESEARCH REPORTS. THEAPPLICANT FAILED TO ESTABLISH AND MAINTAIN ADEQUATESUPERVISORY PROCEDURES FOR RESEARCH AS REQUIRED BY SECTION8-1103(9)(A)(XI) OF THE SECURITIES ACT OF NEBRASKA.



Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE SECURITIES ACT OF NEBRASKA. IN ADDITION THEAPPLICANT WAS ORDERED TO COMPLY WITH THE SECURITIES ACT OFNEBRASKA IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. MUST PAY A TOTAL OF $80,000,000 (OF WHICH $250,000 ISALLOCATED TO THE STATE OF NEBRASKA) INCLUDING $25,000,000 AS APENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHERMONIES, $25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION


Consent






ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE SECURITIES ACT OF NEBRASKA. IN ADDITION THEAPPLICANT WAS ORDERED TO COMPLY WITH THE SECURITIES ACT OFNEBRASKA IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. MUST PAY A TOTAL OF $80,000,000 (OF WHICH $250,000 ISALLOCATED TO THE STATE OF NEBRASKA) INCLUDING $25,000,000 AS APENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHERMONIES, $25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION

Firm Statement APPLICANT HAS SETTLED WITH THE STATE OF NEBRASKA, DEPARTMENTOF BANKING AND FINANCE CERTAIN CHARGES ARISING FROM ANINVESTIGATION OF RESEARCH ANALYST CONFLICTS OF INTEREST. THISSETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHER BROKERAGEFIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMS HAVEREACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC, NASD,AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. ("UBS FINANCIAL") HAVEAGREED TO PAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS -$25 MILLION – WILL BE PAID IN CONNECTION WITH RELATEDPROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CERTAIN CUSTOMERS. THEREMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. WITHOUT ADMITTING OR DENYING THE FINDINGSOF FACT AND CONCLUSIONS OF LAW CONTAINED IN THE CONSENTORDER, THE APPLICANT CONSENTED TO THE ENTRY OF AN ORDERPROVIDING THAT APPLICANT WILL CEASE AND DESIST FROM VIOLATINGTHE SECURITIES ACT OF NEBRASKA. IN ADDITION THE APPLICANT WASORDERED TO COMPLY WITH THE SECURITIES ACT OF NEBRASKA INCONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIAL MUST PAY ATOTAL OF $80,000,000 (OF WHICH $250,000 IS ALLOCATED TO THE STATEOF NEBRASKA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


i


Allegations: APPLICANT ACTED IN VIOLATION OF CHAPTER 1707 OF THE OHIO REVISEDCODE [SECURITIES ACT OF OHIO] AND THE REGULATIONSPROMULGATED THEREUNDER, AS THEY RELATE TO DISHONEST ORUNETHICAL CONDUCT AND FAILURE TO SUPERVISE IN CONNECTION WITHCERTAINRESEARCH PRACTICES.







Initiated By: OHIO DEPARTMENT OF COMMERCE, DIVISION OF SECURITIES


Disgorgement


CEASE AND DESIST, UNDERTAKING


Docket/Case Number:



APPLICANT ACTED IN VIOLATION OF CHAPTER 1707 OF THE OHIO REVISEDCODE [SECURITIES ACT OF OHIO] AND THE REGULATIONSPROMULGATED THEREUNDER, AS THEY RELATE TO DISHONEST ORUNETHICAL CONDUCT AND FAILURE TO SUPERVISE IN CONNECTION WITHCERTAINRESEARCH PRACTICES.


Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING CHAPTER 1707 OF THE OHIO REVISED CODE. IN ADDITION THEAPPLICANT WAS ORDERED TO COMPLY WITH THE CHAPTER 1707 OF THEOHIO REVISED CODE IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. MUST PAY A TOTAL OF $80,000,000 (OF WHICH $874,773 ISALLOCATED TO THE STATE OF OHIO) INCLUDING $25,000,000 AS APENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHERMONIES, $25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE OHIO DEPARTMENT OF COMMERCE,DIVISION OF SECURITIES CERTAIN CHARGES ARISING FROM ANINVESTIGATION OF RESEARCH ANALYST CONFLICTS OF INTEREST. THISSETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHER BROKERAGEFIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMS HAVEREACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC, NASD,AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. ("UBS FINANCIAL") HAVEAGREED TO PAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS -$25 MILLION – WILL BE PAID IN CONNECTION WITH RELATEDPROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CERTAIN CUSTOMERS. THEREMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. WITHOUT ADMITTING OR DENYING THE FINDINGSOF FACT AND CONCLUSIONS OF LAW CONTAINED IN THE CONSENTORDER, THE APPLICANT CONSENTED TO THE ENTRY OF AN ORDERPROVIDING THAT APPLICANT WILL CEASE AND DESIST FROM VIOLATINGTHE CHAPTER 1707 OF THE OHIO REVISED CODE. IN ADDITION THEAPPLICANT WAS ORDERED TO COMPLY WITH THE CHAPTER 1707 OF THEOHIO REVISED CODE IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALMUST PAY A TOTAL OF $80,000,000 (OF WHICH $874,773 IS ALLOCATED TOTHE STATE OF OHIO) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION


Consent






APPLICANT HAS SETTLED WITH THE OHIO DEPARTMENT OF COMMERCE,DIVISION OF SECURITIES CERTAIN CHARGES ARISING FROM ANINVESTIGATION OF RESEARCH ANALYST CONFLICTS OF INTEREST. THISSETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHER BROKERAGEFIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMS HAVEREACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC, NASD,AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. ("UBS FINANCIAL") HAVEAGREED TO PAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS -$25 MILLION – WILL BE PAID IN CONNECTION WITH RELATEDPROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CERTAIN CUSTOMERS. THEREMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. WITHOUT ADMITTING OR DENYING THE FINDINGSOF FACT AND CONCLUSIONS OF LAW CONTAINED IN THE CONSENTORDER, THE APPLICANT CONSENTED TO THE ENTRY OF AN ORDERPROVIDING THAT APPLICANT WILL CEASE AND DESIST FROM VIOLATINGTHE CHAPTER 1707 OF THE OHIO REVISED CODE. IN ADDITION THEAPPLICANT WAS ORDERED TO COMPLY WITH THE CHAPTER 1707 OF THEOHIO REVISED CODE IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALMUST PAY A TOTAL OF $80,000,000 (OF WHICH $874,773 IS ALLOCATED TOTHE STATE OF OHIO) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION


i


Initiated By: STATE AUDITOR AND COMMISSIONER OF SECURITIES OF THE STATE OFMONTANA


Disgorgement


Docket/Case Number: I 05—1-03-118



Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 30-10-201(13)(G) OF THESECURITIES ACT OF MONTANA IN ISSUING RESEARCH REPORTS. THEAPPLICANT ALSO FAILED TO ESTABLISH AND MAINTAIN ADEQUATESUPERVISORY PROCEDURES FOR RESEARCH AS REQUIRED BY SECTION30-10-201(13)(K) OF THE SECURITIES ACT OF MONTANA.








CEASE AND DESIST


Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE SECURITIES ACT OF MONTANA. IN ADDITION THEAPPLICANT WAS ORDERED TO COMPLY WITH THE SECURITIES ACT OFMONTANA IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. MUST PAY A TOTAL OF $80,000,000 (OF WHICH $250,000 ISALLOCATED TO THE STATE OF MONATANA) INCLUDING $25,000,000 AS APENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHERMONIES, $25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE STATE AUDITOR AND COMMISSIONEROF SECURITIES OF THE STATE OF MONTANA CERTAIN CHARGES ARISINGFROM AN INVESTIGATION OF RESEARCH ANALYST CONFLICTS OFINTEREST. THIS SETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHERBROKERAGE FIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMSHAVE REACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC,NASD, AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. ("UBS FINANCIAL") HAVEAGREED TO PAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS -$25 MILLION – WILL BE PAID IN CONNECTION WITH RELATEDPROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CERTAIN CUSTOMERS. THEREMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. WITHOUT ADMITTING OR DENYING THE FINDINGSOF FACT AND CONCLUSIONS OF LAW CONTAINED IN THE CONSENTORDER, THE APPLICANT CONSENTED TO THE ENTRY OF AN ORDERPROVIDING THAT APPLICANT WILL CEASE AND DESIST FROM VIOLATINGTHE SECURITIES ACT OF MONTANA. IN ADDITION THE APPLICANT WASORDERED TO COMPLY WITH THE SECURITIES ACT OF MONTANA INCONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIAL MUST PAY ATOTAL OF $80,000,000 (OF WHICH $250,000 IS ALLOCATED TO THE STATEOF MONTANA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


Consent






APPLICANT HAS SETTLED WITH THE STATE AUDITOR AND COMMISSIONEROF SECURITIES OF THE STATE OF MONTANA CERTAIN CHARGES ARISINGFROM AN INVESTIGATION OF RESEARCH ANALYST CONFLICTS OFINTEREST. THIS SETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHERBROKERAGE FIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMSHAVE REACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC,NASD, AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. ("UBS FINANCIAL") HAVEAGREED TO PAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS -$25 MILLION – WILL BE PAID IN CONNECTION WITH RELATEDPROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CERTAIN CUSTOMERS. THEREMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. WITHOUT ADMITTING OR DENYING THE FINDINGSOF FACT AND CONCLUSIONS OF LAW CONTAINED IN THE CONSENTORDER, THE APPLICANT CONSENTED TO THE ENTRY OF AN ORDERPROVIDING THAT APPLICANT WILL CEASE AND DESIST FROM VIOLATINGTHE SECURITIES ACT OF MONTANA. IN ADDITION THE APPLICANT WASORDERED TO COMPLY WITH THE SECURITIES ACT OF MONTANA INCONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIAL MUST PAY ATOTAL OF $80,000,000 (OF WHICH $250,000 IS ALLOCATED TO THE STATEOF MONTANA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


i


Initiated By: VERMONT





Docket/Case Number: 03-064-S




Allegations: VIOLATIONS OF THE VERMONT SECURITIES ACT IN THAT: (A) FIRM FAILEDTO ENSURE THAT ANALYSTS WHO ISSUED RESEARCH WERE ADEQUATELYINSULATED FROM PRESSURES AND INFLUENCES FROM COVEREDCOMPANIES AND INVESTMENT BANKING WHICH CONDUCT IS ADISHONEST AND UNETHICAL PRACTICE UNDER SECTION 4221A(A)(8) OFTHE ACT; AND (B) FIRM FAILED TO REASONABLY SUPERVISE ITSEMPLOYEES TO ENSURE THAT ITS ANALYSTS WHO ISSUED RESEARCHWERE ADEQUATELY INSULATED FROM PRESSURES AND INFLUENCESFROM COVERED COMPANIES AND INVESTMENT BANKING AS REQUIREDBY SECTION 4221A(A)(11) OF THE ACT.



Resolution:


Yes

Order







Sanction Details: GLOBAL SETTLEMENT RESULTING FROM INVESTIGATION BY ANALYSTTASK FORCE. FIRM ADMITS THE JURISDICTION OF THE COMMISSIONER,NEITHER ADMITS NOR DENIES THE FINDINGS OF FACT AND CONCLUSIONSOF LALW CONTAINED IN THE ORDER, AND CONSENTS TO THE ENTRY OFTHE ORDER BY THE COMMISSIONER.


Yes



Initiated By: VERMONT DEPARTMENT OF BANKING AND INSURANCE SECURITIES ANDHEALTH CARE ADMINISTRATION


Cease and Desist




Docket/Case Number: DOCKET NO. 03-064-S



Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 4221A(A)(8)AND4221A(A)(11)OF THE SECURITIES ACT OF VERMONT IN ISSUING RESEARCHREPORTS. APPLICANT ALSO FAILED TO ESTABLISH AND MAINTAINADEQUATE SUPERVISORY PROCEDURES FOR RESEARCH AS REQUIREDBY SECTION 421A(A)(11) OF THE SECURITIES ACT OF VERMONT.



Resolution:


Consent







Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE SECURITIES ACT OF VERMONT. IN ADDITION THEAPPLICANT WAS ORDERED TO COMPLY WITH THE SECURITIES ACT OFVERMONT IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. MUST PAY A TOTAL OF $80,000,000 INCLUDING $25,000,000AS A PENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS ANDOTHER MONIES, $25,000,000 TO BE USED FOR PROCUREMENT OFINDEPENDENT RESEARCH AND $5,000,000 TO BE USED FOR INVESTOREDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE VERMONT STATE SECURITIESDIVISION CERTAIN CHARGES ARISING FROM AN INVESTIGATION OFRESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING THE SECURITIES ACT OF VERMONT. INADDITION THE APPLICANT WAS ORDERED TO COMPLY WITH THESECURITIES ACT OF VERMONT IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL PAY A TOTAL OF $80,000,000 INCLUDING$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.








i


Initiated By: IOWA


Cease and Desist


CIVIL PENALTY


Docket/Case Number: C04-12-434



Other Product Type(s): N/A

Allegations: "INVESTMENT BANKING INTERESTS" INFLUENCED THE FIRM'S DECISIONSTO INITIATE AND MAINTAIN RESEARCH COVERAGE; ANALYSTS RARELYISSUED NEUTRAL OR NEGATIVE RATINGS; IN INSTANCES, THE FIRMPUBLISHED EXAGGERATED OR UNWARRANTED RESEARCH; THE FIRMRECEIVED AND MADE PAYMENTS FOR RESEARCH; THE FIRM FAILED TOADEQUATELY SUPERVISE ITS RESEARCH AND INVESTMENT BANKINGDEPARTMENTS.


Appealed To and Date AppealFiled:

N/A


Resolution:

Other Sanctions Ordered: UBS CONSENTS TO THE ENTRY OF THE ORDER BY THE COMMISSIONERBUT NEITHER ADMITS NOR DENIES THE FINDINGS OF FACT ANDCONCLUSIONS OF LAW.


No


Consent






Sanction Details: ONE OF SEVERAL ANALYST TASK FORCE CASES. SEVERALUNDERTAKINGS.

Regulator Statement N/A


Initiated By: IOWA INSURANCE DIVISION, IOWA SECURITIES BUREAU


Cease and Desist




Docket/Case Number: C04-12-434



Allegations: THE APPLICANT ACTED IN VIOLATION OF SECTION 502.304(1)(G) OF THEIOWA UNIFORM SECURITIES ACT IN ISSUING RESEARCH REPORTS. THEAPPLICANT ALSO FAILED TO ESTABLISH AND MAINTAIN ADEQUATESUPERVISORY PROCEDURES FOR RESEARCH AS REQUIRED BY SECTION502.304(1)(J) OF THE IOWA UNIFORM SECURITIES ACT.



Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTION 502.304(1)(G) AND (J) OF THE IOWA UNIFORMSECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDERED TOCOMPLY WITH SECTION 502.304(1)(G) AND (J) OF THE IOWA UNIFORMSECURITIES ACT IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. MUST PAY A TOTAL OF $80,000,000 (OF WHICH $250,000 ISALLOCATED TO THE STATE OF IOWA) INCLUDING $25,000,000 AS APENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHERMONIES, $25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.


Consent






ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTION 502.304(1)(G) AND (J) OF THE IOWA UNIFORMSECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDERED TOCOMPLY WITH SECTION 502.304(1)(G) AND (J) OF THE IOWA UNIFORMSECURITIES ACT IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. MUST PAY A TOTAL OF $80,000,000 (OF WHICH $250,000 ISALLOCATED TO THE STATE OF IOWA) INCLUDING $25,000,000 AS APENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHERMONIES, $25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE IOWA SECURITIES BUREAU CERTAINCHARGES ARISING FROM AN INVESTIGATION OF RESEARCH ANALYSTCONFLICTS OF INTEREST. THIS SETTLEMENT, AND SETTLEMENTS WITHCERTAIN OTHER BROKERAGE FIRMS, ARE PART OF A GLOBALSETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUS STATEREGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING SECTION 502.304(1)(G) AND (J) OF THE IOWAUNIFORM SECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDEREDTO COMPLY WITH SECTION 502.304(1)(G) AND (J) OF THE IOWA UNIFORMSECURITIES ACT IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALMUST PAY A TOTAL OF $80,000,000 (OF WHICH $250,000 IS ALLOCATED TOTHE STATE OF IOWA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


i


Allegations: THIS ACTION IS IN CONNECTION WITH THE GLOBAL ANALYST SETTLEMENTWHICH INCORPORATED THE FINAL JUDGMENT OF THE U.S. DISTRICTCOURT FOR THE SOUTHERN DISTRICT OF NEW YORK, CIVIL ACTION NO.03 CIV. 2943 (WHP) ENTERED OCTOBER 31, 2003.







Initiated By: PA SECURITIES COMMISSIONCONTACT: G. PHILIP RUTLEDGE (717) 787-8059


Other


RESPONDENT UBS SECURITIES LLC F/K/A UBS WARBURG LLC AND OTHERNAMED RESPONDENT PAID A $946,269.00 ADMINISTRATIVE ASSESSMENT.





Other Product Type(s): SECURITIES

THIS ACTION IS IN CONNECTION WITH THE GLOBAL ANALYST SETTLEMENTWHICH INCORPORATED THE FINAL JUDGMENT OF THE U.S. DISTRICTCOURT FOR THE SOUTHERN DISTRICT OF NEW YORK, CIVIL ACTION NO.03 CIV. 2943 (WHP) ENTERED OCTOBER 31, 2003.


Resolution:


Sanction Details: RESPONDENT UBS SECURITIES LLC F/K/A UBS WARBURG LLC AND OTHERNAMED RESPONDENT PAID A $946,269.00 ADMINISTRATIVE ASSESSMENT.


Settled


Initiated By: PENNSYLVANIA SECURITIES COMMISSION


Disgorgement


UNDERTAKING





Allegations: APPLICANT ACTED IN VIOLATION OF THE PENNSYLVANIA SECURITIES ACTOF 1972 AND THE REGULATIONS PROMULGATED THEREUNDERWITH RESPECT TO CERTAIN RESEARCH PRACTICES.








UNDERTAKING


Resolution:


Sanction Details: THE APPLICANT WAS ORDERED TO COMPLY WITH THE PENNSYLVANIASECURITIES ACT OF 1972 IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. MUST PAY A TOTAL OF$80,000,000 (OF WHICH $946,269 IS ALLOCATED TO THE COMMONWEALTHOF PENNSYLVANIA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE PENNSYLVANIA SECURITIESCOMMISSION CERTAIN CHARGES ARISING FROM AN INVESTIGATION OFRESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT THE APPLICANT COMPLYWITH THE PENNSYLVANIA SECURITIES ACT OF 1972 IN CONNECTION WITHTHE RESEARCH PRACTICES REFERENCED IN THE ORDER AND WITHCERTAIN UNDERTAKINGS TO ADOPT ENHANCED POLICIES ANDPROCEDURES REASONABLY DESIGNED TO ADDRESS POTENTIALCONFLICTS OF INTEREST ARISING FROM RESEARCH PRACTICES.APPLICANT AND ITS AFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF$80,000,000 (OF WHICH $946,269 IS ALLOCATED TO THE COMMONWEALTHOF PENNSYLVANIA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


Consent






APPLICANT HAS SETTLED WITH THE PENNSYLVANIA SECURITIESCOMMISSION CERTAIN CHARGES ARISING FROM AN INVESTIGATION OFRESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT THE APPLICANT COMPLYWITH THE PENNSYLVANIA SECURITIES ACT OF 1972 IN CONNECTION WITHTHE RESEARCH PRACTICES REFERENCED IN THE ORDER AND WITHCERTAIN UNDERTAKINGS TO ADOPT ENHANCED POLICIES ANDPROCEDURES REASONABLY DESIGNED TO ADDRESS POTENTIALCONFLICTS OF INTEREST ARISING FROM RESEARCH PRACTICES.APPLICANT AND ITS AFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF$80,000,000 (OF WHICH $946,269 IS ALLOCATED TO THE COMMONWEALTHOF PENNSYLVANIA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


i


Initiated By: NASD







Allegations: NASD CONDUCT RULES 2110 AND 2320 AND NASD MARKETPLACE RULE6130(D) - RESPONDENT MEMBER, IN TRANSACTIONS FOR OR WITH ACUSTOMER, FAILED TO USE REASONABLE DILIGENCE TO ASCERTAIN THEBEST INTER-DEALER MARKET AND FAILED TO BUY OR SELL IN SUCHMARKET SO THAT THE RESULANT PRICE TO ITS CUSTOMER WAS AFAVORABLE AS POSSIBLE UNDER PREVAILING MARKET CONDITIONS;FAILED TO REPORT TO ACT THE CORRECT SYMBOL INDICATING WHETHERTHE FIRM EXECUTED ONE TRANSACTION IN AN ELIGIBLE SECURITY IN APRINCIPAL, RISKLESS PRINCIPAL OR AGENCY CAPACITY; FAILED TOREPORT TO ACT THE CORRECT SYMBOL INDICATING WHETHER THETRANSACTION WAS A BUY, SELL, SELL SHORT, SELL SHORT EXEMPT ORCROSS FOR TRANSACTIONS IN ELIGIBLE SECURITIES.



Resolution:


No








Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, RESPONDENTMEMBER CONSENTED TO THE DESCRIBED SANCTIONS AND TO THEENTRY OF FINDINGS; THERFORE, THE FIRM IS CENSURED AND FINED$9,500.


No



Initiated By: NASD


Other


CENSURE AND FINE


Docket/Case Number: CMS030304AWC



Allegations: VIOLATIONS OF: 1) NASD CONDUCT RULES 2110 AND 2320 BY FAILING, INSIX TRANSACTIONS FOR OR WITH A CUSTOMER, TO USE REASONABLEDILIGENCE TO ASCERTAIN THE BEST INTER-DEALER MARKET AND FAILINGTO BUY OR SELL IN SUCH MARKET SO THAT THE RESULTANT PRICE TOTHE CUSTOMER WAS AS FAVORABLE AS POSSIBLE UNDER PREVAILINGMARKET CONDITIONS. 2) NASD MARKETPLACE RULE 6130(D) BY FAILINGTO REPORT TO ACT THE CORRECT SYMBOL INDICATING WHETHER THEFIRM EXECUTED ONE TRANSACTION IN AN ELIGIBLE SECURITY IN APRINCIPAL, RISKLESS PRINCIPAL OR AGENCY CAPACITY AND FAILING TOREPORT TO ACT THE CORRECT SYMBOL INDICATING WHETHER THETRANSACTION WAS A BUY, SELL, SELL SHORT, SELL SHORT EXEMPT ORCROSS FOR FOUR TRANSACTIONS IN ELIGIBLE SECURITIES.








Resolution:


Sanction Details: MONETARY FINE OF $9,500.00

Firm Statement ON DECEMBER 31, 2003 A LETTER OF ACCEPTANCE, WAIVER ANDCONSENT WAS ACCEPTED BY NASD OFFICE OF DISCIPLINARY AFFAIRSAND NATIONAL ADJUDICATORY COUNCIL.




i


Initiated By: VIRGINIA - DIVISION OF SECURITIES





Docket/Case Number: SEC-2003-00021



Other Product Type(s): CONTACT UNDERSIGNED FOR FURTHER INFORMATION

Allegations: COMMISSION RULES 21 VAX 5-20-260 B AND 21 VAC 5-20-280 E 12 WEREVIOLATED. PLEASE CONTACT THE UNDERSIGNED FOR FURTHERINFORMATION ABOUT THE CONCLUSIONS OF LAW.



Resolution:


No


Settled






Other Sanctions Ordered: CONTACT UNDERSIGNED FOR FURTHER INFORMATION

Sanction Details: CONTACT UNDERSIGNED FOR FURTHER INFORMATION

Regulator Statement $545,408.00 WAS RECEIVED AS PART OF THE SETTLEMENT AGREEMENTUBS SECURITIES, LLC ENTERED INTO WITH ALL FIFTY STATES, THEDISTRICT OF COLUMBIA AND THE COMMONWEALTH OF PUERTO RICO,THROUGH A COMMITTEE OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION ("NASAA"). CO-DEFENDANTS WERELISTED ON THE SETTLEMENT ORDER, PER NEGOTIATIONS WITH THEFIRM. "UBS" PAID A TOTAL OF $545,408. THIS AMOUNT WAS NOT RECEIVEDTWICE FROM THE TWO DEFENDANTS NAMED ON THE SETTLEMENTORDER. JURISDICTION REPORTING INCIDENT: VIRGINIA, STATECORPORATION COMMISSION, DIVISION OF SECURITIES & RETAILFRANCHISING. CONTACT KEVIN M. FURR AT 804-371-9081.


Initiated By: COMMONWEALTH OF VIRGINIA, STATE CORPORATION COMMISSION


Cease and Desist



Docket/Case Number:



Allegations: APPLICANT ACTED IN VIOLATION OF VIRGINIA SECURITIES RULE 21 VAC 5-20-280(E)(12) IN ISSUING RESEARCH REPORTS. THEAPPLICANT ALSO FAILED TO ESTABLISH AND MAINTAIN ADEQUATESUPERVISORY PROCEDURES FOR RESEARCH AS REQUIRED BYSECURITIES RULE 21 VAC 5-20-260.



Resolution:



Consent







Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECURITIES RULE 21 VAC 5-20-280(E)(12) AND RULE 21 VAC 5-20-260. IN ADDITION THE APPLICANT WAS ORDERED TO COMPLY WITHTHE VIRGINIA SECURITIES ACT AND THE REGULATIONS PROMULGATEDTHEREUNDER IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS SECURITIESLLC MUST PAY A TOTAL OF $80,000,000 (OF WHICH $545,408 IS ALLOCATEDTO THE COMMONWEALTH OF VIRGINIA) INCLUDING $25,000,000 AS APENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHERMONIES, $25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE COMMONWEALTH OF VIRGINIA,STATE CORPORATION COMMISSION CERTAIN CHARGES ARISING FROM ANINVESTIGATION OF RESEARCH ANALYST CONFLICTS OF INTEREST. THISSETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHER BROKERAGEFIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMS HAVEREACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC, NASD,AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS SECURITIES LLC HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING SECURITIES RULE 21 VAC 5-20-280(E)(12) ANDRULE 21 VAC 5-20-260. IN ADDITION THE APPLICANT WAS ORDERED TOCOMPLY WITH THE VIRGINIA SECURITIES ACT AND THE REGULATIONSPROMULGATED THEREUNDER IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS SECURITIES LLC MUST PAY A TOTAL OF $80,000,000 (OFWHICH $545,408 IS ALLOCATED TO THE COMMONWEALTH OF VIRGINIA)INCLUDING $25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION. 457©2022 FINRA. All rights reserved. Report about UBS SECURITIES LLC





APPLICANT HAS SETTLED WITH THE COMMONWEALTH OF VIRGINIA,STATE CORPORATION COMMISSION CERTAIN CHARGES ARISING FROM ANINVESTIGATION OF RESEARCH ANALYST CONFLICTS OF INTEREST. THISSETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHER BROKERAGEFIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMS HAVEREACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC, NASD,AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS SECURITIES LLC HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING SECURITIES RULE 21 VAC 5-20-280(E)(12) ANDRULE 21 VAC 5-20-260. IN ADDITION THE APPLICANT WAS ORDERED TOCOMPLY WITH THE VIRGINIA SECURITIES ACT AND THE REGULATIONSPROMULGATED THEREUNDER IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS SECURITIES LLC MUST PAY A TOTAL OF $80,000,000 (OFWHICH $545,408 IS ALLOCATED TO THE COMMONWEALTH OF VIRGINIA)INCLUDING $25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


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Initiated By: SOUTH DAKOTA DIRECTOR OF SECURITIES




UNDERTAKING, CEASE AND DESIST


Docket/Case Number: CASE # 651



Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 47-31A-204(A)(2)(G) OF THESOUTH DAKOTA UNIFORM SECURITIES ACT IN ISSUING RESEARCHREPORTS. THE APPLICANT ALSO FAILED TO ESTABLISH AND MAINTAINADEQUATE SUPERVISORY PROCEDURES AS REQUIRED UNDER SECTION47-31A-204(A)(2)(J) OF THE SOUTH DAKOTA UNIFORM SECURITIES ACT.



Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE SOUTH DAKOTA UNIFORM SECURITIES ACT. IN ADDITIONTHE APPLICANT WAS ORDERED TO COMPLY WITH THE SOUTH DAKOTAUNIFORM SECURITIES ACT IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS SECURITIES LLC MUST PAY A TOTAL OF $80,000,000 (OFWHICH $250,000 IS ALLOCATED TO THE STATE OF SOUTH DAKOTA)INCLUDING $25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


Consent






ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE SOUTH DAKOTA UNIFORM SECURITIES ACT. IN ADDITIONTHE APPLICANT WAS ORDERED TO COMPLY WITH THE SOUTH DAKOTAUNIFORM SECURITIES ACT IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS SECURITIES LLC MUST PAY A TOTAL OF $80,000,000 (OFWHICH $250,000 IS ALLOCATED TO THE STATE OF SOUTH DAKOTA)INCLUDING $25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE SOUTH DAKOTA DIRECTOR OFSECURITIES CERTAIN CHARGES ARISING FROM AN INVESTIGATION OFRESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS SECURITIES LLCHAVE AGREED TO PAY $25 MILLION AS DISGORGEMENT AND ANADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OFTHESE PAYMENTS - $25 MILLION – WILL BE PAID IN CONNECTION WITHRELATED PROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BEPLACED INTO A DISTRIBUTION FUND FOR THE BENEFIT OF CERTAINCUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVE RELATEDPROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTING ORDENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINEDIN THE CONSENT ORDER, THE APPLICANT CONSENTED TO THE ENTRY OFAN ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE SOUTH DAKOTA UNIFORM SECURITIES ACT. IN ADDITIONTHE APPLICANT WAS ORDERED TO COMPLY WITH THE SOUTH DAKOTAUNIFORM SECURITIES ACT IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS SECURITIES LLC MUST PAY A TOTAL OF $80,000,000 (OFWHICH $250,000 IS ALLOCATED TO THE STATE OF SOUTH DAKOTA)INCLUDING $25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


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Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 90.420(1)(H) OF THE NEVADAUNIFORM SECURITIES ACT AND SECTION 90.327 OF THE NEVADAADMINISTRATIVE CODE IN ISSUING RESEARCH REPORTS. THE APPLICANTALSO FAILED TO ESTABLISH AND MAINTAIN ADEQUATE SUPERVISORYPROCEDURES FOR RESEARCH AS REQUIRED OF SECTION 90.420(1)(K) OFTHE NEVADA UNIFORM SECURITIES ACT.







Initiated By: NEVADA OFFICE OF THE SECRETARY OF STATE, SECURITIES DIVISION


Cease and Desist




Docket/Case Number: I03-188



APPLICANT ACTED IN VIOLATION OF SECTION 90.420(1)(H) OF THE NEVADAUNIFORM SECURITIES ACT AND SECTION 90.327 OF THE NEVADAADMINISTRATIVE CODE IN ISSUING RESEARCH REPORTS. THE APPLICANTALSO FAILED TO ESTABLISH AND MAINTAIN ADEQUATE SUPERVISORYPROCEDURES FOR RESEARCH AS REQUIRED OF SECTION 90.420(1)(K) OFTHE NEVADA UNIFORM SECURITIES ACT.


Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTIONS 90.420(1)(H) AND 90.420(1)(K) OF THE NEVADAUNIFORM SECURITIES ACT AND SECTION 90.327 OF THE NEVADAADMINISTRATIVE CODE. IN ADDITION THE APPLICANT WAS ORDERED TOCOMPLY WITH THE SECTIONS 90.420(1)(H) AND 90.420(1)(K) OF THENEVADA UNIFORM SECURITIES ACT AND SECTION 90.327 OF THE NEVADAADMINISTRATIVE CODE IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. MUST PAY A TOTAL OF $80,000,000 (OF WHICH $250,000 ISALLOCATED TO THE STATE OF NEVADA) INCLUDING $25,000,000 AS APENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHERMONIES, $25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE NEVADA SECRETARY OF STATECERTAIN CHARGES ARISING FROM AN INVESTIGATION OF RESEARCHANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING SECTIONS 90.420(1)(H) AND 90.420(1)(K) OF THENEVADA UNIFORM SECURITIES ACT AND SECTION 90.327 OF THE NEVADAADMINISTRATIVE CODE. IN ADDITION THE APPLICANT WAS ORDERED TOCOMPLY WITH SECTIONS 90.420(1)(H) AND 90.420(1)(K) OF THE NEVADAUNIFORM SECURITIES ACT AND SECTION 90.327 OF THE NEVADAADMINISTRATIVE CODE IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALMUST PAY A TOTAL OF $80,000,000 (OF WHICH $250,000 IS ALLOCATED TOTHE STATE OF NEVADA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000TO BE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


Consent





www.finra.org/brokercheck User GuidanceAPPLICANT HAS SETTLED WITH THE NEVADA SECRETARY OF STATECERTAIN CHARGES ARISING FROM AN INVESTIGATION OF RESEARCHANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING SECTIONS 90.420(1)(H) AND 90.420(1)(K) OF THENEVADA UNIFORM SECURITIES ACT AND SECTION 90.327 OF THE NEVADAADMINISTRATIVE CODE. IN ADDITION THE APPLICANT WAS ORDERED TOCOMPLY WITH SECTIONS 90.420(1)(H) AND 90.420(1)(K) OF THE NEVADAUNIFORM SECURITIES ACT AND SECTION 90.327 OF THE NEVADAADMINISTRATIVE CODE IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALMUST PAY A TOTAL OF $80,000,000 (OF WHICH $250,000 IS ALLOCATED TOTHE STATE OF NEVADA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000TO BE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


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Initiated By: MINNESOTA DEPARTMENT OF COMMERCE


Docket/Case Number:


Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 80A.07, SUBDIVISION 1(7) OFTHE MINNESOTA UNIFORM SECURITIES ACT IN ISSUING RESEARCHREPORTS. APPLICANT ALSO FAILED TO ESTABLISH AND MAINTAINADEQUATE SUPERVISORY PROCEDURES AS REQUIRED BY CHAPTER2875.0910, SUBPARAGRAPH 3 OF THE RULES PROMULGATED BY THEDEPARTMENT OF COMMERCE.










CEASE AND DESIST, DISGORGEMENT AND UNDERTAKING




Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING CHAPTER 80A OF THE MINNESOTA UNIFORM SECURITIES ACTAND CHAPTER 2875 OF THE RULES PROMULGATED THEREUNDER. INADDITION THE APPLICANT WAS ORDERED TO COMPLY WITH CHAPTER 80AOF THE MINNESOTA UNIFORM SECURITIES ACT AND CHAPTER 2875 OFTHE RULES PROMULGATED THEREUNDER IN CONNECTION WITH THERESEARCH PRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. MUST PAY A TOTAL OF$80,000,000 (OF WHICH $379,051 IS ALLOCATED TO THE STATE OFMINNESOTA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE MINNESOTA DEPARTMENT OFCOMMERCE CERTAIN CHARGES ARISING FROM AN INVESTIGATION OFRESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING CHAPTER 80A OF THE MINNESOTA UNIFORMSECURITIES ACT AND CHAPTER 2875 OF THE RULES PROMULGATEDTHEREUNDER. IN ADDITION THE APPLICANT WAS ORDERED TO COMPLYWITH CHAPTER 80A OF THE MINNESOTA UNIFORM SECURITIES ACT ANDCHAPTER 2875 OF THE RULES PROMULGATED THEREUNDER INCONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIAL MUST PAY ATOTAL OF $80,000,000 (OF WHICH $379,051 IS ALLOCATED TO THE STATEOF MINNESOTA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


Consent






APPLICANT HAS SETTLED WITH THE MINNESOTA DEPARTMENT OFCOMMERCE CERTAIN CHARGES ARISING FROM AN INVESTIGATION OFRESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING CHAPTER 80A OF THE MINNESOTA UNIFORMSECURITIES ACT AND CHAPTER 2875 OF THE RULES PROMULGATEDTHEREUNDER. IN ADDITION THE APPLICANT WAS ORDERED TO COMPLYWITH CHAPTER 80A OF THE MINNESOTA UNIFORM SECURITIES ACT ANDCHAPTER 2875 OF THE RULES PROMULGATED THEREUNDER INCONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIAL MUST PAY ATOTAL OF $80,000,000 (OF WHICH $379,051 IS ALLOCATED TO THE STATEOF MINNESOTA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


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Initiated By: MARYLAND SECURITIES COMMISSIONER


Cease and Desist







Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 11-412(A)(7) OF THEMARYLAND SECURITIES ACT IN ISSUING RESEARCH REPORTS. THEAPPLICANT ALSO FAILED TO ESTABLISH AND MAINTAIN ADEQUATESUPERVISORY PROCEDURES AS REQUIRED UNDER SECTION 11-412(A)(10)OF THE MARYLAND SECURITIES ACT.


Resolution: Consent463©2022 FINRA. All rights reserved. Report about UBS SECURITIES LLC






Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE MARYLAND SECURITIES ACT. IN ADDITION THE APPLICANTWAS ORDERED TO COMPLY WITH THE MARYLAND SECURITIES ACT INCONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIAL SERVICES INC.MUST PAY A TOTAL OF $80,000,000 (OF WHICH $408,100 IS ALLOCATED TOTHE STATE OF MARYLAND) INCLUDING $25,000,000 AS A PENALTY;$25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES,$25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE SECURITIES COMMISSIONER OFMARYLAND CERTAIN CHARGES ARISING FROM AN INVESTIGATION OFRESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING THE MARYLAND SECURITIES ACT. IN ADDITIONTHE APPLICANT WAS ORDERED TO COMPLY WITH THE MARYLANDSECURITIES ACT IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALMUST PAY A TOTAL OF $80,000,000 (OF WHICH $408,100 IS ALLOCATED TOTHE STATE OF MARYLAND) INCLUDING $25,000,000 AS A PENALTY;$25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES,$25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.


Consent






APPLICANT HAS SETTLED WITH THE SECURITIES COMMISSIONER OFMARYLAND CERTAIN CHARGES ARISING FROM AN INVESTIGATION OFRESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING THE MARYLAND SECURITIES ACT. IN ADDITIONTHE APPLICANT WAS ORDERED TO COMPLY WITH THE MARYLANDSECURITIES ACT IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALMUST PAY A TOTAL OF $80,000,000 (OF WHICH $408,100 IS ALLOCATED TOTHE STATE OF MARYLAND) INCLUDING $25,000,000 AS A PENALTY;$25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES,$25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.


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Initiated By: DISTRICT OF COLUMBIA DEPARTMENT OF INSURANCE AND SECURITIESREGULATION


Cease and Desist




Docket/Case Number: SEC. CO 03-08



Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 31-5602.07(A)(9) OF THE D.C.SECURITIES ACT OF 2000 IN ISSUING RESEARCH REPORTS. THEAPPLICANT ALSO FAILED TO ESTABLISH AND MAINTAIN ADEQUATESUPERVISORY PROCEDURES FOR RESEARCH AS REQUIRED BY SECTION31-5602.07(A)(12).



Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTIONS 31-5602(A)(9) AND 31-5602(A)(12) OF THE D.C.SECURITIES ACT OF 2000. IN ADDITION THE APPLICANT WAS ORDERED TOCOMPLY WITH THE SECTIONS 31-5602(A)(9) AND 31-5602(A)(12) OF THED.C. SECURITIES ACT OF 2000 IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. MUST PAY A TOTAL OF$80,000,000 (OF WHICH $250,000 IS ALLOCATED TO THE DISTRICT OFCOLUMBIA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


Consent






ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTIONS 31-5602(A)(9) AND 31-5602(A)(12) OF THE D.C.SECURITIES ACT OF 2000. IN ADDITION THE APPLICANT WAS ORDERED TOCOMPLY WITH THE SECTIONS 31-5602(A)(9) AND 31-5602(A)(12) OF THED.C. SECURITIES ACT OF 2000 IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. MUST PAY A TOTAL OF$80,000,000 (OF WHICH $250,000 IS ALLOCATED TO THE DISTRICT OFCOLUMBIA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE DISTRICT OF COLUMBIADEPARTMENT OF INSURANCE AND SECURITIES REGULATION CERTAINCHARGES ARISING FROM AN INVESTIGATION OF RESEARCH ANALYSTCONFLICTS OF INTEREST. THIS SETTLEMENT, AND SETTLEMENTS WITHCERTAIN OTHER BROKERAGE FIRMS, ARE PART OF A GLOBALSETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUS STATEREGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING THE SECTIONS 31-5602(A)(9) AND 31-5602(A)(12)OF THE D.C. SECURITIES ACT OF 2000. IN ADDITION THE APPLICANT WASORDERED TO COMPLY WITH THE SECTIONS 31-5602(A)(9) AND 31-5602(A)(12) OF THE D.C. SECURITIES ACT OF 2000 IN CONNECTION WITHTHE RESEARCH PRACTICES REFERENCED IN THE ORDER AND WITHCERTAIN UNDERTAKINGS TO ADOPT ENHANCED POLICIES ANDPROCEDURES REASONABLY DESIGNED TO ADDRESS POTENTIALCONFLICTS OF INTEREST ARISING FROM RESEARCH PRACTICES.APPLICANT AND ITS AFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF$80,000,000 (OF WHICH $250,000 IS ALLOCATED TO THE DISTRICT OFCOLUMBIA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


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Initiated By: PUERTO RICO COMMISSIONER OF FINANCIAL INSTITUTIONS




DISGORGEMENT, UNDERTAKING, CEASE AND DESIST.


Docket/Case Number: MATTER NO. C03V-009



Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 204(A)(G) OF THE PUERTORICO UNIFORM SECURITIES ACT AND SECTION 26.1 OFREGULATION 6078 PROMULGATED THEREUNDER IN ISSUING RESEARCHREPORTS. APPLICANT ALSO FAILED TO ESTABLISH AND MAINTAINADEQUATE SUPERVISORY PROCEDURES FOR RESEARCH AS REQUIREDUNDER SECTION 204(A)(J) OF THE PUERTO RICO UNIFORM SECURITIESACT AND SECTIONS 25.4.4 AND 28.2 OF REGULATION 6078 PROMULGATEDTHEREUNDER.



Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTION 204 OF THE PUERTO RICO UNIFORM SECURITIES ACTAND REGULATION 6078 PROMULGATED THEREUNDER. IN ADDITION THEAPPLICANT WAS ORDERED TO COMPLY WITH SECTION 204 OF THEPUERTO RICO UNIFORM SECURITIES ACT AND REGULATION 6078PROMULGATED THEREUNDER IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. MUST PAY A TOTAL OF$80,000,000 (OF WHICH $293,457 IS ALLOCATED TO THE COMMONWEALTHOF PUERTO RICO) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


Consent






ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTION 204 OF THE PUERTO RICO UNIFORM SECURITIES ACTAND REGULATION 6078 PROMULGATED THEREUNDER. IN ADDITION THEAPPLICANT WAS ORDERED TO COMPLY WITH SECTION 204 OF THEPUERTO RICO UNIFORM SECURITIES ACT AND REGULATION 6078PROMULGATED THEREUNDER IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. MUST PAY A TOTAL OF$80,000,000 (OF WHICH $293,457 IS ALLOCATED TO THE COMMONWEALTHOF PUERTO RICO) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE COMMISSIONER OF FINANCIALINSTITUTIONS OF PUERTO RICO CERTAIN CHARGES ARISING FROM ANINVESTIGATION OF RESEARCH ANALYST CONFLICTS OF INTEREST. THISSETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHER BROKERAGEFIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMS HAVEREACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC, NASD,AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. ("UBS FINANCIAL") HAVEAGREED TO PAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS -$25 MILLION – WILL BE PAID IN CONNECTION WITH RELATEDPROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CERTAIN CUSTOMERS. THEREMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. WITHOUT ADMITTING OR DENYING THE FINDINGSOF FACT AND CONCLUSIONS OF LAW CONTAINED IN THE CONSENTORDER, THE APPLICANT CONSENTED TO THE ENTRY OF AN ORDERPROVIDING THAT APPLICANT WILL CEASE AND DESIST FROM VIOLATINGTHE SECTION 204 OF THE PUERTO RICO UNIFORM SECURITIES ACT ANDREGULATION 6078 PROMULGATED THEREUNDER. IN ADDITION THEAPPLICANT WAS ORDERED TO COMPLY WITH THE SECTION 204 OF THEPUERTO RICO UNIFORM SECURITIES ACT AND REGULATION 6078PROMULGATED THEREUNDER IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF $80,000,000 (OF WHICH$293,457 IS ALLOCATED TO THE COMMONWEALTH OF PUERTO RICO)INCLUDING $25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


i


Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 48-2-112(A)(2)(G) OF THETENNESSEE SECURITIES ACT IN ISSUING RESEARCH REPORTS.APPLICANT ALSO FAILED TO ESTABLISH AND MAINTAIN ADEQUATESUPERVISORY PROCEDURES FOR RESEARCH AS REQUIRED BY SECTION48-2-112(A)(2)(J) OF THE TENNESSEE SECURITIES ACT.







Initiated By: COMMISSIONER OF COMMERCE AND INSURANCE OF THE STATE OFTENNESSEE






Docket/Case Number: FILE NO. 03-010



Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 48-2-112(A)(2)(G) OF THETENNESSEE SECURITIES ACT IN ISSUING RESEARCH REPORTS.APPLICANT ALSO FAILED TO ESTABLISH AND MAINTAIN ADEQUATESUPERVISORY PROCEDURES FOR RESEARCH AS REQUIRED BY SECTION48-2-112(A)(2)(J) OF THE TENNESSEE SECURITIES ACT.


Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTIONS 48-2-112(A)(2)(G) AND 48-2-112(A)(2)(J) OF THETENNESSEE SECURITIES ACT. IN ADDITION THE APPLICANT WASORDERED TO COMPLY WITH SECTIONS 48-2-112(A)(2)(G) AND 48-2-112(A)(2)(J) OF THE TENNESSEE SECURITIES ACT IN CONNECTION WITHTHE RESEARCH PRACTICES REFERENCED IN THE ORDER AND WITHCERTAIN UNDERTAKINGS TO ADOPT ENHANCED POLICIES ANDPROCEDURES REASONABLY DESIGNED TO ADDRESS POTENTIALCONFLICTS OF INTEREST ARISING FROM RESEARCH PRACTICES.APPLICANT AND ITS AFFILIATE UBS FINANCIAL SERVICES INC. MUST PAY ATOTAL OF $80,000,000 (OF WHICH $438,366 IS ALLOCATED TO THE STATEOF TENNESSEE) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE COMMISSIONER OF COMMERCE ANDINSURANCE OF THE STATE OF TENNESSEE CERTAIN CHARGES ARISINGFROM AN INVESTIGATION OF RESEARCH ANALYST CONFLICTS OFINTEREST. THIS SETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHERBROKERAGE FIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMSHAVE REACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC,NASD, AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. ("UBS FINANCIAL") HAVEAGREED TO PAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS -$25 MILLION – WILL BE PAID IN CONNECTION WITH RELATEDPROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CERTAIN CUSTOMERS. THEREMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. WITHOUT ADMITTING OR DENYING THE FINDINGSOF FACT AND CONCLUSIONS OF LAW CONTAINED IN THE CONSENTORDER, THE APPLICANT CONSENTED TO THE ENTRY OF AN ORDERPROVIDING THAT APPLICANT WILL CEASE AND DESIST FROM VIOLATINGTHE SECTIONS 48-2-112(A)(2)(G) AND 48-2-112(A)(2)(J) OF THE TENNESSEESECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDERED TOCOMPLY WITH THE SECTIONS 48-2-112(A)(2)(G) AND 48-2-112(A)(2)(J) OFTHE TENNESSEE SECURITIES ACT IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF $80,000,000 (OF WHICH$438,366 IS ALLOCATED TO THE STATE OF TENNESSEE) INCLUDING$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


Consent






APPLICANT HAS SETTLED WITH THE COMMISSIONER OF COMMERCE ANDINSURANCE OF THE STATE OF TENNESSEE CERTAIN CHARGES ARISINGFROM AN INVESTIGATION OF RESEARCH ANALYST CONFLICTS OFINTEREST. THIS SETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHERBROKERAGE FIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMSHAVE REACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC,NASD, AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. ("UBS FINANCIAL") HAVEAGREED TO PAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS -$25 MILLION – WILL BE PAID IN CONNECTION WITH RELATEDPROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CERTAIN CUSTOMERS. THEREMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. WITHOUT ADMITTING OR DENYING THE FINDINGSOF FACT AND CONCLUSIONS OF LAW CONTAINED IN THE CONSENTORDER, THE APPLICANT CONSENTED TO THE ENTRY OF AN ORDERPROVIDING THAT APPLICANT WILL CEASE AND DESIST FROM VIOLATINGTHE SECTIONS 48-2-112(A)(2)(G) AND 48-2-112(A)(2)(J) OF THE TENNESSEESECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDERED TOCOMPLY WITH THE SECTIONS 48-2-112(A)(2)(G) AND 48-2-112(A)(2)(J) OFTHE TENNESSEE SECURITIES ACT IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF $80,000,000 (OF WHICH$438,366 IS ALLOCATED TO THE STATE OF TENNESSEE) INCLUDING$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


i


Initiated By: STATE OF COLORADO SECURITIES COMMISSIONER


Docket/Case Number: ORDER NO. 04-L-11

Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 11-51-410(1)(G) OF THECOLORADO SECURITIES ACT IN ISSUING RESEARCH REPORTS.APPLICANT FAILED TO ESTABLISH AND MAINTAIN ADEQUATESUPERVISORY PROCEDURES FOR RESEARCH AS REQUIRED UNDERSECTION 11-51-*-410(1)(I).










DISGOREGEMENT, PROHIBITION AND UNDERTAKING




Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT IS PROHIBITED FROM FUTUREVIOLATIONS OF THE COLORADO SECURITIES ACT. IN ADDITION THEAPPLICANT WAS ORDERED TO COMPLY WITH THE COLORADOSECURITIES ACT IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. MUST PAY A TOTAL OF $80,000,000 (OF WHICH $331,417 ISALLOCATED TO THE STATE OF COLORADO) INCLUDING $25,000,000 AS APENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHERMONIES, $25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE COLORADO SECURITIESCOMMISSIONER CERTAIN CHARGES ARISING FROM AN INVESTIGATION OFRESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT IS PROHIBITEDFROM FUTURE VIOLATIONS OF THE COLORADO SECURITIES ACT. INADDITION THE APPLICANT WAS ORDERED TO COMPLY WITH THECOLORADO SECURITIES ACT IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF $80,000,000 (OF WHICH$331,417 IS ALLOCATED TO THE STATE OF COLORADO) INCLUDING$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


Consent






APPLICANT HAS SETTLED WITH THE COLORADO SECURITIESCOMMISSIONER CERTAIN CHARGES ARISING FROM AN INVESTIGATION OFRESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT IS PROHIBITEDFROM FUTURE VIOLATIONS OF THE COLORADO SECURITIES ACT. INADDITION THE APPLICANT WAS ORDERED TO COMPLY WITH THECOLORADO SECURITIES ACT IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF $80,000,000 (OF WHICH$331,417 IS ALLOCATED TO THE STATE OF COLORADO) INCLUDING$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


i


Initiated By: WISCONSIN DEPARTMENT OF FINANCIAL INSTITUTIONS, DIVISION OFSECURITIES






Docket/Case Number: NO. S-03108(EX)



Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 551.34(1)(G) OF THEWISCONSIN UNIFORM SECURITIES LAW IN ISSUING RESEARCH REPORTS.THE APPLICANT ALSO FAILED TO ESTABLISH AND MAINTAIN ADEQUATESUPERVISORY PROCEDURES FOR RESEARCH AS REQUIRED BY SECTION551.34(1)(J) OF THE WISCONSIN UNIFORM SECURITIES LAW.



Resolution:


Consent







Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE WISCONSIN SECURITIES LAW. IN ADDITION THEAPPLICANT WAS ORDERED TO COMPLY WITH THE WISCONSINSECURITIES LAW IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. MUST PAY A TOTAL OF $80,000,000 (OF WHICH $413,277 ISALLOCATED TO THE STATE OF WISCONSIN) INCLUDING $25,000,000 AS APENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHERMONIES, $25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE WISCONSIN DEPARTMENT OFFINANCIAL INSTITUTIONS, DIVISION OF SECURITIES CERTAIN CHARGESARISING FROM AN INVESTIGATION OF RESEARCH ANALYST CONFLICTS OFINTEREST. THIS SETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHERBROKERAGE FIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMSHAVE REACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC,NASD, AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. ("UBS FINANCIAL") HAVEAGREED TO PAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS -$25 MILLION – WILL BE PAID IN CONNECTION WITH RELATEDPROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CERTAIN CUSTOMERS. THEREMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. WITHOUT ADMITTING OR DENYING THE FINDINGSOF FACT AND CONCLUSIONS OF LAW CONTAINED IN THE CONSENTORDER, THE APPLICANT CONSENTED TO THE ENTRY OF AN ORDERPROVIDING THAT APPLICANT WILL CEASE AND DESIST FROM VIOLATINGTHE WISCONSIN SECURITIES LAW. IN ADDITION THE APPLICANT WASORDERED TO COMPLY WITH THE WISCONSIN SECURITIES LAW INCONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIAL MUST PAY ATOTAL OF $80,000,000 (OF WHICH $413,277 IS ALLOCATED TO THE STATEOF WISCONSIN) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.







APPLICANT HAS SETTLED WITH THE WISCONSIN DEPARTMENT OFFINANCIAL INSTITUTIONS, DIVISION OF SECURITIES CERTAIN CHARGESARISING FROM AN INVESTIGATION OF RESEARCH ANALYST CONFLICTS OFINTEREST. THIS SETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHERBROKERAGE FIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMSHAVE REACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC,NASD, AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. ("UBS FINANCIAL") HAVEAGREED TO PAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS -$25 MILLION – WILL BE PAID IN CONNECTION WITH RELATEDPROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CERTAIN CUSTOMERS. THEREMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. WITHOUT ADMITTING OR DENYING THE FINDINGSOF FACT AND CONCLUSIONS OF LAW CONTAINED IN THE CONSENTORDER, THE APPLICANT CONSENTED TO THE ENTRY OF AN ORDERPROVIDING THAT APPLICANT WILL CEASE AND DESIST FROM VIOLATINGTHE WISCONSIN SECURITIES LAW. IN ADDITION THE APPLICANT WASORDERED TO COMPLY WITH THE WISCONSIN SECURITIES LAW INCONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIAL MUST PAY ATOTAL OF $80,000,000 (OF WHICH $413,277 IS ALLOCATED TO THE STATEOF WISCONSIN) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


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Docket/Case Number:



Allegations: APPLICANT ACTED IN VIOLATION SECTION 204(A)(2)(G) OF THEMASSACHUSETTS UNIFORM SECURITIES ACT IN ISSUING RESEARCHREPORTS. THE APPLICANT ALSO FAILED TO ESTABLISH AND MAINTAINADEQUATE SUPERVISORY PROCEDURES FOR RESEARCH AS REQUIREDBY SECTION 204(A)(2)(J) OF THE MASSACHUSETTS UNIFORM SECURITIESACT.



Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING CHAPTER 110A, SECTIONS 204(A)(2)(G) AND (J) OF THEMASSACHUSETTS GENERAL LAW. IN ADDITION THE APPLICANT WASORDERED TO COMPLY WITH THE CHAPTER 110A, SECTIONS 204(A)(2)(G)AND (J) OF THE MASSACHUSETTS GENERAL LAW IN CONNECTION WITHTHE RESEARCH PRACTICES REFERENCED IN THE ORDER AND WITHCERTAIN UNDERTAKINGS TO ADOPT ENHANCED POLICIES ANDPROCEDURES REASONABLY DESIGNED TO ADDRESS POTENTIALCONFLICTS OF INTEREST ARISING FROM RESEARCH PRACTICES.APPLICANT AND ITS AFFILIATE UBS FINANCIAL SERVICES INC. [UBSSECURITIES LLC] MUST PAY A TOTAL OF $80,000,000 (OF WHICH $489,205 ISALLOCATED TO THE COMMONWEALTH OF MASSACHUSETTS) INCLUDING$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


Consent






ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING CHAPTER 110A, SECTIONS 204(A)(2)(G) AND (J) OF THEMASSACHUSETTS GENERAL LAW. IN ADDITION THE APPLICANT WASORDERED TO COMPLY WITH THE CHAPTER 110A, SECTIONS 204(A)(2)(G)AND (J) OF THE MASSACHUSETTS GENERAL LAW IN CONNECTION WITHTHE RESEARCH PRACTICES REFERENCED IN THE ORDER AND WITHCERTAIN UNDERTAKINGS TO ADOPT ENHANCED POLICIES ANDPROCEDURES REASONABLY DESIGNED TO ADDRESS POTENTIALCONFLICTS OF INTEREST ARISING FROM RESEARCH PRACTICES.APPLICANT AND ITS AFFILIATE UBS FINANCIAL SERVICES INC. [UBSSECURITIES LLC] MUST PAY A TOTAL OF $80,000,000 (OF WHICH $489,205 ISALLOCATED TO THE COMMONWEALTH OF MASSACHUSETTS) INCLUDING$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE MASSACHUSETTS SECURITIESDIVISION CERTAIN CHARGES ARISING FROM AN INVESTIGATION OFRESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL")[UBS SECURITIES LLC] HAVE AGREED TOPAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25 MILLION INPENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION– WILL BE PAID IN CONNECTION WITH RELATED PROCEEDINGS BY THESEC, NASD AND NYSE AND WILL BE PLACED INTO A DISTRIBUTION FUNDFOR THE BENEFIT OF CERTAIN CUSTOMERS. THE REMAINDER WILL BEPAID TO RESOLVE RELATED PROCEEDINGS BY STATE REGULATORS.WITHOUT ADMITTING OR DENYING THE FINDINGS OF FACT ANDCONCLUSIONS OF LAW CONTAINED IN THE CONSENT ORDER, THEAPPLICANT CONSENTED TO THE ENTRY OF AN ORDER PROVIDING THATAPPLICANT WILL CEASE AND DESIST FROM VIOLATING THE CHAPTER110A, SECTIONS 204(A)(2)(G) AND (J) OF THE MASSACHUSETTS GENERALLAW. IN ADDITION THE APPLICANT WAS ORDERED TO COMPLY WITH THECHAPTER 110A, SECTIONS 204(A)(2)(G) AND (J) OF THE MASSACHUSETTSGENERAL LAW IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIAL[UBS SECURITIES LLC] MUST PAY A TOTAL OF $80,000,000 (OF WHICH$489,205 IS ALLOCATED TO THE COMMONWEALTH OF MASSACHUSETTS)INCLUDING $25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


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Allegations: UBS WARBURG, LLC/UBS PAINEWEBBER, INC.'S ACTIVITIES INCONNECTION WITH CERTAIN CONFLICTS OF INTEREST THAT RESEARCHANALYSTS WERE SUBJECT TO DURING THE PERIOD OF JULY 1, 1999,THROUGH JUNE 30, 2001.







Initiated By: KANSAS SECURITIES COMMISSIONER


Cease and Desist


WITH FINE


Docket/Case Number: 2003E051/KSC 2003-4744



Other Product Type(s): GENERAL SECURITIES - BD

Allegations: UBS WARBURG, LLC/UBS PAINEWEBBER, INC.'S ACTIVITIES INCONNECTION WITH CERTAIN CONFLICTS OF INTEREST THAT RESEARCHANALYSTS WERE SUBJECT TO DURING THE PERIOD OF JULY 1, 1999,THROUGH JUNE 30, 2001.


Resolution:


Sanction Details: UBS WARBURG, LLC/UBS PAINEWEBBER, INC., WILL CEASE AND DESISTFROM VIOLATING KSA 17-1254(M)(7) & (12) IN CONNECTION WITH THERESEARCH PRACTICES REFERENCED IN THE ORDER, WILL COMPLY WITHKSA 17-1254 (M) (7)&(12) IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER, AND WILL COMPLY WITH THEUNDERTAKINGS.


Yes


Consent


Allegations: APPLICANT ACTED IN VIOLATION OF SECTION17-1254(M)(7) OF THEKANSAS SECURITIES ACT IN ISSUING RESEARCH REPORTS. THEAPPLICANT ALSO FAILED TO ESTABLISH AND MAINTAIN ADEQUATESUPERVISORY PROCEDURES OF RESEARCH AS REQUIRED BY SECTION17-1254(M)(12) OF THE KANSAS SECURITIES ACT.







Initiated By: KANSAS SECURITIES COMMISSIONER




UNDERTAKING, DISGORGEMENT, CEASE AND DESIST.


Docket/Case Number: NO. 2003E051



APPLICANT ACTED IN VIOLATION OF SECTION17-1254(M)(7) OF THEKANSAS SECURITIES ACT IN ISSUING RESEARCH REPORTS. THEAPPLICANT ALSO FAILED TO ESTABLISH AND MAINTAIN ADEQUATESUPERVISORY PROCEDURES OF RESEARCH AS REQUIRED BY SECTION17-1254(M)(12) OF THE KANSAS SECURITIES ACT.


Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTIONS 17-1254(M)(7) AND (12) OF THE KANSAS SECURITIESACT. IN ADDITION THE APPLICANT WAS ORDERED TO COMPLY WITHSECTIONS 17-1254(M)(7) AND (12) OF THE KANSAS SECURITIES ACT INCONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIAL SERVICES INC.MUST PAY A TOTAL OF $80,000,000 (OF WHICH $250,000 IS ALLOCATED TOTHE STATE OF KANSAS) INCLUDING $25,000,000 AS A PENALTY; $25,000,000AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000TO BE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE KANSAS SECURITIES COMMISSIONERCERTAIN CHARGES ARISING FROM AN INVESTIGATION OF RESEARCHANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING SECTIONS 17-1254(M)(7) AND (12) OF THEKANSAS SECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDEREDTO COMPLY WITH SECTIONS 17-1254(M)(7) AND (12) OF THE KANSASSECURITIES ACT IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALMUST PAY A TOTAL OF $80,000,000 (OF WHICH $250,000 IS ALLOCATED TOTHE STATE OF KANSAS) INCLUDING $25,000,000 AS A PENALTY; $25,000,000AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000TO BE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


Consent






APPLICANT HAS SETTLED WITH THE KANSAS SECURITIES COMMISSIONERCERTAIN CHARGES ARISING FROM AN INVESTIGATION OF RESEARCHANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING SECTIONS 17-1254(M)(7) AND (12) OF THEKANSAS SECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDEREDTO COMPLY WITH SECTIONS 17-1254(M)(7) AND (12) OF THE KANSASSECURITIES ACT IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALMUST PAY A TOTAL OF $80,000,000 (OF WHICH $250,000 IS ALLOCATED TOTHE STATE OF KANSAS) INCLUDING $25,000,000 AS A PENALTY; $25,000,000AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000TO BE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


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Initiated By: INDIANA OFFICE OF THE SECRETARY OF STATE, SECURITIES DIVISION




Docket/Case Number: NO-03-0069 CO



Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 23-2-1-11(A)(6) OF THEINDIANA SECURITIES ACT AND OF THE 710 INDIANA ADMINISTRATIVECODE 1-17-1(W) IN ISSUING RESEARCH REPORTS. THE APPLICANT ALSOFAILED TO ESTABLISH AND MAINTAIN ADEQUATE SUPERVISORYPROCEDURES FOR RESEARCH AS REQUIRED UNDER SECTION 23-2-1-11(A)(4) OF THE INDIANA SECURITIES ACT AND OF THE 710 INDIANAADMINISTRATIVE CODE 1-17-1(V).












Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE INDIANA SECURITIES ACT. IN ADDITION THE APPLICANTWAS ORDERED TO COMPLY WITH THE INDIANA SECURITIES ACT INCONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIAL SERVICES INC.MUST PAY A TOTAL OF $80,000,000 (OF WHICH $468,508 IS ALLOCATED TOTHE STATE OF INDIANA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000TO BE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE INDIANA SECURITIES COMMISSIONERCERTAIN CHARGES ARISING FROM AN INVESTIGATION OF RESEARCHANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING THE INDIANA SECURITIES ACT. IN ADDITION THEAPPLICANT WAS ORDERED TO COMPLY WITH THE INDIANA SECURITIESACT IN CONNECTION WITH THE RESEARCH PRACTICES REFERENCED INTHE ORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIAL MUST PAY ATOTAL OF $80,000,000 (OF WHICH $468,508 IS ALLOCATED TO THE STATEOF INDIANA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


Consent






APPLICANT HAS SETTLED WITH THE INDIANA SECURITIES COMMISSIONERCERTAIN CHARGES ARISING FROM AN INVESTIGATION OF RESEARCHANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING THE INDIANA SECURITIES ACT. IN ADDITION THEAPPLICANT WAS ORDERED TO COMPLY WITH THE INDIANA SECURITIESACT IN CONNECTION WITH THE RESEARCH PRACTICES REFERENCED INTHE ORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIAL MUST PAY ATOTAL OF $80,000,000 (OF WHICH $468,508 IS ALLOCATED TO THE STATEOF INDIANA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


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Initiated By: ALASKA DIVISION OF BANKING, SECURITIES AND CORPORATIONS




UNDERTAKING, DISGORGEMENT, CEASE AND DESIST.


Docket/Case Number: NO. 04-07S



Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 45.55.060(A)(7) OF THEALASKA SECURITIES ACT IN ISSUING RESEARCH REPORTS. APPLICANTALSO FAILED TO ESTABLISH AND MAINTAIN ADEQUATE SUPERVISORYPROCEDURES FOR RESEARCH AS REQUIRED BY SECTION 45.55.060(B)(1)OF THE ALASKA SECURITIES ACT.



Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTIONS 45.55.060(A)(7) AND 45.55.060(B)(1) OF THE ALASKASECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDERED TOCOMPLY WITH THE SECTIONS 45.55.060(A)(7) AND 45.55.060(B)(1) OF THEALASKA SECURITIES ACT IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. MUST PAY A TOTAL OF$80,000,000 (OF WHICH $250,000 IS ALLOCATED TO THE STATE OF ALASKA)INCLUDING $25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


Consent






ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTIONS 45.55.060(A)(7) AND 45.55.060(B)(1) OF THE ALASKASECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDERED TOCOMPLY WITH THE SECTIONS 45.55.060(A)(7) AND 45.55.060(B)(1) OF THEALASKA SECURITIES ACT IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. MUST PAY A TOTAL OF$80,000,000 (OF WHICH $250,000 IS ALLOCATED TO THE STATE OF ALASKA)INCLUDING $25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE ALASKA DIVISION OF BANKING,SECURITIES AND CORPORATIONS CERTAIN CHARGES ARISING FROM ANINVESTIGATION OF RESEARCH ANALYST CONFLICTS OF INTEREST. THISSETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHER BROKERAGEFIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMS HAVEREACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC, NASD,AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. ("UBS FINANCIAL") HAVEAGREED TO PAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS -$25 MILLION – WILL BE PAID IN CONNECTION WITH RELATEDPROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CERTAIN CUSTOMERS. THEREMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. WITHOUT ADMITTING OR DENYING THE FINDINGSOF FACT AND CONCLUSIONS OF LAW CONTAINED IN THE CONSENTORDER, THE APPLICANT CONSENTED TO THE ENTRY OF AN ORDERPROVIDING THAT APPLICANT WILL CEASE AND DESIST FROM VIOLATINGTHE SECTIONS 45.55.060(A)(7) AND 45.55.060(B)(1) OF THE ALASKASECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDERED TOCOMPLY WITH THE SECTIONS 45.55.060(A)(7) AND 45.55.060(B)(1) OF THEALASKA SECURITIES ACT IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF $80,000,000 (OF WHICH$250,000 IS ALLOCATED TO THE STATE OF ALASKA) INCLUDING $25,000,000AS A PENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS ANDOTHER MONIES, $25,000,000 TO BE USED FOR PROCUREMENT OFINDEPENDENT RESEARCH AND $5,000,000 TO BE USED FOR INVESTOREDUCATION.







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Initiated By: WASHINGTON STATE SECURITIES DIVISION






Docket/Case Number: DOC NO. S-03-087-03-CO01/ CASE NO. S-087



Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 21.20.110(1)(G) OF THESECURITIES ACT OF WASHINGTON IN ISSUING RESEARCH REPORTS.APPLICANT ALSO FAILED TO ESTABLISH AND MAINTAIN ADEQUATESUPERVISORY PROCEDURES FOR RESEARCH AS REQUIRED BY SECTION21.20.110(1)(J) OF THE SECURITIES ACT OF WASHINGTON.



Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE SECURITIES ACT OF WASHINGTON. IN ADDITION THEAPPLICANT WAS ORDERED TO COMPLY WITH THE SECURITIES ACT OFWASHINGTON IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. MUST PAY A TOTAL OF $80,000,000 (OF WHICH $454,149 ISALLOCATED TO THE STATE OF WASHINGTON) INCLUDING $25,000,000 AS APENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHERMONIES, $25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.


Consent






ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE SECURITIES ACT OF WASHINGTON. IN ADDITION THEAPPLICANT WAS ORDERED TO COMPLY WITH THE SECURITIES ACT OFWASHINGTON IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. MUST PAY A TOTAL OF $80,000,000 (OF WHICH $454,149 ISALLOCATED TO THE STATE OF WASHINGTON) INCLUDING $25,000,000 AS APENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHERMONIES, $25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE WASHINGTON STATE SECURITIESDIVISION CERTAIN CHARGES ARISING FROM AN INVESTIGATION OFRESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING THE SECURITIES ACT OF WASHINGTON. INADDITION THE APPLICANT WAS ORDERED TO COMPLY WITH THESECURITIES ACT OF WASHINGTON IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL PAY A TOTAL OF $80,000,000 (OF WHICH $454,149IS ALLOCATED TO THE STATE OF WASHINGTON) INCLUDING $25,000,000 ASA PENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS ANDOTHER MONIES, $25,000,000 TO BE USED FOR PROCUREMENT OFINDEPENDENT RESEARCH AND $5,000,000 TO BE USED FOR INVESTOREDUCATION.


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Initiated By: NEW JERSEY BUREAU OF SECURITIES


Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 4221A(A)(8) OF THEVERMONT SECURITIES ACT IN ISSUING RESEARCH REPORTS. APPLICANTALSO FAILED TO ESTABLISH AND MAINTAIN ADEQUATE SUPERVISORYPROCEDURES FOR RESEARCH AS REQUIRED BY SECTION 4221A(A)(11) OFTHE VERMONT SECURITIES ACT.












Docket/Case Number:




Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTIONS 4221A(A)(8) AND 4221A(A)(11) OF THE VERMONTSECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDERED TOCOMPLY WITH SECTIONS 4221A(A)(8) AND 4221A(A)(11) OF THE VERMONTSECURITIES ACT IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. MUST PAY A TOTAL OF $80,000,000 (OF WHICH $250,000 ISALLOCATED TO THE STATE OF VERMONT) INCLUDING $25,000,000 AS APENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHERMONIES, $25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE VERMONT DEPARTMENT OFBANKING, INSURANCE, SECURITIES AND HEALTH CARE CERTAINCHARGES ARISING FROM AN INVESTIGATION OF RESEARCH ANALYSTCONFLICTS OF INTEREST. THIS SETTLEMENT, AND SETTLEMENTS WITHCERTAIN OTHER BROKERAGE FIRMS, ARE PART OF A GLOBALSETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUS STATEREGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING SECTIONS 4221A(A)(8) AND 4221A(A)(11) OF THEVERMONT SECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDEREDTO COMPLY WITH SECTIONS 4221A(A)(8) AND 4221A(A)(11) OF THEVERMONT SECURITIES ACT IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF $80,000,000 (OF WHICH$250,000 IS ALLOCATED TO THE STATE OF VERMONT) INCLUDING$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


Consent






APPLICANT HAS SETTLED WITH THE VERMONT DEPARTMENT OFBANKING, INSURANCE, SECURITIES AND HEALTH CARE CERTAINCHARGES ARISING FROM AN INVESTIGATION OF RESEARCH ANALYSTCONFLICTS OF INTEREST. THIS SETTLEMENT, AND SETTLEMENTS WITHCERTAIN OTHER BROKERAGE FIRMS, ARE PART OF A GLOBALSETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUS STATEREGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING SECTIONS 4221A(A)(8) AND 4221A(A)(11) OF THEVERMONT SECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDEREDTO COMPLY WITH SECTIONS 4221A(A)(8) AND 4221A(A)(11) OF THEVERMONT SECURITIES ACT IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF $80,000,000 (OF WHICH$250,000 IS ALLOCATED TO THE STATE OF VERMONT) INCLUDING$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


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Initiated By: STATE OF RHODE ISLAND DEPARTMENT OF BUSINESS






Docket/Case Number:



Allegations: APPLICANT ACTED IN VIOLATION OF SECTION7-11-212(B)(8) OF THE RHODEISLAND UNIFORM SECURITIES ACT IN ISSUING RESEARCH REPORTS.APPLICANT ALSO FAILED TO ESTABLISH AND MAINTAIN ADEQUATESUPERVISORY PROCEDURES FOR RESEARCH AS REQUIRED BY SECTION7-11-212(B)(11) OF THE RHODE ISLAND UNIFORM SECURITIES ACT.










Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE RHODE ISLAND UNIFORM SECURITIES ACT OF 1990SECTION 7-11-101 ET SEQ. OF THE RHODE ISLAND GENERAL LAWS, 1989,AS AMENDED. IN ADDITION THE APPLICANT WAS ORDERED TO COMPLYWITH THE RHODE ISLAND UNIFORM SECURITIES ACT OF 1990 SECTION 7-11-101 ET SEQ. OF THE RHODE ISLAND GENERAL LAWS, 1989, ASAMENDED IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. MUST PAY A TOTAL OF $80,000,000 (OF WHICH $250,000 ISALLOCATED TO THE STATE OF RHODE ISLAND) INCLUDING $25,000,000 ASA PENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS ANDOTHER MONIES, $25,000,000 TO BE USED FOR PROCUREMENT OFINDEPENDENT RESEARCH AND $5,000,000 TO BE USED FOR INVESTOREDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE RHODE ISLAND DEPARTMENT OFBUSINESS REGULATION CERTAIN CHARGES ARISING FROM ANINVESTIGATION OF RESEARCH ANALYST CONFLICTS OF INTEREST. THISSETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHER BROKERAGEFIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMS HAVEREACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC, NASD,AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. ("UBS FINANCIAL") HAVEAGREED TO PAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS -$25 MILLION – WILL BE PAID IN CONNECTION WITH RELATEDPROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CERTAIN CUSTOMERS. THEREMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. WITHOUT ADMITTING OR DENYING THE FINDINGSOF FACT AND CONCLUSIONS OF LAW CONTAINED IN THE CONSENTORDER, THE APPLICANT CONSENTED TO THE ENTRY OF AN ORDERPROVIDING THAT APPLICANT WILL CEASE AND DESIST FROM VIOLATINGTHE RHODE ISLAND UNIFORM SECURITIES ACT OF 1990 SECTION 7-11-101ET SEQ. OF THE RHODE ISLAND GENERAL LAWS, 1989, AS AMENDED. INADDITION THE APPLICANT WAS ORDERED TO COMPLY WITH THE RHODEISLAND UNIFORM SECURITIES ACT OF 1990 SECTION 7-11-101 ET SEQ. OFTHE RHODE ISLAND GENERAL LAWS, 1989, AS AMENDED IN CONNECTIONWITH THE RESEARCH PRACTICES REFERENCED IN THE ORDER AND WITHCERTAIN UNDERTAKINGS TO ADOPT ENHANCED POLICIES ANDPROCEDURES REASONABLY DESIGNED TO ADDRESS POTENTIALCONFLICTS OF INTEREST ARISING FROM RESEARCH PRACTICES.APPLICANT AND ITS AFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF$80,000,000 (OF WHICH $250,000 IS ALLOCATED TO THE STATE OF RHODEISLAND) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


Consent






APPLICANT HAS SETTLED WITH THE RHODE ISLAND DEPARTMENT OFBUSINESS REGULATION CERTAIN CHARGES ARISING FROM ANINVESTIGATION OF RESEARCH ANALYST CONFLICTS OF INTEREST. THISSETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHER BROKERAGEFIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMS HAVEREACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC, NASD,AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. ("UBS FINANCIAL") HAVEAGREED TO PAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS -$25 MILLION – WILL BE PAID IN CONNECTION WITH RELATEDPROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CERTAIN CUSTOMERS. THEREMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. WITHOUT ADMITTING OR DENYING THE FINDINGSOF FACT AND CONCLUSIONS OF LAW CONTAINED IN THE CONSENTORDER, THE APPLICANT CONSENTED TO THE ENTRY OF AN ORDERPROVIDING THAT APPLICANT WILL CEASE AND DESIST FROM VIOLATINGTHE RHODE ISLAND UNIFORM SECURITIES ACT OF 1990 SECTION 7-11-101ET SEQ. OF THE RHODE ISLAND GENERAL LAWS, 1989, AS AMENDED. INADDITION THE APPLICANT WAS ORDERED TO COMPLY WITH THE RHODEISLAND UNIFORM SECURITIES ACT OF 1990 SECTION 7-11-101 ET SEQ. OFTHE RHODE ISLAND GENERAL LAWS, 1989, AS AMENDED IN CONNECTIONWITH THE RESEARCH PRACTICES REFERENCED IN THE ORDER AND WITHCERTAIN UNDERTAKINGS TO ADOPT ENHANCED POLICIES ANDPROCEDURES REASONABLY DESIGNED TO ADDRESS POTENTIALCONFLICTS OF INTEREST ARISING FROM RESEARCH PRACTICES.APPLICANT AND ITS AFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF$80,000,000 (OF WHICH $250,000 IS ALLOCATED TO THE STATE OF RHODEISLAND) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


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Initiated By: MISSISSIPPI SECRETARY OF STATE, BUSINESS REGULATION ANDENFORCEMENT DIVISION






Docket/Case Number: NO. 02=11-06-S



Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 75-71-321(A)(F) OF THEMISSISSIPPI SECURITIES ACT IN CONNECTION WITH ISSUING RESEARCHREPORTS. APPLICANT ALSO FAILED TO ESTABLISH AND MAINTAINADEQUATE SUPERVISORY PROCEDURES FOR RESEARCH AS REQUIREDUNDER SECTION 75-71-321(B)(A) OF THE MISSISSIPPI SECURITIES ACT



Resolution:


Consent







Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE MISSISSIPPI SECURITIES ACT. IN ADDITION THEAPPLICANT WAS ORDERED TO COMPLY WITH THE MISSISSIPPISECURITIES ACT IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. MUST PAY A TOTAL OF $80,000,000 (OF WHICH $250,000 ISALLOCATED TO THE STATE OF MISSISSIPPI) INCLUDING $25,000,000 AS APENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHERMONIES, $25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE SECRETARY OF STATE OFMISSISSIPPI CERTAIN CHARGES ARISING FROM AN INVESTIGATION OFRESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING THE MISSISSIPPI SECURITIES ACT. IN ADDITIONTHE APPLICANT WAS ORDERED TO COMPLY WITH THE MISSISSIPPISECURITIES ACT IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALMUST PAY A TOTAL OF $80,000,000 (OF WHICH $250,000 IS ALLOCATED TOTHE STATE OF MISSISSIPPI) INCLUDING $25,000,000 AS A PENALTY;$25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES,$25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.







APPLICANT HAS SETTLED WITH THE SECRETARY OF STATE OFMISSISSIPPI CERTAIN CHARGES ARISING FROM AN INVESTIGATION OFRESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING THE MISSISSIPPI SECURITIES ACT. IN ADDITIONTHE APPLICANT WAS ORDERED TO COMPLY WITH THE MISSISSIPPISECURITIES ACT IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALMUST PAY A TOTAL OF $80,000,000 (OF WHICH $250,000 IS ALLOCATED TOTHE STATE OF MISSISSIPPI) INCLUDING $25,000,000 AS A PENALTY;$25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES,$25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.


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Initiated By: MICHIGAN


Injunction



Docket/Case Number: 03-036-M




Allegations: CONFLICTS OF INTEREST EXISTED BETWEEN THE RESEARCH ANALYSTSAND THE INVESTMENT BANKING DIVISION OF THE FIRM. THE SEC FILEDAN ACTION AGAINST THE FIRM WHICH WAS SETTLED. MICHIGAN'S ACTIONWAS TAKEN AS A RESULT OF THAT ACTION BY THE SEC AS PERMITTEDUNDER THE MICHIGAN UNIFORM SECURITIES ACT. NASD AND NYSERULES WERE ALSO VIOLATED. THE FIRM PUBLISHED UNWARRANTED OREXAGGERATED RESEARCH. THE FIRM FAILED TO MAINTAIN APPROPRIATESUPERVISION OVER ITS RESEARCH AND INVESTMENT BANKINGOPERATIONS.



Resolution:


Sanction Details: COMPLY WITH THE JUDGEMENT ENTERED AGAINST THE FIRM IN THE SUITBROUGHT BY THE SEC INCLUDING FINES.


Yes

Sanctions Ordered: Cease and Desist/Injunction

Order






Sanction Details: COMPLY WITH THE JUDGEMENT ENTERED AGAINST THE FIRM IN THE SUITBROUGHT BY THE SEC INCLUDING FINES.


Initiated By: STATE OF MICHIGAN OFFICE OF FINANCIAL AND INSURANCE SERVICES






Docket/Case Number:



Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 451.604(A)(1)(G) OF THEMICHIGAN UNIFORM SECURITIES ACT IN ISSUING RESEARCH REPORTS.APPLICANT ALSO FAILED TO ESTABLISH AND MAINTAIN ADEQUATESUPERVISORY PROCEDURES FOR RESEARCH AS REQUIRED BY SECTION451.604(A)(2) OF THE MICHIGAN UNIFORM SECURITIES ACT.



Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTIONS 451604(A)(1)(G) AND 451.604(A)(2) OF THE MICHIGANUNIFORM SECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDEREDTO COMPLY WITH SECTIONS 451604(A)(1)(G) AND 451.604(A)(2) OF THEMICHIGAN UNIFORM SECURITIES ACT IN CONNECTION WITH THERESEARCH PRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. MUST PAY A TOTAL OF$80,000,000 (OF WHICH $765,768 IS ALLOCATED TO THE STATE OFMICHIGAN) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


Consent






ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTIONS 451604(A)(1)(G) AND 451.604(A)(2) OF THE MICHIGANUNIFORM SECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDEREDTO COMPLY WITH SECTIONS 451604(A)(1)(G) AND 451.604(A)(2) OF THEMICHIGAN UNIFORM SECURITIES ACT IN CONNECTION WITH THERESEARCH PRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. MUST PAY A TOTAL OF$80,000,000 (OF WHICH $765,768 IS ALLOCATED TO THE STATE OFMICHIGAN) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE COMMISSIONER OF THE MICHIGANOFFICE OF FINANCIAL AND INSURANCE SERVICES CERTAIN CHARGESARISING FROM AN INVESTIGATION OF RESEARCH ANALYST CONFLICTS OFINTEREST. THIS SETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHERBROKERAGE FIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMSHAVE REACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC,NASD, AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. ("UBS FINANCIAL") HAVEAGREED TO PAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS -$25 MILLION – WILL BE PAID IN CONNECTION WITH RELATEDPROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CERTAIN CUSTOMERS. THEREMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. WITHOUT ADMITTING OR DENYING THE FINDINGSOF FACT AND CONCLUSIONS OF LAW CONTAINED IN THE CONSENTORDER, THE APPLICANT CONSENTED TO THE ENTRY OF AN ORDERPROVIDING THAT APPLICANT WILL CEASE AND DESIST FROM VIOLATINGSECTIONS 451604(A)(1)(G) AND 451.604(A)(2) OF THE MICHIGAN UNIFORMSECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDERED TOCOMPLY WITH SECTIONS 451604(A)(1)(G) AND 451.604(A)(2) OF THEMICHIGAN UNIFORM SECURITIES ACT IN CONNECTION WITH THERESEARCH PRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF $80,000,000 (OF WHICH$765,768 IS ALLOCATED TO THE STATE OF MICHIGAN) INCLUDING$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


i


Allegations: THE RESPONDENT SETTLED ALLEGATIONS THAT UNDUE INFLUENCE BYTHE INVESTMENT BANKING DIVISION ON SECURITIES RESEARCH AT THEFIRM RESULTED IN TAINTED RESEARCH.







Initiated By: GEORGIA SECRETARY OF STATE - SECURITIES DIVISION.


Cease and Desist


THE RESPONDENT SHALL PAY $500,000.00 IN CIVIL PENALTIES TO GA,$50,000.00 IN INVESTIGATIVE COSTS TO GA, AND $80,775.00 TO THEINVESTOR PROTECTION TRUST FOR THE PROMOTION OF INVESTORPROTECTION AND EDUCATION FOR THE BENEFIT OF GA INVESTORS ANDCITIZENS.


Docket/Case Number: EN-19520



Other Product Type(s): SEE #7.

Allegations: THE RESPONDENT SETTLED ALLEGATIONS THAT UNDUE INFLUENCE BYTHE INVESTMENT BANKING DIVISION ON SECURITIES RESEARCH AT THEFIRM RESULTED IN TAINTED RESEARCH.


Resolution:

Other Sanctions Ordered: SEE #2.

Sanction Details: FIRM AGREED TO PAY MONETARY PENALTIES, DISGORGEMENT, AND FUNDINDEPENDENT RESEARCH AND INVESTOR EDUCATION. FIRM ALSOAGREED TO REFORM PRACTICES TO MINIMIZE THE POSSIBILITY OFFUTURE CONFLICTS OF INTEREST.


Yes


Consent


Allegations: APPLICANT ACTED IN VIOLATION OF SECTIONS 10-5-4(A)(8) AND 10-5-12(A)(1) OF THE GEORGIA SECURITIES ACT OF 1973 ANDRULE 590-4-2-.14(1) PROMULGATED THEREUNDER IN ISSUING RESEARCHREPORTS. APPLICANT ALSO FAILED TO ESTABLISH AND MAINTAINADEQUATE SUPERVISORY PROCEDURES AS REQUIRED BY SECTIONS 10-5-4(A)(11) AND 10-5-12(A)(1) OF THE GEORGIA SECURITIES ACT OF 1973AND RULE 590-4-.08(1) PROMULGATED THEREUNDER.







Initiated By: GEORGIA SECRETARY OF STATE COMMISSIONER OF SECURITIES






Docket/Case Number: CASE NO. EN19520



APPLICANT ACTED IN VIOLATION OF SECTIONS 10-5-4(A)(8) AND 10-5-12(A)(1) OF THE GEORGIA SECURITIES ACT OF 1973 ANDRULE 590-4-2-.14(1) PROMULGATED THEREUNDER IN ISSUING RESEARCHREPORTS. APPLICANT ALSO FAILED TO ESTABLISH AND MAINTAINADEQUATE SUPERVISORY PROCEDURES AS REQUIRED BY SECTIONS 10-5-4(A)(11) AND 10-5-12(A)(1) OF THE GEORGIA SECURITIES ACT OF 1973AND RULE 590-4-.08(1) PROMULGATED THEREUNDER.


Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTIONS 10-5-4(A)(8) AND (11) AND 10-5-12(A)(1) OF THEGEORGIA SECURITIES ACT OF 1973 AND RULES 590-4-2-.08(1) AND 590-4-2-.14(1) PROMULGATED THEREUNDER. IN ADDITION THE APPLICANT WASORDERED TO COMPLY WITH THE GEORGIA SECURITIES ACT OF 1973 ANDTHE RULES PROMULGATED THEREUNDER IN CONNECTION WITH THERESEARCH PRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. MUST PAY A TOTAL OF$80,000,000 (OF WHICH $630,775 IS ALLOCATED TO THE STATE OFGEORGIA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE COMMISSIONER OF SECURITIES OFTHE STATE OF GEORGIA CERTAIN CHARGES ARISING FROM ANINVESTIGATION OF RESEARCH ANALYST CONFLICTS OF INTEREST. THISSETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHER BROKERAGEFIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMS HAVEREACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC, NASD,AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. ("UBS FINANCIAL") HAVEAGREED TO PAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS -$25 MILLION – WILL BE PAID IN CONNECTION WITH RELATEDPROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CERTAIN CUSTOMERS. THEREMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. WITHOUT ADMITTING OR DENYING THE FINDINGSOF FACT AND CONCLUSIONS OF LAW CONTAINED IN THE CONSENTORDER, THE APPLICANT CONSENTED TO THE ENTRY OF AN ORDERPROVIDING THAT APPLICANT WILL CEASE AND DESIST FROM VIOLATINGTHE GEORGIA SECURITIES ACT OF 1973 AND THE RULES PROMULGATEDTHEREUNDER. IN ADDITION THE APPLICANT WAS ORDERED TO COMPLYWITH THE GEORGIA SECURITIES ACT OF 1973 AND THE RULESPROMULGATED THEREUNDER IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF $80,000,000 (OF WHICH$630,775 IS ALLOCATED TO THE STATE OF GEORGIA) INCLUDING$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


Consent






APPLICANT HAS SETTLED WITH THE COMMISSIONER OF SECURITIES OFTHE STATE OF GEORGIA CERTAIN CHARGES ARISING FROM ANINVESTIGATION OF RESEARCH ANALYST CONFLICTS OF INTEREST. THISSETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHER BROKERAGEFIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMS HAVEREACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC, NASD,AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. ("UBS FINANCIAL") HAVEAGREED TO PAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS -$25 MILLION – WILL BE PAID IN CONNECTION WITH RELATEDPROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CERTAIN CUSTOMERS. THEREMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. WITHOUT ADMITTING OR DENYING THE FINDINGSOF FACT AND CONCLUSIONS OF LAW CONTAINED IN THE CONSENTORDER, THE APPLICANT CONSENTED TO THE ENTRY OF AN ORDERPROVIDING THAT APPLICANT WILL CEASE AND DESIST FROM VIOLATINGTHE GEORGIA SECURITIES ACT OF 1973 AND THE RULES PROMULGATEDTHEREUNDER. IN ADDITION THE APPLICANT WAS ORDERED TO COMPLYWITH THE GEORGIA SECURITIES ACT OF 1973 AND THE RULESPROMULGATED THEREUNDER IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF $80,000,000 (OF WHICH$630,775 IS ALLOCATED TO THE STATE OF GEORGIA) INCLUDING$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


i


Allegations: THE OFFICE FINDS THE FIRM VIOLATED SECTION 517.161(1)(A), FLORIDASTATUTES, AND RULE 3E-600.013(1)(P) BY ENGAGING IN THE ACTS ANDPRACTICES THAT CREATED OR MAINTAINED INAPPROPRIATE INFLUENCEBY THE INVESTMENT BANKING DEPARTMENT OVER RESEARCH ANALYSTSAND FAILING TO MANAGE THESE CONFLICTS IN AN ADEQUATE ORAPPROPRIATE MANNER. FAILING TO ESTABLISH AND MAINTAINSUPERVISORY PROCEDURES TO DETECT AND PREVENT THE INVESTMENTBANKING INFLUENCES. ISSUING REPORTS THAT WERE AFFECTED BYCONFLICTS OF INTEREST THAT WERE IMPOSED ON ITS RESEARCHANALYSTS. MAKING PAYMENTS FOR RESERACH TO OTHER BROKERDEALERS NOT INVOLVED IN UNDERWRITING TRANSACTIONS. RECEIVINGPAYMENTS IN CONJUCTION WITH UNDERWRITING TRANSACTIONS FROMOUTSIDE ENTITIES FOR RESEARCH ISSUED WITHOUT DISCLOSINGRECEIPT OF THOSE PAYMENTS TO THE PUUBLIC.







Initiated By: FLORIDA


Cease and Desist






Other Product Type(s): RESEARCH.

THE OFFICE FINDS THE FIRM VIOLATED SECTION 517.161(1)(A), FLORIDASTATUTES, AND RULE 3E-600.013(1)(P) BY ENGAGING IN THE ACTS ANDPRACTICES THAT CREATED OR MAINTAINED INAPPROPRIATE INFLUENCEBY THE INVESTMENT BANKING DEPARTMENT OVER RESEARCH ANALYSTSAND FAILING TO MANAGE THESE CONFLICTS IN AN ADEQUATE ORAPPROPRIATE MANNER. FAILING TO ESTABLISH AND MAINTAINSUPERVISORY PROCEDURES TO DETECT AND PREVENT THE INVESTMENTBANKING INFLUENCES. ISSUING REPORTS THAT WERE AFFECTED BYCONFLICTS OF INTEREST THAT WERE IMPOSED ON ITS RESEARCHANALYSTS. MAKING PAYMENTS FOR RESERACH TO OTHER BROKERDEALERS NOT INVOLVED IN UNDERWRITING TRANSACTIONS. RECEIVINGPAYMENTS IN CONJUCTION WITH UNDERWRITING TRANSACTIONS FROMOUTSIDE ENTITIES FOR RESEARCH ISSUED WITHOUT DISCLOSINGRECEIPT OF THOSE PAYMENTS TO THE PUUBLIC.


Resolution:


Sanction Details: NA

Regulator Statement THE OFFICE FINDS THE FIRM VIOLATED SECTION 517.161(1)(A), FLORIDASTATUTES, AND RULE 3E-600.013(1)(P) BY ENGAGING IN THE ACTS ANDPRACTICES THAT CREATED OR MAINTAINED INAPPROPRIATE INFLUENCEBY THE INVESTMENT BANKING DEPARTMENT OVER RESEARCH ANALYSTSAND FAILING TO MANAGE THESE CONFLICTS IN AN ADEQUATE ORAPPROPRIATE MANNER. FAILING TO ESTABLISH AND MAINTAINSUPERVISORY PROCEDURES TO DETECT AND PREVENT THE INVESTMENTBANKING INFLUENCES. ISSUING REPORTS THAT WERE AFFECTED BYCONFLICTS OF INTEREST THAT WERE IMPOSED ON ITS RESEARCHANALYSTS. MAKING PAYMENTS FOR RESERACH TO OTHER BROKERDEALERS NOT INVOLVED IN UNDERWRITING TRANSACTIONS. RECEIVINGPAYMENTS IN CONJUCTION WITH UNDERWRITING TRANSACTIONS FROMOUTSIDE ENTITIES FOR RESEARCH ISSUED WITHOUT DISCLOSINGRECEIPT OF THOSE PAYMENTS TO THE PUUBLIC.


No


Order






THE OFFICE FINDS THE FIRM VIOLATED SECTION 517.161(1)(A), FLORIDASTATUTES, AND RULE 3E-600.013(1)(P) BY ENGAGING IN THE ACTS ANDPRACTICES THAT CREATED OR MAINTAINED INAPPROPRIATE INFLUENCEBY THE INVESTMENT BANKING DEPARTMENT OVER RESEARCH ANALYSTSAND FAILING TO MANAGE THESE CONFLICTS IN AN ADEQUATE ORAPPROPRIATE MANNER. FAILING TO ESTABLISH AND MAINTAINSUPERVISORY PROCEDURES TO DETECT AND PREVENT THE INVESTMENTBANKING INFLUENCES. ISSUING REPORTS THAT WERE AFFECTED BYCONFLICTS OF INTEREST THAT WERE IMPOSED ON ITS RESEARCHANALYSTS. MAKING PAYMENTS FOR RESERACH TO OTHER BROKERDEALERS NOT INVOLVED IN UNDERWRITING TRANSACTIONS. RECEIVINGPAYMENTS IN CONJUCTION WITH UNDERWRITING TRANSACTIONS FROMOUTSIDE ENTITIES FOR RESEARCH ISSUED WITHOUT DISCLOSINGRECEIPT OF THOSE PAYMENTS TO THE PUUBLIC.


Initiated By: FLORIDA OFFICE OF FINANCIAL REGISTRATION






Docket/Case Number: ORDER NO. 0044-S-6/03



Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 517.161(1)(A) OF THESECURITIES AND INVESTOR PROTECTION ACT AND RULE 3E-600.013(1)(P)IN ISSUING RESEARCH REPORTS.



Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTION 517.161(1)(A) OF THE FLORIDA SECURITIES ANDINVESTOR PROTECTION ACT AND RULE 3E-600.013(1)(P) PROMULGATEDTHEREUNDER. IN ADDITION THE APPLICANT WAS ORDERED TO COMPLYWITH THE SECTION 517.161(1)(A) OF THE FLORIDA SECURITIES ANDINVESTOR PROTECTION ACT AND RULE 3E-600.013(1)(P) PROMULGATEDTHEREUNDER IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. MUST PAY A TOTAL OF $80,000,000 (OF WHICH $1,231,461 ISALLOCATED TO THE STATE OF FLORIDA) INCLUDING $25,000,000 AS APENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHERMONIES, $25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.


Consent






ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTION 517.161(1)(A) OF THE FLORIDA SECURITIES ANDINVESTOR PROTECTION ACT AND RULE 3E-600.013(1)(P) PROMULGATEDTHEREUNDER. IN ADDITION THE APPLICANT WAS ORDERED TO COMPLYWITH THE SECTION 517.161(1)(A) OF THE FLORIDA SECURITIES ANDINVESTOR PROTECTION ACT AND RULE 3E-600.013(1)(P) PROMULGATEDTHEREUNDER IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. MUST PAY A TOTAL OF $80,000,000 (OF WHICH $1,231,461 ISALLOCATED TO THE STATE OF FLORIDA) INCLUDING $25,000,000 AS APENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHERMONIES, $25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE STATE OF FLORIDA OFFICE OFFINANCIAL REGULATION CERTAIN CHARGES ARISING FROM ANINVESTIGATION OF RESEARCH ANALYST CONFLICTS OF INTEREST. THISSETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHER BROKERAGEFIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMS HAVEREACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC, NASD,AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. ("UBS FINANCIAL") HAVEAGREED TO PAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS -$25 MILLION – WILL BE PAID IN CONNECTION WITH RELATEDPROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CERTAIN CUSTOMERS. THEREMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. WITHOUT ADMITTING OR DENYING THE FINDINGSOF FACT AND CONCLUSIONS OF LAW CONTAINED IN THE CONSENTORDER, THE APPLICANT CONSENTED TO THE ENTRY OF AN ORDERPROVIDING THAT APPLICANT WILL CEASE AND DESIST FROM VIOLATINGTHE SECTION 517.161(1)(A) OF THE FLORIDA SECURITIES AND INVESTORPROTECTION ACT AND RULE 3E-600.013(1)(P) PROMULGATEDTHEREUNDER. IN ADDITION THE APPLICANT WAS ORDERED TO COMPLYWITH THE SECTION 517.161(1)(A) OF THE FLORIDA SECURITIES ANDINVESTOR PROTECTION ACT AND RULE 3E-600.013(1)(P) PROMULGATEDTHEREUNDER IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALMUST PAY A TOTAL OF $80,000,000 (OF WHICH $1,231,461 IS ALLOCATED TOTHE STATE OF FLORIDA) INCLUDING $25,000,000 AS A PENALTY;$25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES,$25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.


i


Allegations: RESPONDENT ENGAGED IN UNETHICAL AND DISHONEST PRACTICES INCONNECTION WITH THE OFFER OR SALE OF SECURITIES. RESPONDENTALSO FAILED REASONABLY TO SUPERVISE THEIR EMPLOYEES. ALLALLEGATIONS RELATED TO PRACTICES OF THE RESEARCH ANDINVESTMENT BANKING SECTIONS OF THE RESPNODENT'S FIRM.







Initiated By: OREGON DIVISION OF FINANCE AND CORPORATE SECURITIES




CEASE AND DESIST





Other Product Type(s): STOCK

Allegations: RESPONDENT ENGAGED IN UNETHICAL AND DISHONEST PRACTICES INCONNECTION WITH THE OFFER OR SALE OF SECURITIES. RESPONDENTALSO FAILED REASONABLY TO SUPERVISE THEIR EMPLOYEES. ALLALLEGATIONS RELATED TO PRACTICES OF THE RESEARCH ANDINVESTMENT BANKING SECTIONS OF THE RESPNODENT'S FIRM.


Resolution:


Sanction Details: NO PORTION OF PENALTY SUSPENDED

Regulator Statement RESEARCH ANALYSTS AT THE FIRM WERE SUBJECTED TO PRESSURESFROM THE INVESTMENT BANKING SECTION OF THE FIRM TO RATESTOCKS FAVORABLY SO AS TO GAIN THE INVESTMENT BANKINGBUSINESS OF THE FIRMS ISSUING THE STOCKS.


Yes


Consent


Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 59.205(2) OF THE OREGONSECURITIES LAW IN ISSUING RESEARCH REPORTS. APPLICANT ALSOFAILED TO ESTABLISH AND MAINTAIN ADEQUATE SUPERVISORYPROCEDURES FOR RESEARCH AS REQUIRED BY SECTION 59.205(13) OFTHE OREGON SECURITIES LAW.







Initiated By: OREGON DEPARTMENT OF CONSUMER AND BUSINESS SERVICES






Docket/Case Number: DOCKET NO. S-03-0032



Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 59.205(2) OF THE OREGONSECURITIES LAW IN ISSUING RESEARCH REPORTS. APPLICANT ALSOFAILED TO ESTABLISH AND MAINTAIN ADEQUATE SUPERVISORYPROCEDURES FOR RESEARCH AS REQUIRED BY SECTION 59.205(13) OFTHE OREGON SECURITIES LAW.


Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING OREGON SECURITIES LAW. IN ADDITION THE APPLICANT WASORDERED TO COMPLY WITH OREGON SECURITIES LAW IN CONNECTIONWITH THE RESEARCH PRACTICES REFERENCED IN THE ORDER AND WITHCERTAIN UNDERTAKINGS TO ADOPT ENHANCED POLICIES ANDPROCEDURES REASONABLY DESIGNED TO ADDRESS POTENTIALCONFLICTS OF INTEREST ARISING FROM RESEARCH PRACTICES.APPLICANT AND ITS AFFILIATE UBS FINANCIAL SERVICES INC. MUST PAY ATOTAL OF $80,000,000 (OF WHICH $263,622 IS ALLOCATED TO THE STATEOF OREGON) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE OREGON DEPARTMENT OFCONSUMER AND BUSINESS SERVICES CERTAIN CHARGES ARISING FROMAN INVESTIGATION OF RESEARCH ANALYST CONFLICTS OF INTEREST.THIS SETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHERBROKERAGE FIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMSHAVE REACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC,NASD, AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. ("UBS FINANCIAL") HAVEAGREED TO PAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS -$25 MILLION – WILL BE PAID IN CONNECTION WITH RELATEDPROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CERTAIN CUSTOMERS. THEREMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. WITHOUT ADMITTING OR DENYING THE FINDINGSOF FACT AND CONCLUSIONS OF LAW CONTAINED IN THE CONSENTORDER, THE APPLICANT CONSENTED TO THE ENTRY OF AN ORDERPROVIDING THAT APPLICANT WILL CEASE AND DESIST FROM VIOLATINGOREGON SECURITIES LAW. IN ADDITION THE APPLICANT WAS ORDEREDTO COMPLY WITH OREGON SECURITIES LAW IN CONNECTION WITH THERESEARCH PRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF $80,000,000 (OF WHICH$263,622 IS ALLOCATED TO THE STATE OF OREGON) INCLUDING$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


Consent






APPLICANT HAS SETTLED WITH THE OREGON DEPARTMENT OFCONSUMER AND BUSINESS SERVICES CERTAIN CHARGES ARISING FROMAN INVESTIGATION OF RESEARCH ANALYST CONFLICTS OF INTEREST.THIS SETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHERBROKERAGE FIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMSHAVE REACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC,NASD, AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. ("UBS FINANCIAL") HAVEAGREED TO PAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS -$25 MILLION – WILL BE PAID IN CONNECTION WITH RELATEDPROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CERTAIN CUSTOMERS. THEREMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. WITHOUT ADMITTING OR DENYING THE FINDINGSOF FACT AND CONCLUSIONS OF LAW CONTAINED IN THE CONSENTORDER, THE APPLICANT CONSENTED TO THE ENTRY OF AN ORDERPROVIDING THAT APPLICANT WILL CEASE AND DESIST FROM VIOLATINGOREGON SECURITIES LAW. IN ADDITION THE APPLICANT WAS ORDEREDTO COMPLY WITH OREGON SECURITIES LAW IN CONNECTION WITH THERESEARCH PRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF $80,000,000 (OF WHICH$263,622 IS ALLOCATED TO THE STATE OF OREGON) INCLUDING$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


i


Initiated By: WYOMING SECRETARY OF STATE AND TH WYOMING ATTORNEY GENERAL




Docket/Case Number: DOCKET NO. 02-14



Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 17-4-106(A)(II)(G) OF THEWYOMING SECURITIES ACT IN ISSUING RESEARCH REPORTS. APPLICANTALSO FAILED TO ESTABLISH AND MAINTAIN ADEQUATE SUPERVISORYPROCEDURES FOR RESEARCH AS REQUIRED UNDER SECTION 17-4-106(B)(II)(A) OF THE WYOMING SECURITIES ACT.








CEASE AND DISIST, DISGOREMENT AND UNDERTAKING


Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTIONS 17-4-106(A)(II)(G) AND 17-4-106(B)(II)(A) OF THEWYOMING SECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDEREDTO COMPLY WITH SECTIONS 17-4-106(A)(II)(G) AND 17-4-106(B)(II)(A) OFTHE WYOMING SECURITIES ACT IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. MUST PAY A TOTAL OF$80,000,000 (OF WHICH $250,000 IS ALLOCATED TO STATE OF WYOMINGGENERAL FUND) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE WYOMING SECRETARY OF STATE ANDTHE WYOMING ATTORNEY GENERAL CERTAIN CHARGES ARISING FROMAN INVESTIGATION OF RESEARCH ANALYST CONFLICTS OF INTEREST.THIS SETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHERBROKERAGE FIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMSHAVE REACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC,NASD, AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. ("UBS FINANCIAL") HAVEAGREED TO PAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS -$25 MILLION – WILL BE PAID IN CONNECTION WITH RELATEDPROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CERTAIN CUSTOMERS. THEREMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. WITHOUT ADMITTING OR DENYING THE FINDINGSOF FACT AND CONCLUSIONS OF LAW CONTAINED IN THE CONSENTORDER, THE APPLICANT CONSENTED TO THE ENTRY OF AN ORDERPROVIDING THAT APPLICANT WILL CEASE AND DESIST FROM VIOLATINGSECTIONS 17-4-106(A)(II)(G) AND 17-4-106(B)(II)(A) OF THE WYOMINGSECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDERED TOCOMPLY WITH SECTIONS 17-4-106(A)(II)(G) AND 17-4-106(B)(II)(A) OF THEWYOMING SECURITIES ACT IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF $80,000,000 (OF WHICH$250,000 IS ALLOCATED TO STATE OF WYOMING GENERAL FUND)INCLUDING $25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


Consent






APPLICANT HAS SETTLED WITH THE WYOMING SECRETARY OF STATE ANDTHE WYOMING ATTORNEY GENERAL CERTAIN CHARGES ARISING FROMAN INVESTIGATION OF RESEARCH ANALYST CONFLICTS OF INTEREST.THIS SETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHERBROKERAGE FIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMSHAVE REACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC,NASD, AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. ("UBS FINANCIAL") HAVEAGREED TO PAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS -$25 MILLION – WILL BE PAID IN CONNECTION WITH RELATEDPROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CERTAIN CUSTOMERS. THEREMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. WITHOUT ADMITTING OR DENYING THE FINDINGSOF FACT AND CONCLUSIONS OF LAW CONTAINED IN THE CONSENTORDER, THE APPLICANT CONSENTED TO THE ENTRY OF AN ORDERPROVIDING THAT APPLICANT WILL CEASE AND DESIST FROM VIOLATINGSECTIONS 17-4-106(A)(II)(G) AND 17-4-106(B)(II)(A) OF THE WYOMINGSECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDERED TOCOMPLY WITH SECTIONS 17-4-106(A)(II)(G) AND 17-4-106(B)(II)(A) OF THEWYOMING SECURITIES ACT IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF $80,000,000 (OF WHICH$250,000 IS ALLOCATED TO STATE OF WYOMING GENERAL FUND)INCLUDING $25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


i


Initiated By: UTAH DIVISION OF SECURITIES


Cease and Desist


CIVIL MONETARY PENALTY






Allegations: RESEARCH ANALYSTS CONFLICTS OF INTEREST



Resolution:


Sanction Details: ORDERED TO CEASE AND DESIST AND PAY $250,000.00 TO THE DIVISION'SSECURITIES INVESTOR EDUCATION AND TRAINING FUND


Consent






Regulator Statement FOR MORE INFORMATION, PLEASE VISIT THE DIVISION'S WEB SITE AT:HTTP://WWW.SECURITIES.STATE.UT.US/ACTIONSEVENTS.ASP?DOCKET+NUMBER=SD%2D03%2D0042


Initiated By: STATE OF UTAH DIVISION OF SECURITIES









Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 61-1-6(1)(G) OF THE UTAHUNIFORM SECURITIES ACT IN ISSUING RESEARCH REPORTS. APPLICANTALSO FAILED TO ESTABLISH AND MAINTAIN ADEQUATE SUPERVISORYPROCEDURES FOR RESEARCH AS REQUIRED BY SECTION 61-1-6(1)(J) OFTHE UTAH UNIFORM SECURITIES ACT.



Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE UTAH UNIFORM SECURITIES ACT. IN ADDITION THEAPPLICANT WAS ORDERED TO COMPLY WITH THE UTAH UNIFORMSECURITIES ACT IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. MUST PAY A TOTAL OF $80,000,000 (OF WHICH $250,000 ISALLOCATED TO THE STATE OF UTAH DIVISION OF SECURITIES) INCLUDING$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


Consent






ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE UTAH UNIFORM SECURITIES ACT. IN ADDITION THEAPPLICANT WAS ORDERED TO COMPLY WITH THE UTAH UNIFORMSECURITIES ACT IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. MUST PAY A TOTAL OF $80,000,000 (OF WHICH $250,000 ISALLOCATED TO THE STATE OF UTAH DIVISION OF SECURITIES) INCLUDING$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE STATE OF UTAH DIVISION OFSECURITIES CERTAIN CHARGES ARISING FROM AN INVESTIGATION OFRESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING UTAH UNIFORM SECURITIES ACT. IN ADDITIONTHE APPLICANT WAS ORDERED TO COMPLY WITH THE UTAH UNIFORMSECURITIES ACT IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIALMUST PAY A TOTAL OF $80,000,000 (OF WHICH $250,000 IS ALLOCATED TOTHE STATE OF UTAH DIVISION OF SECURITIES) INCLUDING $25,000,000 ASA PENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS ANDOTHER MONIES, $25,000,000 TO BE USED FOR PROCUREMENT OFINDEPENDENT RESEARCH AND $5,000,000 TO BE USED FOR INVESTOREDUCATION.


i


Initiated By: HAWAII COMMISSIONER OF SECURITIES

Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 485-15(7) OF THE HAWAIIUNIFORM SECURITIES ACT IN ISSUING RESEARCH REPORTS. APPLICANTALSO FAILED TO ESTABLISH AND MAINTAIN ADEQUATE SUPERVISORYPROCEDURES FOR RESEARCH AS REQUIRED UNDER SECTION 485-15(10).







Initiated By: HAWAII COMMISSIONER OF SECURITIES






Docket/Case Number: SEU2002-049




Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTIONS 485-15(7) AND 485-15(10) OF THE HAWAII UNIFORMSECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDERED TOCOMPLY WITH THE HAWAII UNIFORM SECURITIES ACT IN CONNECTIONWITH THE RESEARCH PRACTICES REFERENCED IN THE ORDER AND WITHCERTAIN UNDERTAKINGS TO ADOPT ENHANCED POLICIES ANDPROCEDURES REASONABLY DESIGNED TO ADDRESS POTENTIALCONFLICTS OF INTEREST ARISING FROM RESEARCH PRACTICES.APPLICANT AND ITS AFFILIATE UBS FINANCIAL SERVICES INC. MUST PAY ATOTAL OF $80,000,000 (OF WHICH $250,000 IS ALLOCATED TO THE STATEOF HAWAII) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE STATE OF HAWAII DEPARTMENT OFCOMMERCE AND CONSUMER AFFAIRS CERTAIN CHARGES ARISING FROMAN INVESTIGATION OF RESEARCH ANALYST CONFLICTS OF INTEREST.THIS SETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHERBROKERAGE FIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMSHAVE REACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC,NASD, AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. ("UBS FINANCIAL") HAVEAGREED TO PAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS -$25 MILLION – WILL BE PAID IN CONNECTION WITH RELATEDPROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CERTAIN CUSTOMERS. THEREMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. WITHOUT ADMITTING OR DENYING THE FINDINGSOF FACT AND CONCLUSIONS OF LAW CONTAINED IN THE CONSENTORDER, THE APPLICANT CONSENTED TO THE ENTRY OF AN ORDERPROVIDING THAT APPLICANT WILL CEASE AND DESIST FROM VIOLATINGSECTIONS 485-15(7) AND 485-15(10) OF THE HAWAII UNIFORM SECURITIESACT. IN ADDITION THE APPLICANT WAS ORDERED TO COMPLY WITH THEHAWAII UNIFORM SECURITIES ACT IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF $80,000,000 (OF WHICH$250,000 IS ALLOCATED TO THE STATE OF HAWAII) INCLUDING $25,000,000AS A PENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS ANDOTHER MONIES, $25,000,000 TO BE USED FOR PROCUREMENT OFINDEPENDENT RESEARCH AND $5,000,000 TO BE USED FOR INVESTOREDUCATION.


Consent






APPLICANT HAS SETTLED WITH THE STATE OF HAWAII DEPARTMENT OFCOMMERCE AND CONSUMER AFFAIRS CERTAIN CHARGES ARISING FROMAN INVESTIGATION OF RESEARCH ANALYST CONFLICTS OF INTEREST.THIS SETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHERBROKERAGE FIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMSHAVE REACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC,NASD, AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. ("UBS FINANCIAL") HAVEAGREED TO PAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS -$25 MILLION – WILL BE PAID IN CONNECTION WITH RELATEDPROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CERTAIN CUSTOMERS. THEREMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. WITHOUT ADMITTING OR DENYING THE FINDINGSOF FACT AND CONCLUSIONS OF LAW CONTAINED IN THE CONSENTORDER, THE APPLICANT CONSENTED TO THE ENTRY OF AN ORDERPROVIDING THAT APPLICANT WILL CEASE AND DESIST FROM VIOLATINGSECTIONS 485-15(7) AND 485-15(10) OF THE HAWAII UNIFORM SECURITIESACT. IN ADDITION THE APPLICANT WAS ORDERED TO COMPLY WITH THEHAWAII UNIFORM SECURITIES ACT IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL MUST PAY A TOTAL OF $80,000,000 (OF WHICH$250,000 IS ALLOCATED TO THE STATE OF HAWAII) INCLUDING $25,000,000AS A PENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS ANDOTHER MONIES, $25,000,000 TO BE USED FOR PROCUREMENT OFINDEPENDENT RESEARCH AND $5,000,000 TO BE USED FOR INVESTOREDUCATION.


i


Initiated By: SECURITIES COMMISSIONER OF THE STATE OF DELAWARE






Docket/Case Number: C.A. NO. 03-6-2



Allegations: APPLICANT VIOLATED SECTION 7316(A)(7) OF THE DELAWARE SECURITIESACT IN ISSUING RESEARCH REPORTS. APPLICANT ALSO FAILED TOESTABLISH AND MAINTAIN ADEQUATE SUPERVISORY PROCEDURES FORRESEARCH AS REQUIRED UNDER SECTION 7316(A)(10) OF THE DELAWARESECURITIES ACT.










Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE DELAWARE SECURITIES ACT. IN ADDITION THE APPLICANTWAS ORDERED TO COMPLY WITH THE DELAWARE SECURITIES ACT INCONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIAL SERVICES INC.MUST PAY A TOTAL OF $80,000,000 (OF WHICH $250,000 IS ALLOCATED TOTHE SECURITIES COMMISSIONER OF THE STATE OF DELAWARE)INCLUDING $25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE SECURITIES COMMISSIONER OF THESTATE OF DELAWARE CERTAIN CHARGES ARISING FROM ANINVESTIGATION OF RESEARCH ANALYST CONFLICTS OF INTEREST. THISSETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHER BROKERAGEFIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMS HAVEREACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC, NASD,AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. ("UBS FINANCIAL") HAVEAGREED TO PAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS -$25 MILLION – WILL BE PAID IN CONNECTION WITH RELATEDPROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CERTAIN CUSTOMERS. THEREMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. WITHOUT ADMITTING OR DENYING THE FINDINGSOF FACT AND CONCLUSIONS OF LAW CONTAINED IN THE CONSENTORDER, THE APPLICANT CONSENTED TO THE ENTRY OF AN ORDERPROVIDING THAT APPLICANT WILL CEASE AND DESIST FROM VIOLATINGTHE DELAWARE SECURITIES ACT. IN ADDITION THE APPLICANT WASORDERED TO COMPLY WITH THE DELAWARE SECURITIES ACT INCONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIAL MUST PAY ATOTAL OF $80,000,000 (OF WHICH $250,000 IS ALLOCATED TO THESECURITIES COMMISSIONER OF THE STATE OF DELAWARE) INCLUDING$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


Consent






APPLICANT HAS SETTLED WITH THE SECURITIES COMMISSIONER OF THESTATE OF DELAWARE CERTAIN CHARGES ARISING FROM ANINVESTIGATION OF RESEARCH ANALYST CONFLICTS OF INTEREST. THISSETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHER BROKERAGEFIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMS HAVEREACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC, NASD,AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. ("UBS FINANCIAL") HAVEAGREED TO PAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS -$25 MILLION – WILL BE PAID IN CONNECTION WITH RELATEDPROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CERTAIN CUSTOMERS. THEREMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. WITHOUT ADMITTING OR DENYING THE FINDINGSOF FACT AND CONCLUSIONS OF LAW CONTAINED IN THE CONSENTORDER, THE APPLICANT CONSENTED TO THE ENTRY OF AN ORDERPROVIDING THAT APPLICANT WILL CEASE AND DESIST FROM VIOLATINGTHE DELAWARE SECURITIES ACT. IN ADDITION THE APPLICANT WASORDERED TO COMPLY WITH THE DELAWARE SECURITIES ACT INCONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIAL MUST PAY ATOTAL OF $80,000,000 (OF WHICH $250,000 IS ALLOCATED TO THESECURITIES COMMISSIONER OF THE STATE OF DELAWARE) INCLUDING$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


i


Initiated By: TEXAS

Allegations: THE SECURITIES COMMISSIONER FINDS THAT UBS PAINEWEBBER INC.AND UBS WARBURG LLC (COLLECTIVELY REFERRED TO AS THEFIRM)VIOLATED SECTION 14.A(3) OF THE TEXAS SECURITIES ACTRELATING TO INEQUITABLE PRACTICES IN THE SALE OF SECURITIES ANDSECTION 115.10 OF THE RULES & REGULATIONS OF THE TEXAS STATESECURITIES BOARD BY 1) ENGAGING IN ACTS & PRACTICES THATCREATED OR MAINTAINED INAPPROPRIATE INFLUENCE BY THEINVESTMENT BANKING DEPT OVER RESEARCH ANALYSTS, THEREFOREIMPOSING CONFLICTS OF INTEREST ON ITS RESEARCH ANALYSTS ANDFAILING TO MANAGE THESE CONFLICTS IN AN ADEQUATE ORAPPROPRIATE MANNER, 2) ISSUING RESEARCH REPORTS THAT WEREAFFECTED BY THE CONFLICTS OF INTEREST IMPOSED ON ITS RESEARCHANALYSTS AS DESCRIBED ABOVE, 3) MAKING PAYMENTS FOR RESEARCHTO OTHER BROKER-DEALERS NOT INVOLVED IN UNDERWRITINGTRANSACTIONS WHEN THE FIRM KNEW THAT THESE PAYMENTS WEREMADE, AT LEAST IN PART, FOR RESEARCH COVERAGE, AND BY FAILING TODISCLOSE OR CAUSE TO BE DISCLOSED IN OFFERING DOCUMENTS ORELSEWHERE THE FACT OF SUCH PAYMENTS AND 4) RECEIVING PAYMENTSIN CONJUNCTION WITH UNDERWRITING TRANSACTIONS FROM OUTSIDEENTITIES FOR RESEARCH ISSUED W/O DISCLOSING RECEIPT OF THOSEPAYMENTS TO THE PUBLIC AS REQUIRED BY SECTION 17(B) OF THESECURITIES ACT OF 1933, AS AMENDED AND THE FIRM VIOLATED SECTION115.10 OF THE BOARD RULES BY FAILING SUPERVISION AND CONTROL OFRESEARCH & INVESTMENT BANKING DEPTS REASONABLY DESIGNED TODETECT AND PREVENT THE FOREGOING INVESTMENT BANKINGINFLUENCES & MANAGE THE CONFLICTS OF INTEREST TO ASSURECOMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONS.







Initiated By: TEXAS


Cease and Desist


CEASE & DESIST FROM VIOLATING THE TEXAS SECURITIES ACT,ADMINISTRATIVE FINE & UNDERTAKING


Docket/Case Number: SSB DKT NO 03-38;ORDER NO CDO/FIN-1535





Resolution:

Other Sanctions Ordered: CEASE & DESIST FROM VIOLATING THE TEXAS SECURITIES ACT,UNDERTAKING

Sanction Details: THE $1,606,657 ADMINISTRATIVE FINE WAS PAID CONTEMPORANEOUSLYWITH DELIVERY OF THE ORDER.


Order


Initiated By: TEXAS STATE SECURITIES BOARD






Docket/Case Number: CDO/FIN-1535



Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 14.A(3) OF THE TEXASSECURITIES ACT IN CONNECTION WITH ISSUING RESEARCH REPORTS.APPLICANT ALSO FAILED TO ESTABLISH AND MAINTAIN ADEQUATESUPERVISORY PROCEDURES FOR RESEARCH AS REQUIRED UNDERSECTION 115.10 OF THE RULES AND REGULATIONS OF THE TEXAS STATESECURITIES BOARD.










Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE TEXAS SECURITIES ACT. IN ADDITION THE APPLICANTWAS ORDERED TO COMPLY WITH THE TEXAS SECURITIES ACT INCONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIAL SERVICES INC.MUST PAY A TOTAL OF $80,000,000 (OF WHICH $1,606,657 IS ALLOCATED TOTHE STATE OF TEXAS) INCLUDING $25,000,000 AS A PENALTY; $25,000,000AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000TO BE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE TEXAS STATE SECURITIES BOARDCERTAIN CHARGES ARISING FROM AN INVESTIGATION OF RESEARCHANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING THE TEXAS SECURITIES ACT. IN ADDITION THEAPPLICANT WAS ORDERED TO COMPLY WITH THE TEXAS SECURITIES ACTIN CONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIAL MUST PAY ATOTAL OF $80,000,000 (OF WHICH $1,606,657 IS ALLOCATED TO THE STATEOF TEXAS) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


Consent






APPLICANT HAS SETTLED WITH THE TEXAS STATE SECURITIES BOARDCERTAIN CHARGES ARISING FROM AN INVESTIGATION OF RESEARCHANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING THE TEXAS SECURITIES ACT. IN ADDITION THEAPPLICANT WAS ORDERED TO COMPLY WITH THE TEXAS SECURITIES ACTIN CONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIAL MUST PAY ATOTAL OF $80,000,000 (OF WHICH $1,606,657 IS ALLOCATED TO THE STATEOF TEXAS) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


i


Initiated By: ATTORNEY GENERAL OF THE STATE OF NEW YORK BUREAU OFINVESTMENT PROTECTION


Other


CIVIL AND ADMINISTRATIVE PENALTY/FINE, DISGORGEMENT, CEASE ANDDESIST AND UNDERTAKING.


Docket/Case Number:



Allegations: APPLICANT ACTED IN VIOLATION OF THE MARTIN ACT (ARTICLE 23-A OFTHE GENERAL BUSINESS LAW) IN CONNECTION WITH ISSUING RESEARCHREPORTS.



Resolution:


Sanction Details: ASSURANCE OF DISCONTINUANCE PROVIDING THAT APPLICANT WILLCEASE AND DESIST FROM ENGAGING IN ACTS IN VIOLATION OF THEMARTIN ACT IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ASSURANCE OF DISCONTINUANCE AND WILLCOMPLY WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCED POLICIESAND PROCEDURES REASONABLY DESIGNED TO ADDRESS POTENTIALCONFLICTS OF INTEREST ARISING FROM RESEARCH PRACTICESINCLUDING THAT APPLICANT AND ITS AFFILIATE UBS FINANCIAL SERVICESINC. ("UBS FINANCIAL") WILL NOT MAKE ALLOCATIONS OF "HOT" IPOS TOAN ACCOUNT OF AN EXECUTIVE OFFICER OR DIRECTOR OF A PUBLICCOMPANY. APPLICANT AND UBS FINANCIAL MUST PAY A TOTAL OF$80,000,000 (OF WHICH $1,462,158 IS ALLOCATED TO NEW YORK STATE)INCLUDING $25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


Consent





www.finra.org/brokercheck User GuidanceASSURANCE OF DISCONTINUANCE PROVIDING THAT APPLICANT WILLCEASE AND DESIST FROM ENGAGING IN ACTS IN VIOLATION OF THEMARTIN ACT IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ASSURANCE OF DISCONTINUANCE AND WILLCOMPLY WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCED POLICIESAND PROCEDURES REASONABLY DESIGNED TO ADDRESS POTENTIALCONFLICTS OF INTEREST ARISING FROM RESEARCH PRACTICESINCLUDING THAT APPLICANT AND ITS AFFILIATE UBS FINANCIAL SERVICESINC. ("UBS FINANCIAL") WILL NOT MAKE ALLOCATIONS OF "HOT" IPOS TOAN ACCOUNT OF AN EXECUTIVE OFFICER OR DIRECTOR OF A PUBLICCOMPANY. APPLICANT AND UBS FINANCIAL MUST PAY A TOTAL OF$80,000,000 (OF WHICH $1,462,158 IS ALLOCATED TO NEW YORK STATE)INCLUDING $25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE ATTORNEY GENERAL OF THE STATEOF NEW YORK BUREAU OF INVESTMENT PROTECTION CERTAIN CHARGESARISING FROM AN INVESTIGATION OF RESEARCH ANALYST CONFLICTS OFINTEREST. THIS SETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHERBROKERAGE FIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMSHAVE REACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC,NASD, AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC ("UBS FINANCIAL") HAVE AGREEDTO PAY $25 MILLION AS DISGORGEMENT AND AN ADDITIONAL $25 MILLIONIN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25MILLION – WILL BE PAID IN CONNECTION WITH RELATED PROCEEDINGSBY THE SEC, NASD AND NYSE AND WILL BE PLACED INTO A DISTRIBUTIONFUND FOR THE BENEFIT OF CERTAIN CUSTOMERS. THE REMAINDER WILLBE PAID TO RESOLVE RELATED PROCEEDINGS BY STATE REGULATORS.WITHOUT ADMITTING OR DENYING THE FINDINGS OR LEGALCONCLUSIONS CONTAINED IN THE ASSURANCE OF DISCONTINUANCE,THE APPLICANT ENTERED INTO THE ASSURANCE OF DISCONTINUANCEPROVIDING THAT APPLICANT WILL CEASE AND DESIST FROM VIOLATINGTHE MARTIN ACT IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ASSURANCE OF DISCONTINUANCE AND WILLCOMPLY WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCED POLICIESAND PROCEDURES REASONABLY DESIGNED TO ADDRESS POTENTIALCONFLICTS OF INTEREST ARISING FROM RESEARCH PRACTICESINCLUDING THAT APPLICANT AND UBS FINANCIAL WILL NOT MAKEALLOCATIONS OF "HOT" IPOS TO ANY ACCOUNT OF ANY EXECUTIVEOFFICER OR DIRECTOR OF A PUBLIC COMPANY. APPLICANT AND UBSFINANCIAL MUST PAY A TOTAL OF $80,000,000 (OF WHICH $1,462,158 ISALLOCATED TO NEW YORK STATE) INCLUDING $25,000,000 AS A PENALTY;$25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES,$25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.


i







Initiated By: STATE OF MAINE DEPARTMENT OF PROFESSIONAL AND FINANCIALREGULATION


Other


CIVIL AND ADMINISTRATIVE PENALTY/FINE, DISGORGEMENT, CEASE ANDDESIST AND UNDERTAKING.


Docket/Case Number: DOCKET NO. 03-109



Allegations: APPLICANT ACTED IN VIOLATION OF THE REVISED MAINE SECURITIES ACT,32 M.R.S.A. SECTION 10313(1)(G) IN CONNECTION WITH ISSUINGRESEARCH REPORTS. APPLICANT ALSO FAILED TO ESTABLISH ANDMAINTAIN ADEQUATE SUPERVISORY PROCEDURES AS REQUIRED UNDER32 M.R.S.A. SECTION 10313(1)(J).



Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE SECTIONS 10313(1)(G) AND 10313(1)(J) OF THE REVISEDMAINE SECURITIES ACT, 32 M.R.S.A. SECTIONS 10101 – 10713. IN ADDITIONTHE APPLICANT WAS ORDERED TO COMPLY WITH THE SECTIONS10313(1)(G) AND 10313(1)(J) OF THE REVISED MAINE SECURITIES ACT, 32M.R.S.A. SECTIONS 10101 – 10713 IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS PAINEWEBBER INC. MUST PAY A TOTAL OF $80,000,000 (OFWHICH $250,000 IS ALLOCATED TO STATE OF MAINE OFFICE OFSECURITIES) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


Consent






ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE SECTIONS 10313(1)(G) AND 10313(1)(J) OF THE REVISEDMAINE SECURITIES ACT, 32 M.R.S.A. SECTIONS 10101 – 10713. IN ADDITIONTHE APPLICANT WAS ORDERED TO COMPLY WITH THE SECTIONS10313(1)(G) AND 10313(1)(J) OF THE REVISED MAINE SECURITIES ACT, 32M.R.S.A. SECTIONS 10101 – 10713 IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS PAINEWEBBER INC. MUST PAY A TOTAL OF $80,000,000 (OFWHICH $250,000 IS ALLOCATED TO STATE OF MAINE OFFICE OFSECURITIES) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE STATE OF MAINE DEPARTMENT OFPROFESSIONAL AND FINANCIAL REGULATION CERTAIN CHARGES ARISINGFROM AN INVESTIGATION OF RESEARCH ANALYST CONFLICTS OFINTEREST. THIS SETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHERBROKERAGE FIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMSHAVE REACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC,NASD, AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS PAINEWEBBER INC. HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING THE SECTIONS 10313(1)(G) AND 10313(1)(J) OFTHE REVISED MAINE SECURITIES ACT, 32 M.R.S.A. SECTIONS 10101 –10713. IN ADDITION THE APPLICANT WAS ORDERED TO COMPLY WITH THESECTIONS 10313(1)(G) AND 10313(1)(J) OF THE REVISED MAINESECURITIES ACT, 32 M.R.S.A. SECTIONS 10101 – 10713 IN CONNECTIONWITH THE RESEARCH PRACTICES REFERENCED IN THE ORDER AND WITHCERTAIN UNDERTAKINGS TO ADOPT ENHANCED POLICIES ANDPROCEDURES REASONABLY DESIGNED TO ADDRESS POTENTIALCONFLICTS OF INTEREST ARISING FROM RESEARCH PRACTICES.APPLICANT AND ITS AFFILIATE UBS PAINEWEBBER INC. MUST PAY A TOTALOF $80,000,000 (OF WHICH $250,000 IS ALLOCATED TO STATE OF MAINEOFFICE OF SECURITIES) INCLUDING $25,000,000 AS A PENALTY;$25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES,$25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.


i


Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 292.330(13)(A)7 OF THESECURITIES ACT OF KENTUCKY IN CONNECTION WITH ISSUINGRESEARCH REPORTS. APPLICANT ALSO FAILED TO ESTABLISH ANDMAINTAIN ADEQUATE SUPERVISORY PROCEDURES FOR RESEARCH ASREQUIRED UNDER SECTION 292.330(13)(A)9A OF THE SECURITIES ACT OFKENTUCKY.







Initiated By: KENTUCKY DEPARTMENT OF FINANCIAL INSTITUTIONS


Other


CIVIL ADMINISTRATIVE PENALTY/FINE, DISGORGEMENT, CEASE ANDDESIST AND UNDERTAKING.


Docket/Case Number:



APPLICANT ACTED IN VIOLATION OF SECTION 292.330(13)(A)7 OF THESECURITIES ACT OF KENTUCKY IN CONNECTION WITH ISSUINGRESEARCH REPORTS. APPLICANT ALSO FAILED TO ESTABLISH ANDMAINTAIN ADEQUATE SUPERVISORY PROCEDURES FOR RESEARCH ASREQUIRED UNDER SECTION 292.330(13)(A)9A OF THE SECURITIES ACT OFKENTUCKY.


Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTIONS 292.330(13)(A)7 AND 292.330(13)(A)9A OF THESECURITIES ACT OF KENTUCKY. IN ADDITION THE APPLICANT WASORDERED TO COMPLY WITH THE SECTIONS 292.330(13)(A)7 AND 292.330(13)(A)9A OF THE SECURITIES ACT OF KENTUCKY IN CONNECTIONWITH THE RESEARCH PRACTICES REFERENCED IN THE ORDER AND WITHCERTAIN UNDERTAKINGS TO ADOPT ENHANCED POLICIES ANDPROCEDURES REASONABLY DESIGNED TO ADDRESS POTENTIALCONFLICTS OF INTEREST ARISING FROM RESEARCH PRACTICES.APPLICANT AND ITS AFFILIATE UBS PAINEWEBBER INC. MUST PAY A TOTALOF $80,000,000 (OF WHICH $311,423 IS ALLOCATED TO THE KENTUCKYDEPARTMENT OF FINANCIAL INSTITUTIONS) INCLUDING $25,000,000 AS APENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHERMONIES, $25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE KENTUCKY DEPARTMENT OFFINANCIAL INSTITUTIONS CERTAIN CHARGES ARISING FROM ANINVESTIGATION OF RESEARCH ANALYST CONFLICTS OF INTEREST. THISSETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHER BROKERAGEFIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMS HAVEREACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC, NASD,AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS PAINEWEBBER INC. HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING THE SECTIONS 292.330(13)(A)7 AND 292.330(13)(A)9A OF THE SECURITIES ACT OF KENTUCKY. IN ADDITION THEAPPLICANT WAS ORDERED TO COMPLY WITH THE SECTIONS 292.330(13)(A)7 AND 292.330(13)(A)9A OF THE SECURITIES ACT OF KENTUCKYIN CONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS PAINEWEBBER INC. MUSTPAY A TOTAL OF $80,000,000 (OF WHICH $311,423 IS ALLOCATED TOKENTUCKY DEPARTMENT OF FINANCIAL INSTITUTIONS) INCLUDING$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


Consent






APPLICANT HAS SETTLED WITH THE KENTUCKY DEPARTMENT OFFINANCIAL INSTITUTIONS CERTAIN CHARGES ARISING FROM ANINVESTIGATION OF RESEARCH ANALYST CONFLICTS OF INTEREST. THISSETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHER BROKERAGEFIRMS, ARE PART OF A GLOBAL SETTLEMENT CERTAIN FIRMS HAVEREACHED WITH THE VARIOUS STATE REGULATORS AND THE SEC, NASD,AND NYSE. AS PART OF THE SETTLEMENT, THE APPLICANT AND ITSAFFILIATE UBS PAINEWEBBER INC. HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING THE SECTIONS 292.330(13)(A)7 AND 292.330(13)(A)9A OF THE SECURITIES ACT OF KENTUCKY. IN ADDITION THEAPPLICANT WAS ORDERED TO COMPLY WITH THE SECTIONS 292.330(13)(A)7 AND 292.330(13)(A)9A OF THE SECURITIES ACT OF KENTUCKYIN CONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS PAINEWEBBER INC. MUSTPAY A TOTAL OF $80,000,000 (OF WHICH $311,423 IS ALLOCATED TOKENTUCKY DEPARTMENT OF FINANCIAL INSTITUTIONS) INCLUDING$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


i


Initiated By: DEPARTMENT OF FINANCE OF THE STATE OF IDAHO


Other


Docket/Case Number: DOCKET NO. 2003-7-19



Allegations: APPLICANT ACTED IN VIOLATION OF SECTION 30-1413(7) OF THE IDAHOSECURITIES ACT IN CONNECTION WITH ISSUING RESEARCH REPORTS.THE APPLICANT ALSO FAILED TO ESTABLISH AND MAINTAIN ADEQUATESUPERVISORY PROCEDURES FOR RESEARCH AS REQUIRED UNDERSECTION 12.01.08.119 OF THE IDAHO ADMINISTRATIVE PROCEDURES ACT.








Other


CIVIL ADMINISTRATIVE PENALTY/FINE, DISGORGEMENT, CEASE ANDDESIST AND UNDERTAKING.


Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTION 30-1413(7) OF THE IDAHO SECURITIES ACT ANDSECTION 12.01.08.119 OF THE IDAHO ADMINISTRATIVE PROCEDURES ACT.IN ADDITION THE APPLICANT WAS ORDERED TO COMPLY WITH THESECTION 30-1413(7) OF THE IDAHO SECURITIES ACT AND SECTION12.01.08.119 OF THE IDAHO ADMINISTRATIVE PROCEDURES ACT INCONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS PAINEWEBBER INC. MUSTPAY A TOTAL OF $80,000,000 (OF WHICH $250,000 IS ALLOCATED TO IDAHO)INCLUDING $25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE DEPARTMENT OF FINANCE OF THESTATE OF IDAHO CERTAIN CHARGES ARISING FROM AN INVESTIGATIONOF RESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT,AND SETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PARTOF A GLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THEVARIOUS STATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PARTOF THE SETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBSPAINEWEBBER INC. HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING THE SECTION 30-1413(7) OF THE IDAHOSECURITIES ACT AND SECTION 12.01.08.119 OF THE IDAHOADMINISTRATIVE PROCEDURES ACT. IN ADDITION THE APPLICANT WASORDERED TO COMPLY WITH THE SECTION 30-1413(7) OF THE IDAHOSECURITIES ACT AND SECTION 12.01.08.119 OF THE IDAHOADMINISTRATIVE PROCEDURES ACT IN CONNECTION WITH THERESEARCH PRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS PAINEWEBBER INC. MUST PAY A TOTAL OF $80,000,000 (OFWHICH $250,000 IS ALLOCATED TO IDAHO) INCLUDING $25,000,000 AS APENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHERMONIES, $25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.


Consent






APPLICANT HAS SETTLED WITH THE DEPARTMENT OF FINANCE OF THESTATE OF IDAHO CERTAIN CHARGES ARISING FROM AN INVESTIGATIONOF RESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT,AND SETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PARTOF A GLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THEVARIOUS STATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PARTOF THE SETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBSPAINEWEBBER INC. HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING THE SECTION 30-1413(7) OF THE IDAHOSECURITIES ACT AND SECTION 12.01.08.119 OF THE IDAHOADMINISTRATIVE PROCEDURES ACT. IN ADDITION THE APPLICANT WASORDERED TO COMPLY WITH THE SECTION 30-1413(7) OF THE IDAHOSECURITIES ACT AND SECTION 12.01.08.119 OF THE IDAHOADMINISTRATIVE PROCEDURES ACT IN CONNECTION WITH THERESEARCH PRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS PAINEWEBBER INC. MUST PAY A TOTAL OF $80,000,000 (OFWHICH $250,000 IS ALLOCATED TO IDAHO) INCLUDING $25,000,000 AS APENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHERMONIES, $25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.


i


Initiated By: ARKANSAS SECURITIES DEPARTMENT


Other


CIVIAL AND ADMINISTRATIVE PENALTY/FINE, DISGORGEMENT, CEASE ANDDESIST AND UNDERTAKING.


Docket/Case Number: S-03-016-03-C007



Allegations: THE FIRM ENGAGED IN ACTS AND PRACTICES IN VIOLATION OF ARKANSASSECURITIES ACT, SECTION 23-42-308(A)(2)(G) IN CONNECTION WITHISSUING RESEARCH REPORTS. THE FIRM ALSO FAILED TO ESTABLISHAND MAINTAIN ADEQUATE SUPERVISORY PROCEDURES FOR RESEARCHAS REQUIRED UNDER SECTION 23-42-308(A)(2)(J).



Resolution:


Consent







Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING SECTIONS 23-42-308(A)(2)(G) AND (A)(2)(J) OF ARKANSASSECURITIES ACT. IN ADDITION THE APPLICANT WAS ORDERED TOCOMPLY WITH THE SECTIONS 23-42-308(A)(2)(G) AND (A)(2)(J) OFARKANSAS SECURITIES ACT IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS FINANCIAL SERVICES INC. MUST PAY A TOTAL OF$80,000,000 (OF WHICH $250,000 IS ALLOCATED TO THE ARKANSASSECURITIES DEPARTMENT) INCLUDING $25,000,000 AS A PENALTY;$25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES,$25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE ARKANSAS SECURITIESDEPARTMENT CERTAIN CHARGES ARISING FROM AN INVESTIGATION OFRESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING THE SECTIONS 23-42-308(A)(2)(G) AND (A)(2)(J)OF ARKANSAS SECURITIES ACT. IN ADDITION THE APPLICANT WASORDERED TO COMPLY WITH THE SECTIONS 23-42-308(A)(2)(G) AND (A)(2)(J)OF ARKANSAS SECURITIES ACT IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND UBSFINANCIAL MUST PAY A TOTAL OF $80,000,000 (OF WHICH $250,000 ISALLOCATED TO ARKANSAS SECURITIES DEPARTMENT) INCLUDING$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.







APPLICANT HAS SETTLED WITH THE ARKANSAS SECURITIESDEPARTMENT CERTAIN CHARGES ARISING FROM AN INVESTIGATION OFRESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING THE SECTIONS 23-42-308(A)(2)(G) AND (A)(2)(J)OF ARKANSAS SECURITIES ACT. IN ADDITION THE APPLICANT WASORDERED TO COMPLY WITH THE SECTIONS 23-42-308(A)(2)(G) AND (A)(2)(J)OF ARKANSAS SECURITIES ACT IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND UBSFINANCIAL MUST PAY A TOTAL OF $80,000,000 (OF WHICH $250,000 ISALLOCATED TO ARKANSAS SECURITIES DEPARTMENT) INCLUDING$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.


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Initiated By: ALABAMA SECURITIES COMMISSION


Other


ADMINISTRATIVE PENALTY/FINE, DISGORGEMENT, CEASE AND DESISTAND UNDERTAKING.


Docket/Case Number: CO-2003-018



Allegations: THE FIRM ENGAGED IN ACTS AND PRACTICES IN CONNECTION WITHISSUING RESEARCH REPORTS IN VIOLATION OF SECTION 8-6-3(J)(7) OFTHE ALABAMA SECURITIES ACT AND RULE 830-X-2-.06(2) PROMULGATEDTHEREUNDER. THE FIRM ALSO FAILED TO ESTABLISH AND MAINTAINADEQUATE SUPERVISORY PROCEDURES FOR RESEARCH AS REQUIREDBY RULE 830-X-3-.13(1) & (3).



Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE SECTIONS 8-6-3(J)(7) OF THE ALABAMA SECURITIES ACTAND RULES 830-X-3-.13(1)&(3) AND 830-X-2-.06(2) PROMULGATEDTHEREUNDER. IN ADDITION THE APPLICANT WAS ORDERED TO COMPLYWITH THE SECTIONS 8-6-3(J)(7) OF THE ALABAMA SECURITIES ACT ANDRULES 830-X-3-.13(1)&(3) AND 830-X-2-.06(2) PROMULGATED THEREUNDERIN CONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIAL SERVICES INC.MUST PAY A TOTAL OF $80,000,000 (OF WHICH $342,654 IS ALLOCATED TOALABAMA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


Consent





www.finra.org/brokercheck User GuidanceORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE SECTIONS 8-6-3(J)(7) OF THE ALABAMA SECURITIES ACTAND RULES 830-X-3-.13(1)&(3) AND 830-X-2-.06(2) PROMULGATEDTHEREUNDER. IN ADDITION THE APPLICANT WAS ORDERED TO COMPLYWITH THE SECTIONS 8-6-3(J)(7) OF THE ALABAMA SECURITIES ACT ANDRULES 830-X-3-.13(1)&(3) AND 830-X-2-.06(2) PROMULGATED THEREUNDERIN CONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS FINANCIAL SERVICES INC.MUST PAY A TOTAL OF $80,000,000 (OF WHICH $342,654 IS ALLOCATED TOALABAMA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE ALABAMA SECURITIES COMMISSIONCERTAIN CHARGES ARISING FROM AN INVESTIGATION OF RESEARCHANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS FINANCIALSERVICES INC. ("UBS FINANCIAL") HAVE AGREED TO PAY $25 MILLION ASDISGORGEMENT AND AN ADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION – WILL BE PAID INCONNECTION WITH RELATED PROCEEDINGS BY THE SEC, NASD ANDNYSE AND WILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFITOF CERTAIN CUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAWCONTAINED IN THE CONSENT ORDER, THE APPLICANT CONSENTED TOTHE ENTRY OF AN ORDER PROVIDING THAT APPLICANT WILL CEASE ANDDESIST FROM VIOLATING THE SECTIONS 8-6-3(J)(7) OF THE ALABAMASECURITIES ACT AND RULES 830-X-3-.13(1)&(3) AND 830-X-2-.06(2)PROMULGATED THEREUNDER. IN ADDITION THE APPLICANT WASORDERED TO COMPLY WITH THE SECTIONS 8-6-3(J)(7) OF THE ALABAMASECURITIES ACT AND RULES 830-X-3-.13(1)&(3) AND 830-X-2-.06(2)PROMULGATED THEREUNDER IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND UBSFINANCIAL MUST PAY A TOTAL OF $80,000,000 (OF WHICH $342,654 ISALLOCATED TO ALABAMA) INCLUDING $25,000,000 AS A PENALTY;$25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES,$25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.


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Initiated By: NASD





Other Product Type(s): UNKNOWN TYPE OF SECURITIES

Allegations: NASD CONDUCT RULES 2110 AND 3320, NASD MARKETPLACE RULES4613(B), 4613(E), 4613(E)(1)(C), 6620(A), 6620(1)(6) AND 6955(A), AND SECRULE 11AC1-1 - RESPONDENT MEMBER ("FIRM"), A MARKET MAKER INSECURITIES, WITHOUT MAKING REASONABLE EFFORTS TO AVOID ALOCKED OR CROSSED MARKET BY EXECUTING TRANSACTIONS WITH ALLMARKET MAKERS WHOSE QUOTATIONS WOULD BE LOCKED ORCROSSED, ENTERED BID OR ASKED QUOTATIONS IN THE NASDAQ STOCKMARKET, WHICH CAUSED A LOCKED OR CROSSED MARKET CONDITION TOOCCUR IN EACH INSTANCE. AN ORDER WAS PRESENTED TO THE FIRM ATTHE FIRM'S PUBLISHED BID OR PUBLISHED OFFER IN AN AMOUNT UP TOITS PUBLISHED QUOTATION SIZE. THE FIRM FAILED TO EXECUTE THEORDERS UPON PRESENTMENT AND THEREBY FAILED TO HONOR ITSPUBLISHED QUOTATION. THE FIRM CAUSED A LOCKED/CROSSED MARKETCONDITION PRIOR TO THE MARKET OPENING BY ENTERING A BID (ASK)QUOTATION THAT LOCKED/CROSSED ANOTHER MARKET MAKER'SQUOTATIONS WITHOUT IMMEDIATELY THEREAFTER SENDING THROUGHSELECTNET TO THE MARKET MAKER(S) WHOSE QUOTE(S) IT LOCKED ORCROSSED A TRADE-OR-MOVE MESSAGE(S) THAT WAS AT THE RECEIVINGMARKET MAKER'S QUOTED PRICE AND WHOSE AGGREGATE SIZE WAS ATLEAST 5000 SHARES. THE FIRM WAS A PARTY TO A LOCKED OR CROSSEDMARKET CONDITION PRIOR TO THE MARKET OPENING AND RECEIVED ATRADE-OR-MOVE MESSAGE IN EACH INSTANCE THROUGH SELECTNETAND WITHIN 30 SECONDS OF RECEIVING SUCH MESSAGES, FAILED TOFILL THE INCOMING TRADE-OR-MOVE MESSAGE FOR THE FULL SIZE OFTHE MESSAGE OR MOVE ITS BID DOWN (OFFER UP) BY A QUOTATIONINCREMENT THAT WOULD HAVE UNLOCKED/UNCROSSED THE MARKET.THE FIRM FAILED, WITHIN 90 SECONDS AFTER EXECUTION, TO TRANSMITTHROUGH ACT LAST SALE REPORTS OF TRANSACTIONS IN OTC EQUITYSECURITIES, AND FAILED TO DESIGNATE THROUGH ACT SUCH LAST SALEREPORTS AS LATE. THE FIRM REPORTED TO ACT LAST SALE REPORTS OFTRANSACTIONS IN OTC EQUITY SECURITIES ON AN "AS OF" BASIS WHENELECTRONIC SUBMISSION ON THE TRADE DATE OF SUCH TRANSACTIONSWAS POSSIBLE THROUGH ACT. (CONTINUE TO ITEM #14)










Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, RESPONDENTMEMBER CONSENTED TO THE DESCRIBED SANCTIONS AND TO THEENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED$72,500.

Regulator Statement THE FIRM INCORRECTLY DESIGNATED AS ".PRP" THROUGH ACT LASTSALE REPORTS OF TRANSACTIONS IN OTC EQUITY SECURITIES. THE FIRMTRANSMITTED TO OATS REPORTS THAT CONTAINED INACCURATE,INCOMPLETE, OR IMPROPERLY FORMATTED DATA. SPECIFICALLY, THESEREPORTS OMITTED THE ACCOUNT TYPE CODE.




Initiated By: NASD


Allegations: NASD CONDUCT RULES 2110 AND 3320, NASD MARKETPLACE RULES4613(B), 4613(E), 4613(E)(1)(C), 6620(A), 6620(1)(6) AND 6955(A), AND SECRULE 11AC1-1. UBS 1)ENTERED BID OR ASK QUOTATIONS IN THE NASDAQSTOCK MARKET, WHICH CAUSED A LOCKED OR CROSSED MARKETCONDITION TO OCCUR WITHOUT MAKING REASONABLE EFFORTS TOAVOID A LOCKED OR CROSSED MARKET; 2) FAILED WITHIN 90 SECONDSAFTER EXECUTION, TO TRANSMIT THROUGH ACT LAST SALE REPORTS OFTRANSACTIONS IN OTC EQUITY SECURITIES, AND FAILED TO DESIGNATETHROUGH ACT SUCH LAST SALE REPORTS AS LATE; 3) REPORTED TO ACTLAST SALE REPORTS OF TRANSACTIONS IN OTC EQUITY SECURITIES ONAN "AS OF" BASIS WHEN ELECTRONIC SUBMISSION ON THE TRADE DATEWAS POSSIBLE; 4) INCORRECTLY DESIGNATED AS "PRP" THROUGH ACTLAST SALE REPORTS OF TRANSACTIONS IN OTC EQUITY SECURITIES; 5)TRANSMITTED TO OATS REPORTS THAT OMITTED THE ACCOUNT TYPECODE.








Censure






Resolution:


Sanction Details: MONETARY FINE OF $72,500.00

Firm Statement ON JULY 3, 2003 A LETTER OF ACCEPTANCE, WAIVER AND CONSENT WASACCEPTED BY NASD OFFICE OF DISCIPLINARY AFFAIRS AND NATIONALADJUDICATORY COUNCIL.




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Initiated By: STATE OF OKLAHOMA DEPARTMENT OF SECURITIES


Other




Docket/Case Number: ODS FILE NO. 03-088



Allegations: APPLICANT VIOLATED THE OKLAHOMA SECURITIES ACT AND/OR THERULES OF THE OKLAHOMA SECURITIES DEPARTMENT BY ENGAGING INDISHONEST AND UNETHICAL PRACTICES AND FAILING TO MAINTAINADEQUATE SUPERVISORY PROCEDURES.








Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE OKLAHOMA SECURITIES ACT. IN ADDITION THE APPLICANTWAS ORDERED TO COMPLY WITH THE OKLAHOMA SECURITIES ACT INCONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS PAINEWEBBER INC. MUSTPAY A TOTAL OF $80,000,000 (OF WHICH $265,877 IS ALLOCATED TOOKLAHOMA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE OKLAHOMA DEPARTMENT OFSECURITIES CERTAIN CHARGES ARISING FROM AN INVESTIGATION OFRESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS PAINEWEBBER INC.HAVE AGREED TO PAY $25 MILLION AS DISGORGEMENT AND ANADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OFTHESE PAYMENTS - $25 MILLION – WILL BE PAID IN CONNECTION WITHRELATED PROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BEPLACED INTO A DISTRIBUTION FUND FOR THE BENEFIT OF CERTAINCUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVE RELATEDPROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTING ORDENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINEDIN THE CONSENT ORDER, THE APPLICANT CONSENTED TO THE ENTRY OFAN ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE OKLAHOMA SECURITIES ACT. IN ADDITION THE APPLICANTWAS ORDERED TO COMPLY WITH THE OKLAHOMA SECURITIES ACT INCONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS PAINEWEBBER INC. MUSTPAY A TOTAL OF $80,000,000 (OF WHICH $265,877 IS ALLOCATED TOOKLAHOMA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


Consent






APPLICANT HAS SETTLED WITH THE OKLAHOMA DEPARTMENT OFSECURITIES CERTAIN CHARGES ARISING FROM AN INVESTIGATION OFRESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS PAINEWEBBER INC.HAVE AGREED TO PAY $25 MILLION AS DISGORGEMENT AND ANADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OFTHESE PAYMENTS - $25 MILLION – WILL BE PAID IN CONNECTION WITHRELATED PROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BEPLACED INTO A DISTRIBUTION FUND FOR THE BENEFIT OF CERTAINCUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVE RELATEDPROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTING ORDENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINEDIN THE CONSENT ORDER, THE APPLICANT CONSENTED TO THE ENTRY OFAN ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE OKLAHOMA SECURITIES ACT. IN ADDITION THE APPLICANTWAS ORDERED TO COMPLY WITH THE OKLAHOMA SECURITIES ACT INCONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS PAINEWEBBER INC. MUSTPAY A TOTAL OF $80,000,000 (OF WHICH $265,877 IS ALLOCATED TOOKLAHOMA) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


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Initiated By: ARIZONA CORPORATION COMMISSION


Other




Docket/Case Number: DOCKET # S-03498A-03-0000



Allegations: APPLICANT COMMITTED DISHONEST AND UNETHICAL PRACTICES IN THESECURITIES BUSINESS UNDER ARS 44-1961(A)(13) WITHIN MEANING OFAAC R14-4-130.



Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE SECURITIES ACT OF ARIZONA. IN ADDITION THEAPPLICANT WAS ORDERED TO COMPLY WITH THE SECURITIES ACT OFARIZONA IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBSPAINEWEBBER INC. MUST PAY A TOTAL OF $80,000,000 (OF WHICH $395,321IS ALLOCATED TO ARIZONA) INCLUDING $25,000,000 AS A PENALTY;$25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES,$25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.


Consent






ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE SECURITIES ACT OF ARIZONA. IN ADDITION THEAPPLICANT WAS ORDERED TO COMPLY WITH THE SECURITIES ACT OFARIZONA IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBSPAINEWEBBER INC. MUST PAY A TOTAL OF $80,000,000 (OF WHICH $395,321IS ALLOCATED TO ARIZONA) INCLUDING $25,000,000 AS A PENALTY;$25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES,$25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE ARIZONA SECURITIES COMMISSIONCERTAIN CHARGES ARISING FROM AN INVESTIGATION OF RESEARCHANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS PAINEWEBBER INC.HAVE AGREED TO PAY $25 MILLION AS DISGORGEMENT AND ANADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OFTHESE PAYMENTS - $25 MILLION – WILL BE PAID IN CONNECTION WITHRELATED PROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BEPLACED INTO A DISTRIBUTION FUND FOR THE BENEFIT OF CERTAINCUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVE RELATEDPROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTING ORDENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINEDIN THE CONSENT ORDER, THE APPLICANT CONSENTED TO THE ENTRY OFAN ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE SECURITIES ACT OF ARIZONA. IN ADDITION THEAPPLICANT WAS ORDERED TO COMPLY WITH THE SECURITIES ACT OFARIZONA IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER AND WITH CERTAIN UNDERTAKINGS TOADOPT ENHANCED POLICIES AND PROCEDURES REASONABLY DESIGNEDTO ADDRESS POTENTIAL CONFLICTS OF INTEREST ARISING FROMRESEARCH PRACTICES. APPLICANT AND ITS AFFILIATE UBSPAINEWEBBER INC. MUST PAY A TOTAL OF $80,000,000 (OF WHICH $395,321IS ALLOCATED TO ARIZONA) INCLUDING $25,000,000 AS A PENALTY;$25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES,$25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.


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Initiated By: STATE OF ILLINOIS, SECRETARY OF STATE, SECURITIES DEPARTMENT


Allegations: VIOLATIONS OF SECTIONS 8.E.(1)(B)AND 8.12.A OF ILLINOIS SECURITIESLAWS OF 1953 AND FAILURE TO MAINTAIN ADEQUATE SUPERVISORYPROCEDURES IN VIOLATION OF SECTION 8.E.1.(E)(IV) OF THE ACT.








Other




Docket/Case Number: FILE NO. 0200674




Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE ILLINOIS SECURITIES LAW. IN ADDITION THE APPLICANTWAS ORDERED TO COMPLY WITH THE ILLINOIS SECURITIES LAW INCONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS PAINEWEBBER INC. MUSTPAY A TOTAL OF $80,000,000 (OF WHICH $956,921 IS ALLOCATED TOILLINOIS) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE ILLINOIS SECURITIES DEPARTMENTCERTAIN CHARGES ARISING FROM AN INVESTIGATION OF RESEARCHANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS PAINEWEBBER INC.HAVE AGREED TO PAY $25 MILLION AS DISGORGEMENT AND ANADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OFTHESE PAYMENTS - $25 MILLION – WILL BE PAID IN CONNECTION WITHRELATED PROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BEPLACED INTO A DISTRIBUTION FUND FOR THE BENEFIT OF CERTAINCUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVE RELATEDPROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTING ORDENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINEDIN THE CONSENT ORDER, THE APPLICANT CONSENTED TO THE ENTRY OFAN ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE ILLINOIS SECURITIES LAW. IN ADDITION THE APPLICANTWAS ORDERED TO COMPLY WITH THE ILLINOIS SECURITIES LAW INCONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS PAINEWEBBER INC. MUSTPAY A TOTAL OF $80,000,000 (OF WHICH $956,921 IS ALLOCATED TOILLINOIS) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


Consent






APPLICANT HAS SETTLED WITH THE ILLINOIS SECURITIES DEPARTMENTCERTAIN CHARGES ARISING FROM AN INVESTIGATION OF RESEARCHANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS PAINEWEBBER INC.HAVE AGREED TO PAY $25 MILLION AS DISGORGEMENT AND ANADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OFTHESE PAYMENTS - $25 MILLION – WILL BE PAID IN CONNECTION WITHRELATED PROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BEPLACED INTO A DISTRIBUTION FUND FOR THE BENEFIT OF CERTAINCUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVE RELATEDPROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTING ORDENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINEDIN THE CONSENT ORDER, THE APPLICANT CONSENTED TO THE ENTRY OFAN ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE ILLINOIS SECURITIES LAW. IN ADDITION THE APPLICANTWAS ORDERED TO COMPLY WITH THE ILLINOIS SECURITIES LAW INCONNECTION WITH THE RESEARCH PRACTICES REFERENCED IN THEORDER AND WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCEDPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESSPOTENTIAL CONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT AND ITS AFFILIATE UBS PAINEWEBBER INC. MUSTPAY A TOTAL OF $80,000,000 (OF WHICH $956,921 IS ALLOCATED TOILLINOIS) INCLUDING $25,000,000 AS A PENALTY; $25,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $25,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH AND$5,000,000 TO BE USED FOR INVESTOR EDUCATION.


i


Initiated By: CONNECTICUT




Allegations: CONSENT ORDER ENTERED ON APRIL 28, 2003 ALLEGED THATRESPONDENTS UBS WARBURG LLC (CRD 7654) AND UBS PAINEWEBBERINC. (CRD 8174) HAD 1) ENGAGED IN DISHONEST OR UNETHICALPRACTICES IN VIOLATION OF SECTION 36B-4(B) OF THECONNECTICUT UNIFORM SECURITIES ACT BY ENABLING THEIRINVESTMENT BANKING DEPARTMENTS TO EXERT IMPROPER INFLUENCEOVER FIRM RESEARCH ANALYSTS, THUS CREATING AN INHERENTCONFLICT OF INTEREST; ISSUING RESEARCH REPORTS THAT WEREAFFECTED BY SUCH CONFLICT OF INTEREST; MAKING PAYMENTS FORRESEARCH TO OTHER BROKER-DEALERS WHO WERE NOT INVOLVED INUNDERWRITING TRANSACTIONS; AND RECEIVING PAYMENTS INCONNECTION WITH UNDERWRITING TRANSACTIONS FROM OUTSIDEENTITIES FOR RESEARCH ISSUED WITHOUT MAKING PUBLIC DISCLOSUREOF THOSE PAYMENTS AS REQUIRED BY SECTION 17(B) OF THESECURITIES ACT OF 1933; AND 2) FAILED TO ESTABLISH, ENFORCE ANDMAINTAIN ADEQUATE SUPERVISORY CONTROLS TO PREVENT ANDDETECT THE ALLEGEDLY VIOLATIVE CONDUCT.













Resolution:

Other Sanctions Ordered: THE CONSENT ORDER DIRECTED RESPONDENTS UBS WARBURG LLC ANDUBS PAINEWEBBER INC. TO CEASE AND DESIST FROM REGULATORYVIOLATIONS, AND MANDATED THAT THEY COLLECTIVELY PAY $262,402 TOTHE DEPARTMENT. OF THAT AMOUNT, $150,000 CONSTITUTED A FINE AND$112,402 REPRESENTED REIMBURSEMENTFOR THE AGENCY'S LEGAL AND INVESTIGATIVE COSTS.

Sanction Details: SEE ABOVE.

Regulator Statement SEE ABOVE.


Consent


Initiated By: CONNECTICUT COMMISSIONER OF BANKING


Other


ADMINISTRATIVE PENALTY/FINE, DISGORGEMENT, CEASE AND DESIST,UNDERTAKING.


Docket/Case Number: DOCKET NO. CO-2003-6590-S



Allegations: APPLICANT ENGAGED IN DISHONEST AND UNETHICAL PRACTICES INCONNECTION WITH THE OFFER AND SALE OF A SECURITY IN VIOLATIONOF SECTION 36B-4(B) OF THE CONNECTICUT UNIFORM SECURITIES ACTAND FAILED TO MAINTAIN ADEQUATE SUPERVISORY PROCEDURES INVIOLATION OF SECTION 36B-31-6F(B) OF THE REGULATIONS.








ADMINISTRATIVE PENALTY/FINE, DISGORGEMENT, CEASE AND DESIST,UNDERTAKING.


Resolution:


Sanction Details: ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE CONNECTICUT UNIFORM SECURITIES ACT. IN ADDITIONTHE APPLICANT WAS ORDERED TO COMPLY WITH THE CONNECTICUTUNIFORM SECURITIES ACT IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS PAINEWEBBER INC. MUST PAY A TOTAL OF $80,000,000 (OFWHICH $262,402 IS ALLOCATED TO CONNECTICUT) INCLUDING $25,000,000AS A PENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS ANDOTHER MONIES, $25,000,000 TO BE USED FOR PROCUREMENT OFINDEPENDENT RESEARCH AND $5,000,000 TO BE USED FOR INVESTOREDUCATION.

Firm Statement APPLICANT HAS SETTLED WITH THE CONNECTICUT COMMISSIONER OFBANKING CERTAIN CHARGES ARISING FROM AN INVESTIGATION OFRESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS PAINEWEBBER INC.HAVE AGREED TO PAY $25 MILLION AS DISGORGEMENT AND ANADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OFTHESE PAYMENTS - $25 MILLION – WILL BE PAID IN CONNECTION WITHRELATED PROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BEPLACED INTO A DISTRIBUTION FUND FOR THE BENEFIT OF CERTAINCUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVE RELATEDPROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTING ORDENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINEDIN THE CONSENT ORDER, THE APPLICANT CONSENTED TO THE ENTRY OFAN ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE CONNECTICUT UNIFORM SECURITIES ACT. IN ADDITIONTHE APPLICANT WAS ORDERED TO COMPLY WITH THE CONNECTICUTUNIFORM SECURITIES ACT IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS PAINEWEBBER INC. MUST PAY A TOTAL OF $80,000,000 (OFWHICH $262,402 IS ALLOCATED TO CONNECTICUT) INCLUDING $25,000,000AS A PENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS ANDOTHER MONIES, $25,000,000 TO BE USED FOR PROCUREMENT OFINDEPENDENT RESEARCH AND $5,000,000 TO BE USED FOR INVESTOREDUCATION.


Consent






APPLICANT HAS SETTLED WITH THE CONNECTICUT COMMISSIONER OFBANKING CERTAIN CHARGES ARISING FROM AN INVESTIGATION OFRESEARCH ANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH CERTAIN OTHER BROKERAGE FIRMS, ARE PART OF AGLOBAL SETTLEMENT CERTAIN FIRMS HAVE REACHED WITH THE VARIOUSSTATE REGULATORS AND THE SEC, NASD, AND NYSE. AS PART OF THESETTLEMENT, THE APPLICANT AND ITS AFFILIATE UBS PAINEWEBBER INC.HAVE AGREED TO PAY $25 MILLION AS DISGORGEMENT AND ANADDITIONAL $25 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OFTHESE PAYMENTS - $25 MILLION – WILL BE PAID IN CONNECTION WITHRELATED PROCEEDINGS BY THE SEC, NASD AND NYSE AND WILL BEPLACED INTO A DISTRIBUTION FUND FOR THE BENEFIT OF CERTAINCUSTOMERS. THE REMAINDER WILL BE PAID TO RESOLVE RELATEDPROCEEDINGS BY STATE REGULATORS. WITHOUT ADMITTING ORDENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINEDIN THE CONSENT ORDER, THE APPLICANT CONSENTED TO THE ENTRY OFAN ORDER PROVIDING THAT APPLICANT WILL CEASE AND DESIST FROMVIOLATING THE CONNECTICUT UNIFORM SECURITIES ACT. IN ADDITIONTHE APPLICANT WAS ORDERED TO COMPLY WITH THE CONNECTICUTUNIFORM SECURITIES ACT IN CONNECTION WITH THE RESEARCHPRACTICES REFERENCED IN THE ORDER AND WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES. APPLICANT AND ITSAFFILIATE UBS PAINEWEBBER INC. MUST PAY A TOTAL OF $80,000,000 (OFWHICH $262,402 IS ALLOCATED TO CONNECTICUT) INCLUDING $25,000,000AS A PENALTY; $25,000,000 AS DISGORGEMENT OF COMMISSIONS ANDOTHER MONIES, $25,000,000 TO BE USED FOR PROCUREMENT OFINDEPENDENT RESEARCH AND $5,000,000 TO BE USED FOR INVESTOREDUCATION.


i


Allegations: **4/21/03**STIPULATION AND CONSENT TO PENALTY FILED BY NYSEDIVISION OF ENFORCEMENT CONSENTED TO FINDINGS:WITHOUTADMITTING OR DENYING GUILT UBS WARBURG LLC CONSENTED TOFINDINGS BY THE HEARING PANEL THAT THE FIRM:1.)VIOLATEDEXCHANGE RULE 476(A)(6) BY ENGAGING IN CONDUCT INCONSISTENTWITH JUST AND EQUITABLE PRINCIPLES OF TRADE BY:A. ENGAGING INTHE ACTS AND PRACTICES THAT CREATED OR MAINTAINEDINAPPROPRIATE INFLUENCE BY THE INVESTMENT BANKING DEPARTMENTOVER RESEARCH ANALYSTS THEREFORE IMPOSING CONFLICTS OFINTEREST ON ITS RESEARCH ANALYSTS, AND FAILING TO MANAGE THESECONFLICTS IN AN ADEQUATE OR APPROPRIATE MANNER.B. ISSUINGRESEARCH REPORTS THAT WERE AFFECTED BY THE CONFLICTS OFINTEREST IMPOSED ON ITS RESEARCH ANALYSTS AS DESCRIBEDABOVE.C. MAKING PAYMENTS FOR RESEARCH TO OTHER BROKER-DEALERS NOT INVOLVED IN AN UNDERWRITING TRANSACTION WHEN THEFIRM KNEW THAT THESE PAYMENTS WERE MADE, AT LEAST IN PART, FORRESEARCH COVERAGE, AND BY FAILING TO DISCLOSE OR CAUSE TO BEDISCLOSED IN OFFERING DOCUMENTS OR ELSEWHERE THE FACT OFSUCH PAYMENTS.D. RECEIVING PAYMENTS IN CONJUNCTION WITH ANUNDERWRITING TRANSACTION FROM OUTSIDE ENTITIES FOR RESEARCHISSUED WITHOUT DISCLOSING RECEIPT OF THAT PAYMENT TO THEPUBLIC, AS REQUIRED BY SECTION 17(B) OF THE SECURITIES ACT OF1933, AS AMENDED.2.VIOLATED EXCHANGE RULE 401 BY FAILING TOADHERE TO THE PRINCIPLES OF GOOD BUSINESS PRACTICE IN THECONDUCT OF ITS BUSINESS AFFAIRS BY:A. ENGAGING IN THE ACTS ANDPRACTICES THAT CREATED OR MAINTAINED INAPPROPRIATE INFLUENCEBY THE INVESTMENT BANKING DEPARTMENT OVER RESEARCHANALYSTS, THEREFORE IMPOSING CONFLICTS OF INTEREST ON ITSRESEARCH ANALYSTS, AND FAILING TO MANAGE THESE CONFLICTS IN ANADEQUATE OR APPROPRIATE MANNER.B. ISSUING RESEARCH REPORTSTHAT THAT WERE AFFECTED BY THE CONFLICTS OF INTEREST IMPOSEDON ITS RESEARCH ANALYSTS AS DESCRIBED ABOVE.**CONTINUED AT #13**











Docket/Case Number: HPD#: 03-70



**4/21/03**STIPULATION AND CONSENT TO PENALTY FILED BY NYSEDIVISION OF ENFORCEMENT CONSENTED TO FINDINGS:WITHOUTADMITTING OR DENYING GUILT UBS WARBURG LLC CONSENTED TOFINDINGS BY THE HEARING PANEL THAT THE FIRM:1.)VIOLATEDEXCHANGE RULE 476(A)(6) BY ENGAGING IN CONDUCT INCONSISTENTWITH JUST AND EQUITABLE PRINCIPLES OF TRADE BY:A. ENGAGING INTHE ACTS AND PRACTICES THAT CREATED OR MAINTAINEDINAPPROPRIATE INFLUENCE BY THE INVESTMENT BANKING DEPARTMENTOVER RESEARCH ANALYSTS THEREFORE IMPOSING CONFLICTS OFINTEREST ON ITS RESEARCH ANALYSTS, AND FAILING TO MANAGE THESECONFLICTS IN AN ADEQUATE OR APPROPRIATE MANNER.B. ISSUINGRESEARCH REPORTS THAT WERE AFFECTED BY THE CONFLICTS OFINTEREST IMPOSED ON ITS RESEARCH ANALYSTS AS DESCRIBEDABOVE.C. MAKING PAYMENTS FOR RESEARCH TO OTHER BROKER-DEALERS NOT INVOLVED IN AN UNDERWRITING TRANSACTION WHEN THEFIRM KNEW THAT THESE PAYMENTS WERE MADE, AT LEAST IN PART, FORRESEARCH COVERAGE, AND BY FAILING TO DISCLOSE OR CAUSE TO BEDISCLOSED IN OFFERING DOCUMENTS OR ELSEWHERE THE FACT OFSUCH PAYMENTS.D. RECEIVING PAYMENTS IN CONJUNCTION WITH ANUNDERWRITING TRANSACTION FROM OUTSIDE ENTITIES FOR RESEARCHISSUED WITHOUT DISCLOSING RECEIPT OF THAT PAYMENT TO THEPUBLIC, AS REQUIRED BY SECTION 17(B) OF THE SECURITIES ACT OF1933, AS AMENDED.2.VIOLATED EXCHANGE RULE 401 BY FAILING TOADHERE TO THE PRINCIPLES OF GOOD BUSINESS PRACTICE IN THECONDUCT OF ITS BUSINESS AFFAIRS BY:A. ENGAGING IN THE ACTS ANDPRACTICES THAT CREATED OR MAINTAINED INAPPROPRIATE INFLUENCEBY THE INVESTMENT BANKING DEPARTMENT OVER RESEARCHANALYSTS, THEREFORE IMPOSING CONFLICTS OF INTEREST ON ITSRESEARCH ANALYSTS, AND FAILING TO MANAGE THESE CONFLICTS IN ANADEQUATE OR APPROPRIATE MANNER.B. ISSUING RESEARCH REPORTSTHAT THAT WERE AFFECTED BY THE CONFLICTS OF INTEREST IMPOSEDON ITS RESEARCH ANALYSTS AS DESCRIBED ABOVE.**CONTINUED AT #13**


Resolution:

Other Sanctions Ordered: CONSENT TO CENSURE, A TOTAL PAYMENT OF $80,000,000 AND ANUNDERTAKING.

Sanction Details: **4/22/03**DECISION 03-70 ISSUED BY NYSE HEARING PANELDECISION:VIOLATED EXCHANGE RULES 476(A)(6) AND 401 BY ENGAGINGIN ACTS AND PRACTICES THAT CREATED OR MAINTAINED INAPPROPRIATEINFLUENCE BY INVESTMENT BANKING DEPARTMENT OVER RESEARCHANALYSTS, THEREFORE IMPOSING CONFLICTS OF INTEREST ON ITSRESEARCH ANALYSTS, BY FAILING TO MANAGE THESE CONFLICTS IN ANADEQUATE OR APPROPRIATE MANNER, BY ISSUING RESEARCH REPORTSTHAT WERE AFFECTED BY THE CONFLICTS OF INTEREST; BY MAKINGPAYMENTS FOR RESEARCH TO OTHER BROKER-DEALERS NOT INVOLVEDIN AN UNDERWRITING TRANSACTION AND BY FAILING TO DISCLOSE ORCAUSE TO BE DISCLOSED THE FACT OF SUCH PAYMENTS AND BYRECEIVING PAYMENTS FOR RESEARCH ISSUED IN CONJUNCTION WITH ANUNDERWRITING WITHOUT DISCLOSING THAT PAYMENT TO THE PUBLIC;VIOLATED EXCHANGE RULE 472 BY ISSUING RESEARCH REPORTS THATCONTAINED RECOMMENDATIONS AND/OR RATINGS THAT WEREEXAGGERATED OR UNWARRANTED AND/OR CONTAINED OPINIONS FORWHICH THERE WAS NO REASONABLE BASIS; BY FAILING TO DISCLOSE ORCAUSE TO BE DISCLOSED IN OFFERING DOCUMENTS OR ELSEWHEREPAYMENTS MADE TO OTHER BROKER-DEALERS FOR RESEARCH AND BYRECEIVING PAYMENTS FOR RESEARCH ISSUED IN CONJUNCTION WITH ANUNDERTAKING WITHOUT DISCLOSING THAT PAYMENT TO THE PUBLIC; ANDVIOLATED EXCHANGE RULE 342 BY FAILING TO ESTABLISH AND MAINTAINADEQUATE POLICIES, SYSTEMS, AND PROCEDURES FOR SUPERVISIONAND CONTROL OF ITS RESEARCH AND INVESTMENT BANKINGDEPARTMENTS – CONSENT TO CENSURE, A TOTAL PAYMENT OF$80,000,000 AND AN UNDERTAKING.


Decision






**4/22/03**DECISION 03-70 ISSUED BY NYSE HEARING PANELDECISION:VIOLATED EXCHANGE RULES 476(A)(6) AND 401 BY ENGAGINGIN ACTS AND PRACTICES THAT CREATED OR MAINTAINED INAPPROPRIATEINFLUENCE BY INVESTMENT BANKING DEPARTMENT OVER RESEARCHANALYSTS, THEREFORE IMPOSING CONFLICTS OF INTEREST ON ITSRESEARCH ANALYSTS, BY FAILING TO MANAGE THESE CONFLICTS IN ANADEQUATE OR APPROPRIATE MANNER, BY ISSUING RESEARCH REPORTSTHAT WERE AFFECTED BY THE CONFLICTS OF INTEREST; BY MAKINGPAYMENTS FOR RESEARCH TO OTHER BROKER-DEALERS NOT INVOLVEDIN AN UNDERWRITING TRANSACTION AND BY FAILING TO DISCLOSE ORCAUSE TO BE DISCLOSED THE FACT OF SUCH PAYMENTS AND BYRECEIVING PAYMENTS FOR RESEARCH ISSUED IN CONJUNCTION WITH ANUNDERWRITING WITHOUT DISCLOSING THAT PAYMENT TO THE PUBLIC;VIOLATED EXCHANGE RULE 472 BY ISSUING RESEARCH REPORTS THATCONTAINED RECOMMENDATIONS AND/OR RATINGS THAT WEREEXAGGERATED OR UNWARRANTED AND/OR CONTAINED OPINIONS FORWHICH THERE WAS NO REASONABLE BASIS; BY FAILING TO DISCLOSE ORCAUSE TO BE DISCLOSED IN OFFERING DOCUMENTS OR ELSEWHEREPAYMENTS MADE TO OTHER BROKER-DEALERS FOR RESEARCH AND BYRECEIVING PAYMENTS FOR RESEARCH ISSUED IN CONJUNCTION WITH ANUNDERTAKING WITHOUT DISCLOSING THAT PAYMENT TO THE PUBLIC; ANDVIOLATED EXCHANGE RULE 342 BY FAILING TO ESTABLISH AND MAINTAINADEQUATE POLICIES, SYSTEMS, AND PROCEDURES FOR SUPERVISIONAND CONTROL OF ITS RESEARCH AND INVESTMENT BANKINGDEPARTMENTS – CONSENT TO CENSURE, A TOTAL PAYMENT OF$80,000,000 AND AN UNDERTAKING.

Regulator Statement **CONT.FROM #7**C.MAKING PAYMENTS FOR RESEARCH TO OTHERBROKER DEALERS NOT INVOLVED IN AN UNDERWRITING TRANSACTIONWHEN FIRM KNEW THAT THESE PAYMENTS WERE MADE AT LEAST IN PARTFOR RESEARCH COVERAGE & BY FAILING TO DISCLOSE OR CAUSE TO BEDISCLOSED IN OFFERING DOCUMENTS OR ELSEWHERE THE FACT OFSUCH PAYMENTS.D.RECEIVING PAYMENTS FROM OUTSIDE ENTITIES FORRESEARCH ISSUED IN CONJUNCTION WITH AN UNDERWRITINGTRANSACTION WITHOUT DISCLOSING RECEIPT OF THAT PAYMENT TOPUBLIC AS REQUIRED BY SECTION 17(B) OF THE SEC. ACT OF 1933 ASAMENDED.3.VIOLATED NYSE RULE 472 RELATING TO COMMUNICATIONSWITH THE PUBLIC BY:A. ISSUING RESEARCH REPORTS THAT CONTAINEDRATINGS &/OR RECOMMENDATIONS THAT WERE EXAGGERATED ORUNWARRANTED &/OR CONTAINED OPINIONS FOR WHICH THERE WAS NOREASONABLE BASIS.B. FAILING TO DISCLOSE OR CAUSE TO BEDISCLOSED IN OFFERING DOCUMENTS OR ELSEWHERE PAYMENTS MADETO OTHER BROKER DEALERS NOT INVOLVED IN AN UNDERWRITINGTRANSACTION WHEN THESE PAYMENTS WERE MADE AT LEAST IN PARTFOR RESEARCH COVERAGE.C.RECEIVING PAYMENT FROM OUTSIDEENTITIES FOR RESEARCH ISSUED IN CONJUNCTION WITH ANUNDERWRITING TRANSACTION WITHOUT DISCLOSING RECEIPT OF THATPAYMENT TO THE PUBLIC AS REQUIRED BY SECTION 17(B) OF THE SECACT OF 1933 AS AMENDED.4.VIOLATED NYSE RULE 342 BY FAILING TOESTABLISH AND MAINTAIN ADEQUATE POLICIES SYSTEMS ANDPROCEDURES FOR SUPERVISION & CONTROL OF THE RESEARCH ANDINVESTMENT BANKING DEPARTMENTS REASONABLY DESIGNED TODETECT & PREVENT FOREGOING INVESTMENT BANKING INFLUENCES &MANAGE THE CONFLICTS OF INTEREST INCLUDING A SEPARATE SYSTEMOF FOLLOW-UP AND REVIEW TO ASSURE COMPLIANCE WITH APPLICABLENYSE RULES.STIPULATED SANCTION: THE IMPOSITION BY THE NYSEOF:1.)A CENSURE;2.)A TOTAL PAYMENT OF $80,000,000; & 3.)ANUNDERTAKING.**5/23/03**THE DECISION IS NOW FINAL AND EFFECTIVE IMMEDIATELY.CONTACT:EVELYN PENA 212-656-5211


Initiated By: NEW YORK STOCK EXCHANGE, INC.

Allegations: VIOLATIONS OF NYSE RULES 342, 401, 472 AND 476(A)(6)








Other


ADMINISTRATIVE PENALTY/FINE, DISGORGEMENT, CENSURE ANDUNDERTAKING


Docket/Case Number:




Resolution:


Sanction Details: CENSURE AND TOTAL PAYMENT OF $80,000,000 AS SPECIFIED IN RELATEDACTION FILED WITH THE SEC INCLUDING $25,000,000 AS A PENALTY;$25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES,$25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.UNDERTAKING TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES INCLUDING ANUNDERTAKING TO INFORM THE NYSE IN WRITING THAT THE APPLICANTHAS ADOPTED SUCH POLICIES ANDPROCEDURES.

Firm Statement APPLICANT HAS SETTLED WITH THE NYSE CERTAIN CHARGES ARISINGFROM AN INVESTIGATION OF RESEARCH ANALYST CONFLICTS OFINTEREST. THIS SETTLEMENT, AND SETTLEMENTS WITH 9 OTHERBROKERAGE FIRMS, ARE PART OF THE GLOBAL SETTLEMENT THE FIRMSHAVE REACHED WITH THE SEC, NASD, NYSE, AND VARIOUS STATEREGULATORS. WITHOUT ADMITTING OR DENYING THE ALLEGATIONS INTHE STIPULATION AND CONSENT WITH THE NYSE, THE APPLICANTCONSENTED TO FINDINGS THAT IT VIOLATED NYSE RULES 476(A)(6) AND401 BY ENGAGING IN ACTS AND PRACTICES THAT CREATED ORMAINTAINED INAPPROPRIATE INFLUENCE BY ITS INVESTMENT BANKINGDEPARTMENT OVER RESEARCH ANALYSTS, THEREFORE IMPOSINGCONFLICTS OF INTEREST ON ITS RESEARCH ANALYSTS, BY FAILING TOMANAGE THESE CONFLICTS IN AN ADEQUATE OR APPROPRIATE MANNER,BY ISSUING RESEARCH REPORTS THAT WERE AFFECTED BY THECONFLICTS OF INTEREST; BY MAKING PAYMENTS FOR RESEARCH TOOTHER BROKER-DEALERS NOT INVOLVED IN AN UNDERWRITINGTRANSACTION AND BY FAILING TO DISCLOSE OR CAUSE TO BEDISCLOSED THAT FACT OF SUCH PAYMENTS AND BY RECEIVINGPAYMENTS FOR RESEARCH ISSUED IN CONJUNCTION WITH ANUNDERWRITING WITHOUT DISCLOSING THAT PAYMENT TO THE PUBLIC;VIOLATED NYSE RULE 472 BY ISSUING RESEARCH REPORTS THATCONTAINED RECOMMENDATIONS AND/OR RATINGS THAT WEREEXAGGERATED OR UNWARRANTED AND/OR CONTAINED OPINIONS FORWHICH THERE WAS NO REASONABLE BASIS; BY FAILING TO DISCLOSE ORCAUSE TO BE DISCLOSED IN OFFERING DOCUMENTS OR ELSEWHEREPAYMENTS MADE TO OTHER BROKER-DEALERS FOR RESEARCH AND BYRECEIVING PAYMENTS FOR RESEARCH ISSUED IN CONJUNCTION WITH ANUNDERTAKING WITHOUT DISCLOSING THAT PAYMENT TO THE PUBLIC; ANDVIOLATED NYSE RULE 342 BY FAILING TO ESTABLISH AND MAINTAINADEQUATE POLICIES, SYSTEMS, AND PROCEDURES FOR SUPERVISIONAND CONTROL OF ITS RESEARCH AND INVESTMENT BANKINGDEPARTMENTS. IN ADDITION THE APPLICANT CONSENTED TO CENSURE, ATOTAL PAYMENT OF $80,000,000 AND AN UNDERTAKING.

Sanctions Ordered: CensureMonetary/Fine $80,000,000.00Disgorgement/Restitution







APPLICANT HAS SETTLED WITH THE NYSE CERTAIN CHARGES ARISINGFROM AN INVESTIGATION OF RESEARCH ANALYST CONFLICTS OFINTEREST. THIS SETTLEMENT, AND SETTLEMENTS WITH 9 OTHERBROKERAGE FIRMS, ARE PART OF THE GLOBAL SETTLEMENT THE FIRMSHAVE REACHED WITH THE SEC, NASD, NYSE, AND VARIOUS STATEREGULATORS. WITHOUT ADMITTING OR DENYING THE ALLEGATIONS INTHE STIPULATION AND CONSENT WITH THE NYSE, THE APPLICANTCONSENTED TO FINDINGS THAT IT VIOLATED NYSE RULES 476(A)(6) AND401 BY ENGAGING IN ACTS AND PRACTICES THAT CREATED ORMAINTAINED INAPPROPRIATE INFLUENCE BY ITS INVESTMENT BANKINGDEPARTMENT OVER RESEARCH ANALYSTS, THEREFORE IMPOSINGCONFLICTS OF INTEREST ON ITS RESEARCH ANALYSTS, BY FAILING TOMANAGE THESE CONFLICTS IN AN ADEQUATE OR APPROPRIATE MANNER,BY ISSUING RESEARCH REPORTS THAT WERE AFFECTED BY THECONFLICTS OF INTEREST; BY MAKING PAYMENTS FOR RESEARCH TOOTHER BROKER-DEALERS NOT INVOLVED IN AN UNDERWRITINGTRANSACTION AND BY FAILING TO DISCLOSE OR CAUSE TO BEDISCLOSED THAT FACT OF SUCH PAYMENTS AND BY RECEIVINGPAYMENTS FOR RESEARCH ISSUED IN CONJUNCTION WITH ANUNDERWRITING WITHOUT DISCLOSING THAT PAYMENT TO THE PUBLIC;VIOLATED NYSE RULE 472 BY ISSUING RESEARCH REPORTS THATCONTAINED RECOMMENDATIONS AND/OR RATINGS THAT WEREEXAGGERATED OR UNWARRANTED AND/OR CONTAINED OPINIONS FORWHICH THERE WAS NO REASONABLE BASIS; BY FAILING TO DISCLOSE ORCAUSE TO BE DISCLOSED IN OFFERING DOCUMENTS OR ELSEWHEREPAYMENTS MADE TO OTHER BROKER-DEALERS FOR RESEARCH AND BYRECEIVING PAYMENTS FOR RESEARCH ISSUED IN CONJUNCTION WITH ANUNDERTAKING WITHOUT DISCLOSING THAT PAYMENT TO THE PUBLIC; ANDVIOLATED NYSE RULE 342 BY FAILING TO ESTABLISH AND MAINTAINADEQUATE POLICIES, SYSTEMS, AND PROCEDURES FOR SUPERVISIONAND CONTROL OF ITS RESEARCH AND INVESTMENT BANKINGDEPARTMENTS. IN ADDITION THE APPLICANT CONSENTED TO CENSURE, ATOTAL PAYMENT OF $80,000,000 AND AN UNDERTAKING.


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Censure



Docket/Case Number: 02-MSI-40



Allegations: ALLEGED VIOLATIONS OF CBOT RULES 444.03, AND 545.02. IN THAT LESSTHAN TWO BUSINESS DAYS PRIOR TO THE FIRM DELIVERY DAY, UBSWMADE TRANSFER TRADES FOR THE PURPOSE OF OFFSETTING EXISTINGPOSITIONS WHERE NO CHANGE OF OWNERSHIP WAS INVOLVED, AND THEDATE OF EXECUTION OF THE POSITIONS BEING TRANSFERRED WAS NOTTHE SAME AS THE TRANSFER DATE; AND THAT UBSW FAILED TOACCURATELY REPORT ITS OPEN INTEREST TO THE EXCHANGE.








Resolution:


Sanction Details: MONETARY FINE OF $40,000

Firm Statement ON APRIL 1, 2003 UBSW WAS ORDERED TO PAY A FINE IN THE AMOUNT OF$40,000 TO THE CBOT FOR ITS VIOLATIONS OF REGULATIONS 444.03 AND545.02.


Decision


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Allegations: SECTION 17(B) OF THE SECURITIES ACT, NASD RULES 2110, 2210(D)(1),2210(D)(1)(A), 2210(D)(2) AND 3010(A) – RESPONDENT MEMBER ENGAGEDIN ACTS AND PRACTICES THAT CREATED AND/OR MAINTAINEDINAPPROPRIATE INFLUENCE BY THE INVESTMENT BANKING DEPARTMENTOVER RESEARCH ANALYSTS AND THEREFORE IMPOSED CONFLICTS OFINTEREST ON RESEARCH ANALYSTS AND FAILED TO MANAGE THESECONFLICTS IN AN ADEQUATE AND APPROPRIATE MANNER; ISSUEDRESEARCH REPORTS ON COMPANIES THAT WERE NOT BASED ONPRINCIPLES OF FAIR DEALING AND GOOD FAITH AND DID NOT PROVIDE ASOUND BASIS FOR EVALUATING FACTS, CONTAINED EXAGGERATED ORUNWARRANTED CLAIMS ABOUT THESE COMPANIES, AND/OR CONTAINEDOPINIONS FOR WHICH THERE WAS NO REASONABLE BASIS; RECEIVEDPAYMENTS IN CONJUNCTION WITH AN UNDERWRITING FROM OUTSIDEENTITIES FOR RESEARCH WITHOUT DISCLOSING RECEIPT OF THATPAYMENT TO THE PUBLIC; MADE PAYMENTS FOR RESEARCH TO OTHERBROKER-DEALERS NOT INVOLVED IN AN UNDERWRITING TRANSACTIONWHEN THE FIRM KNEW THAT THESE PAYMENTS WERE MADE, AT LEAST INPART, FOR RESEARCH COVERAGE AND FAILED TO DISCLOSE, OR CAUSETO BE DISCLOSED IN OFFERING DOCUMENTS OR ELSEWHERE THE FACTOF SUCH PAYMENTS; AND FAILED TO ESTABLISH AND MAINTAIN A SYSTEMTO SUPERVISE THE ACTIVITIES OF EACH REGISTERED REPRESENTATIVEAND ASSOCIATED PERSON REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH APPLICABLE SECURITIES LAWS, REGULATIONS, ANDNASD RULES, FAILED TO ESTABLISH AND MAINTAIN ADEQUATE POLICIES,SYSTEMS, AND PROCEDURES FOR SUPERVISION AND CONTROL OF THERESEARCH AND INVESTMENT BANKING DEPARTMENTS REASONABLYDESIGNED TO DETECT AND PREVENT THE FOREGOING INVESTMENTBANKING INFLUENCES AND MANAGE THE CONFLICTS OF INTEREST,INCLUDING A SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW TO ASSURECOMPLIANCE WITH APPLICABLE NASD CONDUCT RULES.







Initiated By: NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.




Docket/Case Number: CAF030022



SECTION 17(B) OF THE SECURITIES ACT, NASD RULES 2110, 2210(D)(1),2210(D)(1)(A), 2210(D)(2) AND 3010(A) – RESPONDENT MEMBER ENGAGEDIN ACTS AND PRACTICES THAT CREATED AND/OR MAINTAINEDINAPPROPRIATE INFLUENCE BY THE INVESTMENT BANKING DEPARTMENTOVER RESEARCH ANALYSTS AND THEREFORE IMPOSED CONFLICTS OFINTEREST ON RESEARCH ANALYSTS AND FAILED TO MANAGE THESECONFLICTS IN AN ADEQUATE AND APPROPRIATE MANNER; ISSUEDRESEARCH REPORTS ON COMPANIES THAT WERE NOT BASED ONPRINCIPLES OF FAIR DEALING AND GOOD FAITH AND DID NOT PROVIDE ASOUND BASIS FOR EVALUATING FACTS, CONTAINED EXAGGERATED ORUNWARRANTED CLAIMS ABOUT THESE COMPANIES, AND/OR CONTAINEDOPINIONS FOR WHICH THERE WAS NO REASONABLE BASIS; RECEIVEDPAYMENTS IN CONJUNCTION WITH AN UNDERWRITING FROM OUTSIDEENTITIES FOR RESEARCH WITHOUT DISCLOSING RECEIPT OF THATPAYMENT TO THE PUBLIC; MADE PAYMENTS FOR RESEARCH TO OTHERBROKER-DEALERS NOT INVOLVED IN AN UNDERWRITING TRANSACTIONWHEN THE FIRM KNEW THAT THESE PAYMENTS WERE MADE, AT LEAST INPART, FOR RESEARCH COVERAGE AND FAILED TO DISCLOSE, OR CAUSETO BE DISCLOSED IN OFFERING DOCUMENTS OR ELSEWHERE THE FACTOF SUCH PAYMENTS; AND FAILED TO ESTABLISH AND MAINTAIN A SYSTEMTO SUPERVISE THE ACTIVITIES OF EACH REGISTERED REPRESENTATIVEAND ASSOCIATED PERSON REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH APPLICABLE SECURITIES LAWS, REGULATIONS, ANDNASD RULES, FAILED TO ESTABLISH AND MAINTAIN ADEQUATE POLICIES,SYSTEMS, AND PROCEDURES FOR SUPERVISION AND CONTROL OF THERESEARCH AND INVESTMENT BANKING DEPARTMENTS REASONABLYDESIGNED TO DETECT AND PREVENT THE FOREGOING INVESTMENTBANKING INFLUENCES AND MANAGE THE CONFLICTS OF INTEREST,INCLUDING A SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW TO ASSURECOMPLIANCE WITH APPLICABLE NASD CONDUCT RULES.


Resolution:

Other Sanctions Ordered: PAYMENT OF $25,000,000 FOR THE PROCUREMENT OF INDEPENDENTRESEARCH, AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION.

Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, UBS WARBURG LLCCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS, THEREFORE, THE FIRM IS CENSURED, REQUIRED TO PAY$80,000,000 AS SPECIFIED IN THE FINAL JUDGMENT ORDERED IN ARELATED ACTION FILED BY THE SEC WHICH INCLUDES A FINE OF$25,000,000, DISGORGEMENT OF $25,000,000 IN COMMISSIONS, FEES ANDOTHER MONIES, PAYMENT OF $25,000,000 FOR THE PROCUREMENT OFINDEPENDENT RESEARCH, AND $5,000,000 TO BE USED FOR INVESTOREDUCATION. THE MONETARY SANCTIONS IMPOSED BY NASD SHALL BEREDUCED BY THE AMOUNTS PAID BY RESPONDENT PURSUANT TO THEFINAL JUDGMENT.

Regulator Statement RESPONDENT AGREES THAT IT SHALL NOT SEEK OR ACCEPT, DIRECTLYOR INDIRECTLY, REIMBURSEMENT OR INDEMNIFICATION, INCLUDING BUTNOT LIMITED TO PAYMENT MADE PURSUANT TO ANY INSURANCE POLICY,WITH REGARD TO ANY FINE/PENALTY AMOUNTS THAT RESPONDENTSHALL PAY PURSUANT TO SECTION II OF THE FINAL JUDGMENT,REGARDLESS OF WHETHER SUCH FINE/PENALTY AMOUNTS OR ANY PARTTHEREOF ARE ADDED TO THE DISTRIBUTION FUND ACCOUNT OROTHERWISE USED FOR THE BENEFIT OF INVESTORS. RESPONDENTFURTHER AGREES THAT IT SHALL NOT CLAIM, ASSET, OR APPLY FOR A TAXDEDUCTION OR TAX CREDIT WITH REGARD TO ANY FEDERAL, STATE, ORLOCAL TAX FOR ANY FINE/PENALTY AMOUNTS THAT RESPONDENT SHALLPAY PURSUANT TO SECTION II OF THE FINAL JUDGMENT, REGARDLESS OFWHETHER SUCH FINE/PENALTY AMOUNTS OR ANY PART THEREOF AREADDED TO THE DISTRIBUTION FUND ACCOUNT OR OTHERWISE USED FORTHE BENEFIT OF INVESTORS. RESPONDENT UNDERSTANDS ANDACKNOWLEDGES THAT THESE PROVISIONS ARE NOT INTENDED TO IMPLYTHAT NASD WOULD AGREE THAT ANY OTHER AMOUNTS RESPONDENTSHALL PAY PURSUANT TO THE FINAL JUDGMENT MAY BE REIMBURSED ORINDEMNIFIED (WHETHER PURSUANT TO AN INSURANCE POLICY OROTHERWISE) UNDER APPLICABLE LAW OR MAY BE THE BASIS FOR ANYTAX DEDUCTION OR TAX CREDIT WITH REGARD TO ANY FEDERAL, STATE,OR LOCAL TAX.








RESPONDENT AGREES THAT IT SHALL NOT SEEK OR ACCEPT, DIRECTLYOR INDIRECTLY, REIMBURSEMENT OR INDEMNIFICATION, INCLUDING BUTNOT LIMITED TO PAYMENT MADE PURSUANT TO ANY INSURANCE POLICY,WITH REGARD TO ANY FINE/PENALTY AMOUNTS THAT RESPONDENTSHALL PAY PURSUANT TO SECTION II OF THE FINAL JUDGMENT,REGARDLESS OF WHETHER SUCH FINE/PENALTY AMOUNTS OR ANY PARTTHEREOF ARE ADDED TO THE DISTRIBUTION FUND ACCOUNT OROTHERWISE USED FOR THE BENEFIT OF INVESTORS. RESPONDENTFURTHER AGREES THAT IT SHALL NOT CLAIM, ASSET, OR APPLY FOR A TAXDEDUCTION OR TAX CREDIT WITH REGARD TO ANY FEDERAL, STATE, ORLOCAL TAX FOR ANY FINE/PENALTY AMOUNTS THAT RESPONDENT SHALLPAY PURSUANT TO SECTION II OF THE FINAL JUDGMENT, REGARDLESS OFWHETHER SUCH FINE/PENALTY AMOUNTS OR ANY PART THEREOF AREADDED TO THE DISTRIBUTION FUND ACCOUNT OR OTHERWISE USED FORTHE BENEFIT OF INVESTORS. RESPONDENT UNDERSTANDS ANDACKNOWLEDGES THAT THESE PROVISIONS ARE NOT INTENDED TO IMPLYTHAT NASD WOULD AGREE THAT ANY OTHER AMOUNTS RESPONDENTSHALL PAY PURSUANT TO THE FINAL JUDGMENT MAY BE REIMBURSED ORINDEMNIFIED (WHETHER PURSUANT TO AN INSURANCE POLICY OROTHERWISE) UNDER APPLICABLE LAW OR MAY BE THE BASIS FOR ANYTAX DEDUCTION OR TAX CREDIT WITH REGARD TO ANY FEDERAL, STATE,OR LOCAL TAX.


Initiated By: NASD REGULATION, INC.


Other


ADMINISTRATIVE PENALTY/FINE, CENSURE, DISGORGEMENT ANDUNDERTAKING.


Docket/Case Number: NO. CAF030022



Allegations: VIOLATIONS OF NASD CONDUCT RULES 2110, 2210 (D)(1), 2210 (1)(A),2210(D)(2) AND 3010(A) AND FAILURE TO COMPLY WITH SECTION 17(B) OFTHE SECURITIES ACT OF 1933.



Resolution:


Sanction Details: CENSURE AND TOTAL PAYMENT OF $80,000,000 AS SPECIFIED IN RELATEDACTION FILED WITH THE SEC INCLUDING $25,000,000 AS A PENALTY;$25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES,$25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION. INADDITION APPLICANT CONSENTED TO COMPLY WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES.








CENSURE AND TOTAL PAYMENT OF $80,000,000 AS SPECIFIED IN RELATEDACTION FILED WITH THE SEC INCLUDING $25,000,000 AS A PENALTY;$25,000,000 AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES,$25,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH AND $5,000,000 TO BE USED FOR INVESTOR EDUCATION. INADDITION APPLICANT CONSENTED TO COMPLY WITH CERTAINUNDERTAKINGS TO ADOPT ENHANCED POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS POTENTIAL CONFLICTS OFINTEREST ARISING FROM RESEARCH PRACTICES.

Firm Statement APPLICANT HAS SETTLED WITH THE NASD CERTAIN CHARGES ARISINGFROM AN INVESTIGATION OF RESEARCH ANALYST CONFLICTS OFINTEREST. THIS SETTLEMENT, AND SETTLEMENTS WITH NINE OTHERBROKERAGE FIRMS, ARE PART OF THE GLOBAL SETTLEMENT THE FIRMSHAVE REACHED WITH THE SEC, NASD, NYSE, AND VARIOUS STATEREGULATORS. WITHOUT ADMITTING OR DENYING THE ALLEGATIONS ORFINDINGS IN THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT WITHTHE NASD, THE APPLICANT CONSENTED TO FINDINGS THAT IT VIOLATEDNASD CONDUCT RULE 2110 BY ENGAGING IN ACTS AND PRACTICES THATCREATED OR MAINTAINED INAPPROPRIATE INFLUENCE BY THEINVESTMENT BANKING DEPARTMENT OVER RESEARCH ANALYSTS,THEREFORE IMPOSING CONFLICTS OF INTEREST ONITS RESEARCH ANALYSTS, BY FAILING TO MANAGE THESE CONFLICTS INAN ADEQUATE OR APPROPRIATE MANNER;VIOLATED NASD CONDUCT RULES 2110, 2210(D)(1) AND 2210(D)(2) BYISSUING RESEARCH REPORTS ON COMPANIES THAT WERE NOT BASEDON PRINCIPLES OF FAIR DEALING AND GOOD FAITH AND DID NOTPROVIDE A SOUND BASIS FOR EVALUATING FACTS, CONTAINEDEXAGGERATED OR UNWARRANTED CLAIMS ABOUT THESE COMPANIESAND/OR CONTAINED OPINIONS FOR WHICH THERE WAS NO REASONABLEBASIS; FAILED TO COMPLY WITH SECTION 17(B) OF THE SECURITIES ACTOF 1933 AND VIOLATED NASD CONDUCT RULES 2110 AND 2210(D)(1)(A) BYRECEIVING PAYMENTS FOR RESEARCH ISSUED IN CONJUNCTION WITH ANUNDERWRITING WITHOUT DISCLOSING THAT PAYMENT TO THE PUBLIC;VIOLATED NASD CONDUCT RULE 2110 AND 2210(D)(1)(A) BY MAKINGPAYMENTS FOR RESEARCH TO OTHER BROKER-DEALERS NOT INVOLVEDIN ANUNDERWRITING TRANSACTION AND BY FAILING TO DISCLOSE OR CAUSETO BE DISCLOSED THE FACT OF SUCH PAYMENTS; AND VIOLATED NASDCONDUCT RULE 3010(A) BY FAILING TO ESTABLISH AND MAINTAINADEQUATE POLICIES, SYSTEMS, AND PROCEDURES FOR SUPERVISIONAND CONTROL OF ITS RESEARCH ANDINVESTMENT BANKING DEPARTMENTS. IN ADDITION THE APPLICANTCONSENTED TO CENSURE, A TOTAL PAYMENT OF $80,000,000 AND ANUNDERTAKING.


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Censure



Docket/Case Number: 02-MSI-009



Allegations: ALLEGED VIOLATIONS OF CBOT RULES 444.03, AND 545.02. IN THAT LESSTHAN TWO BUSINESS DAYS PRIOR TO THE FIRM DELIVERY DAY, UBSWMADE TRANSFER TRADES FOR THE PURPOSE OF OFFSETTING EXISTINGPOSITIONS WHERE NO CHANGE OF OWNERSHIP WAS INVOLVED, AND THEDATE OF EXECUTION OF THE POSITIONS BEING TRANSFERRED WAS NOTTHE SAME AS THE TRANSFER DATE; AND THAT UBSW FAILED TOACCURATELY REPORT ITS OPEN INTEREST TO THE EXCHANGE.



Resolution:


Sanction Details: MONETARY FINE OF $12,000

Firm Statement ON JULY 9, 2002 UBSW SETTLED WITH THE CBOT WITHOUT ADMITTING ORDENYING ANY VIOLATION OF CBOT RULES AND PAID A MONETARY FINE OF$12,000.


Settled


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Allegations: NASD MARKETPLACE RULE 6130(D) - WITHOUT ADMITTING OR DENYINGTHE ALLEGATIONS, THE RESPONDENT MEMBER CONSENTED TO THEENTRY OF FINDINGS THAT IT EXECUTED SHORT SALE TRANSACTIONSAND FAILED TO REPORT THESE TRANSACTIONS WITH A SHORT SALEMODIFIER. RESPONDENT MEMBER ALSO INCORRECTLY REPORTED LONGSALE TRANSACTIONS AS SHORT SALES. FURTHER, THE RESPONDENTMEMBER FAILED TO REPORT TO ACT THE CORRECT SYMBOL INDICATINGWHETHER THE TRANSACTION WAS A BUY, SELL, SELL SHORT, SELL SHORTEXEMPT, OR CROSS FOR SEVERAL TRANSACTIONS.














NASD MARKETPLACE RULE 6130(D) - WITHOUT ADMITTING OR DENYINGTHE ALLEGATIONS, THE RESPONDENT MEMBER CONSENTED TO THEENTRY OF FINDINGS THAT IT EXECUTED SHORT SALE TRANSACTIONSAND FAILED TO REPORT THESE TRANSACTIONS WITH A SHORT SALEMODIFIER. RESPONDENT MEMBER ALSO INCORRECTLY REPORTED LONGSALE TRANSACTIONS AS SHORT SALES. FURTHER, THE RESPONDENTMEMBER FAILED TO REPORT TO ACT THE CORRECT SYMBOL INDICATINGWHETHER THE TRANSACTION WAS A BUY, SELL, SELL SHORT, SELL SHORTEXEMPT, OR CROSS FOR SEVERAL TRANSACTIONS.


Resolution:


Sanction Details: A FINE OF $2,000.




Initiated By: NASD REGULATION INC.




Allegations: NASDR ALLEGES THAT FOR THE THE PERIOD OF NOVEMBER 1998THROUGH FEBRUARY 1999 UBSW EXECUTED 15 SHORT SALETRANSACTIONS AND FAILED TO REPORT EACH OF THE TRANSACTIONSWITH A SHORT SALE MODIFIER, INCORRECTLY REPORTED 17 LONG SALETRANSACTIONS AS SHORT SALES, AND FAILED TO REPORT TO ACT THECORRECT SYMBOL INDICATION WHETHER THE TRANSACTIONS WERE ABUY, SELL, SELL SHORT EXEMPT, OR CROSS FOR 8 TRANSACTIONS. NASDMARKET PLACE RULE 6130 (D)








Other


LETTER OF ACCEPTANCE WAIVER AND CONSENT




Resolution:


Sanction Details: A MONETARY FINE OF $2000 WAS PAID ON 07/01/2002

Firm Statement ON JULY 1, 2002 A LETTER OF ACCEPTANCE, WAIVER AND CONSENT WASACCEPTED BY NASD REGULATION, INC.'S OFFICE OF DISCIPLIANRYAFFAIRS AND THE NATIONAL ADJUDICATORY COUNCIL.




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Allegations: NASD RULES 2210, 3010 AND 3360 - WITHOUT ADMITTING OR DENYING THEALLEGATIONS, THE RESPONDENT CONSENTED TO THE ENTRY OFFINDINGS THAT IT INCORRECTLY CALCULATED THE SHORT INTERESTPOSITION AND REPORTED ITS MONTHLY SHORT INTEREST POSITION TONASD THAT SHOULD HAVE BEEN EXCLUDED PURSUANT TO SEC RULE10A-1(E)(10). THE FIRM?S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO THE APPLICABLE SECURITIES LAWS AND REGULATIONSCONCERNING SHORT INTEREST REPORTING. SPECIFICALLY, THE FIRM?SSUPERVISORY SYSTEM DID NOT INCLUDE WRITTEN SUPERVISORYPROCEDURES PROVIDING FOR THE IDENTIFICATION OF THE PERSONRESPONSIBLE AT THE FIRM TO ENSURE COMPLIANCE WITH THEAPPLICABLE RULES; A STATEMENT OF THE STEPS THAT SUCH PERSONSHOULD TAKE TO ENSURE COMPLIANCE; A STATEMENT AS TO HOWOFTEN SUCH PERSON SHOULD TAKE SUCH STEPS; AND A STATEMENT ASTO HOW ENFORCEMENT OF SUCH WRITTEN SUPERVISORY PROCEDURESSHOULD BE DOCUMENTED AT THE FIRM.













Resolution:


Sanction Details: A CENSURE AND A FINE OF $7,500 ($2,500 FOR SHORT INTERESTREPORTING VIOLATION AND $5,000 FOR SUPERVISION VIOLATION).




Initiated By: NASD REGULATION INC.


Other


LETTER OF ACCEPTANCE WAIVER AND CONSENT





Allegations: NASD MARKET REGULATION ALLEGES THAT FROM MAY 1999, TODECEMBER 1999, IN FIVE SEPARATE INSTANCES, UBSW OVER REPORTEDSHORT INTEREST POSITIONS AND VIOLATED NASD CONDUCT RULES 3360,2110 AND 3010.



Resolution:









Sanction Details: A CENSURE AND A FINE OF $7,500 ($2,500 FOR SHORT INTERSTREPORTING AND $5,000 FOR LACK OF RELATED WRITTEN SUPERVISORYPROCEDURES).

Firm Statement ON MAY 6, 2002 A LETTER OF ACCEPTANCE, WAIVER AND CONSENT WASACCEPTED BY NASD REGULATION, INC.'S OFFICE OF DISCIPLINARYAFFAIRS AND THE NATIONAL ADJUDICATORY COUNCIL. PAYMENT WILL BEMADE IMMEDIATLY UPON RECIPT OF INVOICE FROM THE NASD.



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Allegations: SEC RULES 11AC1-1, 11AC1-4,NASD RULES 2110, 3320, 4613(B),4613(E),4613(E)(1)(C),4632(A)(9),6620(A)(6) - WITHOUT ADMITTING OR DENYING THEALLEGATIONS, THE RESPONDENT MEMBER CONSENTED TO THE ENTRYOF FINDINGS THAT IT INCORRECTLY DESIGNATED AS ".PRP" THROUGHACT REPORTS OF TRANSACTIONS IN NASDAQ NATIONAL MARKETSECURITIES FOR WHICH THE EXECUTION PRICE WAS NOT BASED ON APRIOR REFERENCE POINT IN TIME;FAILED TO DISPLAY IMMEDIATELYCUSTOMER LIMIT ORDERS IN NASDAQ SECURITIES IN ITS PUBLICQUOTATION WHEN EACH SUCH ORDER WAS AT A PRICE THAT WOULDHAVE IMPROVED THE FIRM'S BID OR OFFER IN EACH SUCH SECURITY; ORWHEN THE ORDER WAS PRICED EQUAL TO THE FIRM'S BID OR OFFER ANDTHE NATIONAL BEST BID OR OFFER FOR EACH SUCH SECURITY, AND THESIZE OF THE ORDER REPRESENTED MORE THAN A DE MINIMIS CHANGE INRELATION TO THE SIZE ASSOCIATED WITH THE FIRM'S BID OR OFFER INEACH SUCH SECURITY;WITHOUT MAKING REASONABLE EFFORTS TOAVOID A LOCKED OR CROSSED MARKET BY EXECUTING TRANSACTIONSWITH ALL MARKET PARTICIPANTS WHOSE QUOTATIONS WOULD BELOCKED OR CROSSED, ENTERED A BID OR ASK QUOTATION IN THENASDAW STOCK MARKET, INC. IN SECURITIES FOR WHICH IT WAS AMARKET MAKER THAT CAUSED A LOCKED OR CROSSED MARKETCONDITION TO OCCUR IN EACH INSTANCE; IN INSTANCES IN WHICH THEFIRM LOCKED/CROSSED THE MARKET DURING THE PRE-OPENINGMARKET PERIOD IN NASDAQ SECURITIES FOR WHICH IT WAS A MARKETMAKER AND FAILED IMMEDIATELY THEREAFTER TO SEND A TRADE-OR-MOVE MESSAGE THROUGH SELECTNET TO THE MARKET PARTICIPANTWHOSE QUOTE IT LOCKED OR CROSSED THAT WAS PRICED AT THERECEIVING MARKET PARTICIPANT'S QUOTED PRICE AND/OR FAILED TOSEND A TRADE-OR-MOVE MESSAGE THROUGH SELECTNET WITH ANAGGREGATE SIZE OF AT LEAST 5,000 SHARES TO ALL MARKETPARTICIPANTS WHOSE QUOTES IT LOCKED/CROSSED; [CONTINUED INITEM #13]














SEC RULES 11AC1-1, 11AC1-4,NASD RULES 2110, 3320, 4613(B),4613(E),4613(E)(1)(C),4632(A)(9),6620(A)(6) - WITHOUT ADMITTING OR DENYING THEALLEGATIONS, THE RESPONDENT MEMBER CONSENTED TO THE ENTRYOF FINDINGS THAT IT INCORRECTLY DESIGNATED AS ".PRP" THROUGHACT REPORTS OF TRANSACTIONS IN NASDAQ NATIONAL MARKETSECURITIES FOR WHICH THE EXECUTION PRICE WAS NOT BASED ON APRIOR REFERENCE POINT IN TIME;FAILED TO DISPLAY IMMEDIATELYCUSTOMER LIMIT ORDERS IN NASDAQ SECURITIES IN ITS PUBLICQUOTATION WHEN EACH SUCH ORDER WAS AT A PRICE THAT WOULDHAVE IMPROVED THE FIRM'S BID OR OFFER IN EACH SUCH SECURITY; ORWHEN THE ORDER WAS PRICED EQUAL TO THE FIRM'S BID OR OFFER ANDTHE NATIONAL BEST BID OR OFFER FOR EACH SUCH SECURITY, AND THESIZE OF THE ORDER REPRESENTED MORE THAN A DE MINIMIS CHANGE INRELATION TO THE SIZE ASSOCIATED WITH THE FIRM'S BID OR OFFER INEACH SUCH SECURITY;WITHOUT MAKING REASONABLE EFFORTS TOAVOID A LOCKED OR CROSSED MARKET BY EXECUTING TRANSACTIONSWITH ALL MARKET PARTICIPANTS WHOSE QUOTATIONS WOULD BELOCKED OR CROSSED, ENTERED A BID OR ASK QUOTATION IN THENASDAW STOCK MARKET, INC. IN SECURITIES FOR WHICH IT WAS AMARKET MAKER THAT CAUSED A LOCKED OR CROSSED MARKETCONDITION TO OCCUR IN EACH INSTANCE; IN INSTANCES IN WHICH THEFIRM LOCKED/CROSSED THE MARKET DURING THE PRE-OPENINGMARKET PERIOD IN NASDAQ SECURITIES FOR WHICH IT WAS A MARKETMAKER AND FAILED IMMEDIATELY THEREAFTER TO SEND A TRADE-OR-MOVE MESSAGE THROUGH SELECTNET TO THE MARKET PARTICIPANTWHOSE QUOTE IT LOCKED OR CROSSED THAT WAS PRICED AT THERECEIVING MARKET PARTICIPANT'S QUOTED PRICE AND/OR FAILED TOSEND A TRADE-OR-MOVE MESSAGE THROUGH SELECTNET WITH ANAGGREGATE SIZE OF AT LEAST 5,000 SHARES TO ALL MARKETPARTICIPANTS WHOSE QUOTES IT LOCKED/CROSSED; [CONTINUED INITEM #13]


Resolution:


Sanction Details: CENSURED AND FINED $112,500

Regulator Statement INSTANCES IN WHICH IT WAS A PARTY TO A LOCKED OR CROSSEDMARKET CONDITION IN NASDAQ SECURITIES FOR HWICH IT WAS AMARKET MAKER PRIOR TO THE MARKET OPENING AND RECEIVED ATRADE-OR MOVE MESSAGE IN EACH INSTANCE THROUGH SELECTNET,WITHIN 30 SECONDS OF RCEIVING EACH MESSAGE, FAILED TO FILL THEINCOMING TRADE-OR MOVE MESSAGE FOR THE FULL SIZE OF THEMESSAGE OR TO MOVE ITS BID DOWN (OFFER UP) BY A QUOTATIONINCREMENT THAT WOULD HAVE UNLOCKED/UNCROSSED THEMARKET;FAILED TO EXECUTE ORDERS UPON PRESENTMENT WHENPRESENTED WITH ORDERS AT THE FIRM'S PUBLISHED BID OR OFFER INAN AMOUNT UP TO ITS PUBLISHED QUOTATION SIZE, THEREBY FAILING TOHONOR ITS PUBLISHED QUOTATION.




Allegations: NASDR ALLEGES THAT IN 2000, UBSW INCORRECTLY DESIGNATEDSEVERAL TRANSACTIONS AS "PRP" IN ACT WHEN THE EXECUTION PRICEWAS NOT BASED ON A PRIOR REFERENCE POINT IN TIME, VIOLATINGNASD RULES 4632(A)(9) AND 6620 (A)(6). DURING 2000 AND 2001, UBSWFAILED TO DISPLAY MULTIPLE CUSTOMER LIMIT ORDERS AS REQUIREDUNDER SEC RULE 11AC1-4. FROM 1999 - 2001, WITHOUT MAKINGREASONABLE EFFORTS TO AVOID A LOCKED OR CROSSED MARKET BYEXECUTING TRANSACTIONS WITH ALL MARKET PARTICIPANTS WHOSEQUOTATIONS WOULD BE LOCKED OR CROSSED, UBSW ENTEREDMULTIPLE BID OR ASK QUOTATIONS IN NASDAQ SECURITIES THATCAUSED A LOCKED OR CROSSED MARKET CONDITION TO OCCUR,VIOLATING NASD RULE 4613(E). IN 2000 - 2001, ON MULTIPLE OCCASIONSUBSW FAILED TO SEND TRADE-OR-MOVE MESSAGES THROUGHSELECTNET TO THE MARKET PARTICIPANT WHOSE QUOTE IT LOCKED ORCROSSED OR FAILED TO RESPOND TO SUCH A MESSAGE VIOLATING NASDRULE 4613(E)(1)(C). IN 2000- 2001 MULTIPLE ORDERS WERE PRESENTEDTO UBSW AT THE FIRM'S PUBLISHED BID OR PUBLISHED OFFER IN ANAMOUNT UP TO ITS PUBLISHED QUOTATION SIZE AND UBSW FAILED TOEXECUTE MULTIPLE ORDERS UPON PRESENTMENT VIOLATING OF SECRULE 11AC1-1.









Other


LETTER OF ACCEPTANCE, WAIVER AND CONSENT





Allegations: NASDR ALLEGES THAT IN 2000, UBSW INCORRECTLY DESIGNATEDSEVERAL TRANSACTIONS AS "PRP" IN ACT WHEN THE EXECUTION PRICEWAS NOT BASED ON A PRIOR REFERENCE POINT IN TIME, VIOLATINGNASD RULES 4632(A)(9) AND 6620 (A)(6). DURING 2000 AND 2001, UBSWFAILED TO DISPLAY MULTIPLE CUSTOMER LIMIT ORDERS AS REQUIREDUNDER SEC RULE 11AC1-4. FROM 1999 - 2001, WITHOUT MAKINGREASONABLE EFFORTS TO AVOID A LOCKED OR CROSSED MARKET BYEXECUTING TRANSACTIONS WITH ALL MARKET PARTICIPANTS WHOSEQUOTATIONS WOULD BE LOCKED OR CROSSED, UBSW ENTEREDMULTIPLE BID OR ASK QUOTATIONS IN NASDAQ SECURITIES THATCAUSED A LOCKED OR CROSSED MARKET CONDITION TO OCCUR,VIOLATING NASD RULE 4613(E). IN 2000 - 2001, ON MULTIPLE OCCASIONSUBSW FAILED TO SEND TRADE-OR-MOVE MESSAGES THROUGHSELECTNET TO THE MARKET PARTICIPANT WHOSE QUOTE IT LOCKED ORCROSSED OR FAILED TO RESPOND TO SUCH A MESSAGE VIOLATING NASDRULE 4613(E)(1)(C). IN 2000- 2001 MULTIPLE ORDERS WERE PRESENTEDTO UBSW AT THE FIRM'S PUBLISHED BID OR PUBLISHED OFFER IN ANAMOUNT UP TO ITS PUBLISHED QUOTATION SIZE AND UBSW FAILED TOEXECUTE MULTIPLE ORDERS UPON PRESENTMENT VIOLATING OF SECRULE 11AC1-1.


Resolution:


Sanction Details: A CENSURE AND A FINE OF $112,500 ($2,500 FOR TRADE REPORTINGVIOLATIONS; $40,000 FOR LIMIT ORDER DISPLAY VIOLATIONS; $60,000 FORVIOLATIONS OF LOCKED/CROSSED MARKET RULES; $10,000 FOR FIRMQUOTE VIOLATIONS).

Firm Statement ON APRIL 18, 2002 A LETTER OF ACCEPTANCE, WAIVER AND CONSENTWAS ACCEPTED BY NASD REGULATION, INC.'S OFFICE OF DISCIPLINARYAFFAIRS AND THE NATIONAL ADJUDICATORY COUNCIL. PAYMENT WILL BEMADE IMMEDIATLY UPON RECIPT OF INVOICE FROM THE NASD.








Firm Statement ON APRIL 18, 2002 A LETTER OF ACCEPTANCE, WAIVER AND CONSENTWAS ACCEPTED BY NASD REGULATION, INC.'S OFFICE OF DISCIPLINARYAFFAIRS AND THE NATIONAL ADJUDICATORY COUNCIL. PAYMENT WILL BEMADE IMMEDIATLY UPON RECIPT OF INVOICE FROM THE NASD.


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Docket/Case Number: 01-FIN-46



Allegations: ALLEGED VIOLATION OF CBOT RULE 285.05 THAT UBSW FAILED TO GIVEIMMEDIATE NOTICE TO THE EXCHANGE THAT IT HAD FAILED TO MAINTAINSUFFICIENT FUNDS IN SEGREGATION FOR ONE BUSINESS DAY, AND DIDNOT PROVIDE SUCH NOTICE UNTIL FIVE BUSINESS DAYS AFTER THEOCCURENCE.



Resolution:


Sanction Details: ON DECEMBER 24, 2001 UBSW SETTED WITH THE CBOT WITHOUTADMITTING OR DENYING ANY VIOLATION OF CBOT RULES AND PAID AMONETARY FINE OF $3,000 ON DECEMBER 27, 2001.


Settled


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Allegations: SEC RULE 11AC1-4 - FAILED TO DISPLAY IMMEDIATELY CUSTOMER LIMITORDERS IN NASDAQ SECURITIES IN ITS PUBLIC QUOTATION, WHEN EACHSUCH ORDER WAS AT A PRICE THAT WOULD HAVE IMPROVED THE FIRM'SBID OR OFFER FOR EACH SUCH SECURITY, OR WHEN THE ORDER WASPRICED EQUAL TO THE FIRM?S BID OR OFFER AND THE NATIONAL BESTBID OR OFFER FOR EACH SUCH SECURITY, AND THE SIZE OF THE ORDERREPRESENTED MORE THAN A DE MINIMIS CHANGE IN RELATION TO THESIZE ASSOCIATED WITH THE FIRM'S BID OR OFFER IN EACH SUCHSECURITY.







Initiated By: NATIONAL ASSOCIATION OF SECURITIES DEALES







Allegations: SEC RULE 11AC1-4 - FAILED TO DISPLAY IMMEDIATELY CUSTOMER LIMITORDERS IN NASDAQ SECURITIES IN ITS PUBLIC QUOTATION, WHEN EACHSUCH ORDER WAS AT A PRICE THAT WOULD HAVE IMPROVED THE FIRM'SBID OR OFFER FOR EACH SUCH SECURITY, OR WHEN THE ORDER WASPRICED EQUAL TO THE FIRM?S BID OR OFFER AND THE NATIONAL BESTBID OR OFFER FOR EACH SUCH SECURITY, AND THE SIZE OF THE ORDERREPRESENTED MORE THAN A DE MINIMIS CHANGE IN RELATION TO THESIZE ASSOCIATED WITH THE FIRM'S BID OR OFFER IN EACH SUCHSECURITY.


Resolution:


Sanction Details: CENSURED AND FINED $7,500.









Allegations: ON AUGUST 13, 1999 THE FIRM FAILED TO DISPLAY IMMEDIATELY EIGHTCUSTOMER LIMIT ORDERS IN NASDAQSECURITIES IN ITS PUBLIC QUOTATION.








Other


NASD LETTER OF ACCEPTANCE, WAIVER AND CONSENT



Resolution:


Sanction Details: ON JUNE 14, 2001 A LETTER OF ACCEPTANCE, WAIVER AND CONSENT WASACCEPTED BY NASD REGULATION, INC.'SOFFICE OF DISCIPLINARY AFFAIRS AND THE NATIONAL ADJUDICATORYCOUNCIL.PAYMENT WILL BE MADE IMMEDIATLY UPON RECIPT OF INVOICE FROMTHE NASD.




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Initiated By: NYSE DIVISION OF ENFORCEMENT







Allegations: **06/03/2000** STIPULATION EXECUTED UBS AGREED TO A FINDING THATTHEY VIOLATED EXCHANGE RULE 435(5) WHEN, ON ONE OR MOREOCCASIONS, THEY PERMITTED AND/OR FAILED TO PREVENT ONE OF ITSANALYSTS FROM CIRCULATING A RUMOR REGARDING AN EXCHANGELISTED SECURITY, WHICH WAS SENSATINAL IN CHARACTER, FOR WHICHHE LACKED A REASONABLE BASIS, AND WHICH MIGHT REASONABLY BEEXPECTED TO AFFECT MARKET CONDITIONS.








Resolution:


Sanction Details: **06/27/2000** HEARING PANEL DECISION ISSUED UBS WAS FOUND TOHAVE VIOLATED EXCHANGE RULE 435(5) WHEN, ON ONE OR MOREOCCASIONS, THE FIRM PERMITTED AND/OR FAILED TO PREVENT ONE OFITS ANALYSTS FROM CIRCULATING A RUMOR REGARDING AN EXCHANGELISTED SECURITY, WHICH WAS SENSATIONAL IN CHARACTER, FOR WHICHHE LACKED A REASONABLE BASIS, AND WHICH MIGHT REASONABLY BEEXPECTED TO AFFECT MARKET CONDITIONS. THE HEARING PANELIMPOSED THE PENALTY OF A CENSURE AND A $60,000 FINE.

Regulator Statement **06/30/2000** THE DECISION IS NOW FINAL AND IS EFFECTIVEIMMEDIATELY. CONTACT: PEGGY GERMINO (212) 656-8450.


Decision




Censure


MONETARY FINE OF $60,000.00


Docket/Case Number: HPD # 00-86



Allegations: IT WAS ALLEDGED THAT UBS WARBURG (F/K/A WARBURG DILLON READ)VIOLATED EXCHANGE RULE 435(5) WHEN, ON ONE OR MORE OCCASIONS,THE FIRM PERMITTED AND/OR FAILED TO PREVENT ONE OF IT'SANALYSTS FROM CIRCULATING A RUMOR REGARDING AN EXCHANGELISTED SECURITY, WHICH WAS SENSATIONAL IN CHARACTER, FOR WHICHHE LACKED A REASONABLE BASIS, AND WHICH MIGHT REASONABLY BEEXPECTED TO AFFECT MARKET CONDITIONS.



Resolution: Stipulation and Consent








Sanction Details: CONSENT TO CENSURE AND $60,000 FINE

Firm Statement THE STIPULATION OF FACTS AND CONSENT TO PENALTY WAS ACCEPTEDBY THE NEW YORK STOCK EXCHANGE HEARING PANEL ON MAY 25, 2000.



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Cease and Desist


Docket/Case Number: RELS. 33-7820; 34-42628; FILE #3-10174


Other Product Type(s): MUNICIPAL BONDS - "YIELD BURNING"

Allegations: THE SEC'S ORDERS ALLEGE AS FOLLOWS: FROM 1990 THROUGH 1994,EACH OF THE TEN BROKERAGE FIRMS CHARGED ISSUERS OF MUNICIPALREFUNDING BONDS EXCESSIVE, UNDISCLOSED MARKUPS ON TREASURYSECURITIES. THE FIRMS ALSO CERTIFIED THAT THE PRICES THEYCHARGED DID NOT EXCEED THE SECURITIES' FAIR MARKET VALUEUNDER THE FEDERAL TAX LAWS, EVEN THOUGH THEY KNEW OR SHOULDHAVE KNOWN THAT THEY WERE CHARGING PRICES ABOVE FAIR MARKETVALUE. THE FALSE REPRESENTATIONS BY THE FIRMS ABOUT THE FAIRMARKET VALUE OF THE SECURITIES WERE CRITICAL TO ESTABLISHINGTHE TAX-EXEMPT STATUS OF THE ASSOCIATED MUNICIPAL REFUNDINGBONDS. THAT TAX-EXEMPT STATUS WAS THE BONDS' ESSENTIALINVESTMENT FEATURE. IN SOME CASES, A BROKERAGE FIRM'SOVERCHARGING DIVERTED MONEY FROM THE U.S. TREASURY TO THEFIRM. IN THE REMAINING CASES, OVERCHARGING BY THE BROKERAGEFIRM TOOK MONEY AWAY FROM THE MUNICIPALITY BY REDUCING,DOLLAR FOR DOLLAR, THE SAVINGS THAT THE MUNICIPALITY RECEIVEDFROM THE REFUNDING. THEREFORE, EACH OF THE FIRMS VIOLATED THEFEDERAL SECURITIES LAWS BY SELLING SECURITIES TO MUNICIPALITIESAT INFLATED PRICES AND JEOPARDIZING THE TAX-EXEMPT STATUS OFTHE MUNICIPALITIES' REFUNDING BONDS.








Cease and Desist


(1) CENSURE AND (2) DISGORGEMENT


Resolution:


Sanction Details: (1) A CENSURE; (2) A CEASE AND DESIST ORDER PROHIBITING FROMFUTURE VIOLATIONS OF THE SECTIONS 17(A)(2) AND 17(A)(3) OF THESECURITIES ACT OF 1933; AND (3) DISGORGEMENT OF $6.68 MILLION ($6.3MILLION TO THE TREASURY AND $380,000 TO MUNICIPAL ISSUERS).

Regulator Statement +04/09/2000+ SEC NEWS DIGEST, ISSUE NO. 2000-65, DATED 04/06/2000,ENFORCEMENT PROCEEDINGS DISCLOSES: THE SEC TODAY BROUGHTAND SETTLED CIVIL ADMINISTRATIVE FRAUD CHARGES AGAINST TENWALL STREET AND REGIONAL BROKERAGE FIRMS FOR OVERCHARGINGMUNICIPALITIES FOR GOVERNMENT SECURITIES IN A PRACTICECOMMONLY KNOWN AS "YIELD BURNING." THE SETTLEMENTSANNOUNCED TODAY ARE PART OF A GLOBAL RESOLUTION OF ALL YIELDBURNING CLAIMS WITH A TOTAL OF SEVENTEEN BROKERAGE FIRMS BYTHE SEC, NASD REGULATION, INC., THE U.S. ATTORNEY FOR THESOUTHERN DISTRICT OF NEW YORK, AND THE DEPARTMENT OF THETREASURY. THIS GLOBAL RESOLUTION REQUIRES THE FIRMS TO PAY ATOTAL OF MORE THAN $139 MILLION. INCLUDING THE ACTIONSANNOUNCED TODAY, MORE THAN $172 MILLION WILL HAVE BEEN PAID BY21 FIRMS TO RESOLVE CHARGES OF YIELD BURNING AND RELATEDCLAIMS. YIELD BURNING INVOLVES OVERCHARGES BY BROKERAGEFIRMS ON TREASURY SECURITIES PURCHASED WITH PROCEEDS FROMTHE SALE OF MUNICIPAL BONDS. YIELD BURNING BY BROKERAGE FIRMSJEOPARDIZED THE TAX-EXEMPT STATUS OF INTEREST PAID TO HOLDERSOF THOSE BONDS. WITHOUT ADMITTING OR DENYING THE FINDINGS,EACH FIRM INCLUDING WARBURG DILLON READ LLCCONSENTED TO A CENSURE, A CEASE AND DESIST ORDER PROHIBITINGFUTURE VIOLATIONS, AND AGREED TO DISGORGE THE ILL-GOTTEN GAINSIT RECEIVED FROM THE OVERCHARGING. (RELS. 33-7820; 34-42628; FILENO. 3-10174).

Sanctions Ordered: CensureDisgorgement/RestitutionCease and Desist/Injunction

Consent









Censure


DISGORGEMENT


Docket/Case Number: RELS. 33-7820; 34-42628; FILE# 3-10174


Other Product Type(s): MUNICIPAL BONDS - "YIELD BURNING"

Allegations: THE SEC ALLEGED THAT FROM 1990 THROUGH 1994 DILLON READ N/K/AUBS WARBURG LLC VIOLATED SECTIONS 17(A)(2) AND 17(A)(3) OF THESECURITIES ACT OF 1933 BY SELLING SECURITIES TO MUNICIPALITIES ATINFLATED PRICES AND JEOPARDIZING THE TAX-EXEMPT STATUS OF THEMUNICIPALITIES' REFUNDING BONDS.



Resolution:


Sanction Details: (1)A CENSURE; (2) A CEASE AND DESIST ORDER PROHIBITING FUTUREVIOLATIONS OF SECTIONS 17(A)(2)AND 17(A)(3) OF THE SECURITIES ACTOF 1933; AND (3) DISGORGEMENT OF $6.68 MILLION (6.3 MILLON TO THETREASURY AND $380,000 TO MUNICIPAL ISSUERS).

Sanctions Ordered: CensureDisgorgement/RestitutionCease and Desist/Injunction

Consent


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Allegations: NASD REGULATION, INC. ("NASD") ALLEGED THAT WARBURG DILLON READLLC VIOLATED SEC RULE 11AC1-4, AND SEC RULE 10B-10. WITHOUTADMITTING OR DENYING THE ALLEGATIONS ON NOVEMBER 18, 1999,WARBURG DILLON READ LLC SUBMITTED TO NASD A LETTER OFACCEPTANCE, WAIVER AND CONSENT, ETR11-9800100 IN WHICH ITAGREED TO A CENSURE AND A $7,500 FINE (COMPOSED OF A $5,000 FINEFOR ALLEGED VIOLATION OF SEC RULE 11AC1-4 AND $2,500 FOR THEALLEGED VIOLATION OF SEC RULE 10B-10).









Censure



Docket/Case Number: ETR11-9800100


Other Product Type(s): NOT KNOWN

NASD REGULATION, INC. ("NASD") ALLEGED THAT WARBURG DILLON READLLC VIOLATED SEC RULE 11AC1-4, AND SEC RULE 10B-10. WITHOUTADMITTING OR DENYING THE ALLEGATIONS ON NOVEMBER 18, 1999,WARBURG DILLON READ LLC SUBMITTED TO NASD A LETTER OFACCEPTANCE, WAIVER AND CONSENT, ETR11-9800100 IN WHICH ITAGREED TO A CENSURE AND A $7,500 FINE (COMPOSED OF A $5,000 FINEFOR ALLEGED VIOLATION OF SEC RULE 11AC1-4 AND $2,500 FOR THEALLEGED VIOLATION OF SEC RULE 10B-10).


Resolution:

Other Sanctions Ordered: WARBURG DILLON READ LLC SUBMITTED TO NASD A LETTER OFACCEPTANCE, WAIVER AND CONSENT, ETR11-9800100 IN WHICH ITAGREED TO A CENSURE AND A $7,500 FINE (COMPOSED OF A $5,000 FINEFOR ALLEGED VIOLATION OF SEC RULE 11AC1-4 AND $2,500 FOR ALLEGEDVIOLATION OF SEC RULE 10B-10).

Sanction Details: WARBURG DILLON READ LLC SUBMITTED TO NASD A LETTER OFACCEPTANCE, WAIVER AND CONSENT, ETR11-9800100 IN WHICH ITAGREED TO A CENSURE AND A $7,500 FINE (COMPOSED OF A $5,000 FINEFOR ALLEGED VIOLTION OF SEC RULE 11AC1-4 AND $2,500 FOR ALLEGEDVIOLATIONS OF SEC RULE 10B-10).

Firm Statement THIS MATTER WAS ACCEPTED BY NASD REGULATION, INC. ONMARCH 27, 2000.




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Initiated By: BOARD OF TRADE CLEARING CORPORATION


Docket/Case Number: N/A

Allegations: FAILURE TO REPORT LONG POSITIONS IN TREASURY BOND ACCOUNT.













Resolution: Other


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Censure






Allegations: FAILURE TO ENTER DAILY TRADING VOLUME STATISTICS (INCLUDINGINSTANCES WHERE SUCH REPORTED VOLUME WOULD HAVE BEEN ZERO)WHERE DILLON READ & CO. INC. ("DILLON READ") WAS A MARKET MAKER.



Resolution:


Sanction Details: CENSURE

Firm Statement ON 4/28/86, 6/16/86, 9/5/86, DILLON READ AGREED TO PAY THE NASD ATOTAL OF $4,250 REPRESENTING FINES IMPOSED AS A RESULT OF DILLONREAD'S FAILURE ON SEVERAL OCCASIONS TO ENTER DAILY TRADINGVOLUME STATISTICS (INCLUDING INSTANCES WHERE SUCH REPORTEDVOLUME WOULD HAVE BEEN ZERO) WHERE DILLON READ WAS A MARKETMAKER. ON 5/8/87, DILLON READ AGREED TO AN ADDITIONAL $2,500 FINEAND A CENSURE FOR FAILURE TO ENTER DAILY TRADING VOLUMESTATISTICS. ON 4/14/92, DILLON READ AGREED TO AN ADDITIONAL $750.00FINE FAILURE TO ENTER DAILY TRADING VOLUME STATISTICS.

Sanctions Ordered: Censure

Settled






ON 4/28/86, 6/16/86, 9/5/86, DILLON READ AGREED TO PAY THE NASD ATOTAL OF $4,250 REPRESENTING FINES IMPOSED AS A RESULT OF DILLONREAD'S FAILURE ON SEVERAL OCCASIONS TO ENTER DAILY TRADINGVOLUME STATISTICS (INCLUDING INSTANCES WHERE SUCH REPORTEDVOLUME WOULD HAVE BEEN ZERO) WHERE DILLON READ WAS A MARKETMAKER. ON 5/8/87, DILLON READ AGREED TO AN ADDITIONAL $2,500 FINEAND A CENSURE FOR FAILURE TO ENTER DAILY TRADING VOLUMESTATISTICS. ON 4/14/92, DILLON READ AGREED TO AN ADDITIONAL $750.00FINE FAILURE TO ENTER DAILY TRADING VOLUME STATISTICS.


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Allegations: ALLEGED FAILURE TO SUBMIT ADVICE CANCEL TO THE CBOE. ON 07/16/97SBC WARBURG SUBMITTED AN "EXERCISE ADVISE" TO CBOE INDICATINGITS INTENT TO EXERCISE 225 OEZ JUL 790 CALL OPTION CONTRACTS AND118 OEX JUL 860 CALL OPTION CONTRACTS ON BEHALF OF ITSCUSTOMER ACCOUNT. SUBSUQUENTLY, SBC WARBURG INC. DID NOTEXERCISE ANY OF THOSE CONTRACTS IT SUBSEQUENTLY WITHOUTSUBMITTING AN "ADVICE CANCEL" TO THE CBOE.



Resolution:


Sanction Details: MONETARY FINE $2175.00

Firm Statement WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, SBC WARBURG INC.SUBMITTED AN OFFER OF SETTLEMENT TO THE CBOE AND PAID A $2715FINE.


Settled







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Allegations: THE NASD ALLEGED THAT ON JANUARY 22, 1996, DILLON READ ENTERED ABID ON THE NASDAQ SYSTEM THAT DID NOT COMPLY WITH THE PASSIVEMARKET REQUIREMENTS CONTAINED IN SEC RULE 10B-6A.



Resolution:


Sanction Details: MONETARY FINE $1000

Firm Statement ON 5/19/1998, DILLON READ PAID THE $1,000 FINE.




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Docket/Case Number: 95-FX-16

Allegations: SBC CAPITAL MARKETS INC. ("CMI") SUBMITTED A WRITTEN OFFER OFSETTLEMENT TO THE CBOT AND AGREED TO PAY A FINE OF $1,000. THISWAS ACCEPTED BY THE CBOT ON MAY 29, 1996.









Docket/Case Number: 95-FX-16




Resolution:

Firm Statement ON MARCH 26, 1996, THE FINANCIAL COMPLIANCE COMMITTEE OF THECHICAGO BOARD OF TRADE ("CBOT") ISSUED PRELIMINARY CHARGESAGAINST SBC CAPITAL MARKETS INC. ("CMI"), ALLEGING VIOLATIONS OFCERTAIN CBOT REGULATIONS. THE ALLEGED VIOLATION, WHICH AROSEAS A RESULT OF A CORPORATE MERGER, INVOLVED TIMELY NOTIFICATIONOF CHANGE IN BUSINESS ACTIVITY, RECORDING OF ASSETS, ANDMAINTENANCE AND LABELING OF ACCOUNTS AND AGREEMENTS.WITHOUT ADMITTING OR DENYING ANY ALLEGATION, CMI SUMBMITTED AWRITTEN OFFER OF SETTLEMENT TO THE CBOT ON MAY 22, 1996.

Settled


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Initiated By: NASD REGULATION,INC.







Allegations: THE NASD ALLEGED THAT ON MARCH 15, 1995, DILLON READ ENTEREDTWO BIDS IN THE SAME ISSUE THAT DID NOT COMPLY WITH THE PASSIVEMARKET MAKING REQUIREMENTS CONTAINED IN SEC RULE 10B-6A.








Resolution:



Firm Statement ON 4/10/96 DILLON READ PAID A FINE OF $1,000 TO THE NASD BASED ON AFINDING THAT DILLON READ ENTERED TWO BIDS IN THE SAME ISSUE ONTHE NASDAQ SYSTEM ON MARCH 15, 1995 (WHICH WERE PROMPTLYWITHDRAWN WITHOUT INCIDENT) THAT DID NOT COMPLY WITH THEPASSIVE MARKET MAKING REQUIRMENTS CONTAINED IN SEC RULE 10B-6A




i


Initiated By: AMERICAN STOCK EXCHANGE


Censure






Allegations: ALLEGED DEFICIENCIES IN SEVEN ORDER TICKETS.



Resolution:


Sanction Details: MONETARY FINE $10,000.00

Firm Statement THE EXCHANGE AND S. G. WARBURG & CO., INC. ENTERED INTO ASTIPULATION OF FACTS AND CONSENT TO PENALTY FOR THE PURPOSEOF SETTLING THIS PROCEEDING. APLICANT NEITHER ADMITTED NORDENIED ANY OF THE ALLEGATIONS AGAINST IT.








THE EXCHANGE AND S. G. WARBURG & CO., INC. ENTERED INTO ASTIPULATION OF FACTS AND CONSENT TO PENALTY FOR THE PURPOSEOF SETTLING THIS PROCEEDING. APLICANT NEITHER ADMITTED NORDENIED ANY OF THE ALLEGATIONS AGAINST IT.


i










Allegations: ALLEGED OVERSTATED NET CAPITAL COMPUTATION IN VIOLATION OFCBOE RULES 4.2 AND 15.1.



Resolution:


Sanction Details: LETTER OF CONSENT WAS ACCEPTED AND FINE IN THE AMOUNT OF$2,500 WAS PAID.


Consent


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Allegations: APPROPRIATE NOTICE WAS NOT GIVEN TO CBOE FOR THE EXERCISINGOF CERTAIN INDEX OPTIONS.












Resolution:

Firm Statement ON APRIL 26, 1985 A SUM OF $1,913.00 WAS PAID BY DILLON READ & CO.INC., TO THE CHICAGO BOARD OPTION EXCHANGE ("CBOE") TO RESOLVEA MATTER INVOLVING REGISTRANT'S EXERCISE OF CERTAIN INDEXOPTIONS CLEARING CORPORATION ("OCC") AND THE CBOE, A NOTICEWAS DELIVERED ONLY TO THE OCC.

Settled


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Allegations: VIOLATION OF OPTION EXPIRATION PROCEDURES. FAILURE TO HAVEPERSON AVAILABLE FOR 90 MINUTES AFTER FIRST RECONCILIATION OUT-TRADE DISTRIBUTION.



Resolution:

Other Sanctions Ordered: 1000.OO FINE


Other






Sanction Details: 1000.OO FINE


i










Allegations: THE NASD ALLEGED THAT ON SEVERAL OCCASIONS THE REGISTRANTFAILED TO DESIGNATE NASDAQ TRADES AS "LATE" WHEN REPORTINGTHEM.



Resolution:



Firm Statement DILLON, READ & CO., INC., PAID A $500 FINE TO THE NASD

Sanctions Ordered: Monetary/Fine $500.00



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Docket/Case Number: MS-710-AWC

Allegations: ACCEPTANCE, WAIVER AND CONSENT PROCEDURE TO ARTICLE II,SECTION 10(A) OF THE CODE OF PROCEDURE.








Other


SETTLED

Docket/Case Number: MS-710-AWC




Resolution:

Firm Statement FAILURE TO REPORT THE NASDAQ VOLUME IN SEVEN SECURITIES ONDECEMBER 24, 1987 (SIX WITH ZERO VOLUME)



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Initiated By: NEW YORK STOCK EXCHANGE ENFORCEMENT DIVISION


Censure



Docket/Case Number: HEARING PANEL DECISION 89-58



Allegations: VIOLATIONS OF SEC REG. 240.15C3-1, 240.15C3-39(E), 240.15C3-3(E)(3),240.15C3-3(G), 240.17A-3 AND EXCHANGE RULE 342(A) AND (B).



Resolution:




Decision






Firm Statement THE FOREGOING PROCEEDING INVOLVED SBCI SWISS BANK INVESTMENTBANKING INC. REFER TO #8 FOR THE VIOLATIONS. SBCI CONSENTED TOCONCURE FOR THESE VIOLATIONS AND A $150,000 FINE. SBCI MERGEDINTO THE APPLICANT IN JUNE 1998.


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Initiated By: CHICAGO BOARD OF OPTIONS EXCHANGE, INC.


Censure






Allegations: ALLEGED VIOLATION OF CHICAGO BOARD OF OPTIONS EXCHANGE RULE4.1 AND RULE 6.9(E).



Resolution:

Other Sanctions Ordered: AGREED TO PARTICIPATE IN AN EDUCATIONAL UNDERTAKING PURSUANTTO WHICH TRADERS IN EXCHANGE TRADED DERIVATIVES GROUP WILLATTEND AN EDUCATIONAL SESSION CONDUCTED BY THE EXCHANGECONCERNING THE PROVISIONS OF EXCHANGE RULE 6.9 - SOLICITATION.

Sanction Details: AGREED TO PARTICIPATE IN AN EDUCATIONAL UNDERTAKING PURSUANTTO WHICH TRADERS IN EXCHANGE TRADED DERIVATIVES GROUP WILLATTEND AN EDUCATIONAL SESSION CONDUCTED BY THE EXCHANGECONCERNING THE PROVISIONS OF EXCHANGE RULE 6.9 - SOLICITATION.

Firm Statement WITHOUT ADMITTING OR DENYING THE VIOLATIONS ALLEGED IN THESTATEMENT OF CHARGES, SBC WARBURG DILLON READ INC. (N/K/AWARBURG DILLON READ LLC) SUBMITTED AN OFFER OF SETTLEMENTAND CONSENTED TO A CENSURE AND FINE IN THE AMOUNT OF $10,000AND AGREED TO PARTICIPATE IN THE EDUCATIONAL SESSION DESCRIBEDABOVE.


Settled





www.finra.org/brokercheck User GuidanceWITHOUT ADMITTING OR DENYING THE VIOLATIONS ALLEGED IN THESTATEMENT OF CHARGES, SBC WARBURG DILLON READ INC. (N/K/AWARBURG DILLON READ LLC) SUBMITTED AN OFFER OF SETTLEMENTAND CONSENTED TO A CENSURE AND FINE IN THE AMOUNT OF $10,000AND AGREED TO PARTICIPATE IN THE EDUCATIONAL SESSION DESCRIBEDABOVE.


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Censure



Docket/Case Number: ETR10-9700262



Allegations: NASD REGULATION, INC. ALLEGED WARBURG DILLON READ LLC VIOLATEDNASD CONDUCT RULE 2110, IM-2110-2, 3110(A) AND 2320; SEC RULES11AC1-4, 10B-10, AND 17A-3.



Resolution:


Sanction Details: WARBURG DILLON READ LLC AGREED TO A CENSURE A $9,500 FINE, ANDRESTITUTION TO CUSTOMERS IN THE TOTAL AMOUNT OF $3,969.75




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Initiated By: FEDERAL RESERVE BOARD


Allegations: SEE ITEM 13 BELOW.








Other


ORDER OF ASSESSMENT OF CIVIL MONEY PENALTY


Docket/Case Number: 95-039-CMP-FB


Other Product Type(s): PRODUCT UNKNOWN


Resolution:


Sanction Details: ON MARCH 6, 1996, SWISS BANK CORPORATION CONFIRMED THAT IT PAIDPENALTY OF 3.5 MILLON IN RESPECT OF ALLEGED VIOLATIONS BY SBCCAPITAL MARKETS INC. ("CMI"), DURING A PORTION OF 1995, OF THE 10%REVENUE TEST APPLICABLE TO CMI AS THE SECTION 20 SUBISDIARY OFSBC. THE ALLEGED VIOLATIONS INVOLVED VARIOUS ISSUES REGARDINGTHE METHOD OF CALCULATING COMPLIANCE WITH THE 10% REVENUETEST. THE PAYMENT OF THE PENALTY DID NOT CONSTITUTE ANADMISSION BY SBC OF ANY ALLEGATION MADE OR IMPLIED BY THEFEDERAL RESERVE BOARD.


Settled


i


Allegations: REPORTED TRANSACTIONS IN OTC EQUITY SECURITIES TO ACT MORETHAN 90 SECONDS AFTER EXECUTION WITHOUT INCLUDING A ".SLD"MODIFIER; FAILED TO IDENTIFY AGGREGATED TRANSACTION REPORTS INNASDAQ NATIONAL MARKET (NNM) SECURITIES ON CORR ORDER TICKETSIN A MANNER DIRECTED BY THE NASD; FAILED TO IDENTIFY ANAGGREGATED TRANSACTION REPORT IN AN NNM SECURITY IN A MANNERDIRECTED BY THE NASD; INCORRECTLY IDENTIFIED ONE AGGREGATEDTRANSACTION REPORT IN A NNM SECURITY; FAILED TO REPORT TO ACTTHE CONTRA SIDE OF EXECUTING BROKER FOR TRANSACTIONS INELIGIBLE SECURITIES; INCORRECTLY REPORTED TRANSACTIONS IN OTCEQUITY SECURITIES AND A TRANSACTION IN A NNM SECURITY TO ACTWHEN IT DID NOT HAVE THE REPORTING OBLIGATION TO DO SO;REPORTED TO ACT THE INCORRECT PRICE IN ONE TRANSACTION IN ANNM SECURITY; EXECUTED TRANSACTIONS AND FAILED TO RECORD THEVOLUME FOR EACH TRANSACTION ON THE CORRESPONDINGBROKERAGE ORDER MEMORANDUM; EXECUTED TRANSACTIONS ANDFAILED TO RECORD THE TIME OF EXECUTION ON THE CORRESPONDINGBROKERAGE ORDER MEMORANDUM; FAILED TO RECORD THE CONTRAPARTY ON A BROKERAGE ORDER MEMORANDUM; FAILED TO RECORDTHAT CUSTOMER ORDERS WERE TO BE EXECUTED ON A "NOT HELD"BASIS ON THE CORRESPONDING BROKERAGE ORDER MEMORANDUM;FAILED TO ESTABLISH AND MAINTAIN ADEQUATE WRITTEN SUPERVISORYPROCEDURES REASONABLY DESIGNED TO ACHIEVE COMPLIANCE IN:TRADE REPORTING, LIMIT ORDER PROTECTION, BEST EXECUTION, SOESTRADING, SEC ORDER EXECUTION RULES, 21(A) REPORT ISSUES, ANNUALREVIEW/AUDITS, ACT REPORTING, AND COMPLIANCE WITH THE SHORTSALE RULES; FAILED TO IDENTIFY AGGREGATED TRANSACTION REPORTSON THE CORR BROKERAGE ORDER MEMORANDUM; EXECUTED SHORTSALE TRANSACTIONS AND FAILED TO REPORT TRANSACTIONS TO ACTWITH A SHORT SALE INDICATOR;FAILED TO ESTABLISH ADEQUATEWRITTEN SUPERVISORY PROCEDURES DESIGNED TO ACHIEVECOMPLIANCE FOR SHORT SALE RULES.[SEC RULES 17A-3(A)(6), 17A-4(B)(1); NASD RULES 2110,3010,3110,4632,6130,6620














REPORTED TRANSACTIONS IN OTC EQUITY SECURITIES TO ACT MORETHAN 90 SECONDS AFTER EXECUTION WITHOUT INCLUDING A ".SLD"MODIFIER; FAILED TO IDENTIFY AGGREGATED TRANSACTION REPORTS INNASDAQ NATIONAL MARKET (NNM) SECURITIES ON CORR ORDER TICKETSIN A MANNER DIRECTED BY THE NASD; FAILED TO IDENTIFY ANAGGREGATED TRANSACTION REPORT IN AN NNM SECURITY IN A MANNERDIRECTED BY THE NASD; INCORRECTLY IDENTIFIED ONE AGGREGATEDTRANSACTION REPORT IN A NNM SECURITY; FAILED TO REPORT TO ACTTHE CONTRA SIDE OF EXECUTING BROKER FOR TRANSACTIONS INELIGIBLE SECURITIES; INCORRECTLY REPORTED TRANSACTIONS IN OTCEQUITY SECURITIES AND A TRANSACTION IN A NNM SECURITY TO ACTWHEN IT DID NOT HAVE THE REPORTING OBLIGATION TO DO SO;REPORTED TO ACT THE INCORRECT PRICE IN ONE TRANSACTION IN ANNM SECURITY; EXECUTED TRANSACTIONS AND FAILED TO RECORD THEVOLUME FOR EACH TRANSACTION ON THE CORRESPONDINGBROKERAGE ORDER MEMORANDUM; EXECUTED TRANSACTIONS ANDFAILED TO RECORD THE TIME OF EXECUTION ON THE CORRESPONDINGBROKERAGE ORDER MEMORANDUM; FAILED TO RECORD THE CONTRAPARTY ON A BROKERAGE ORDER MEMORANDUM; FAILED TO RECORDTHAT CUSTOMER ORDERS WERE TO BE EXECUTED ON A "NOT HELD"BASIS ON THE CORRESPONDING BROKERAGE ORDER MEMORANDUM;FAILED TO ESTABLISH AND MAINTAIN ADEQUATE WRITTEN SUPERVISORYPROCEDURES REASONABLY DESIGNED TO ACHIEVE COMPLIANCE IN:TRADE REPORTING, LIMIT ORDER PROTECTION, BEST EXECUTION, SOESTRADING, SEC ORDER EXECUTION RULES, 21(A) REPORT ISSUES, ANNUALREVIEW/AUDITS, ACT REPORTING, AND COMPLIANCE WITH THE SHORTSALE RULES; FAILED TO IDENTIFY AGGREGATED TRANSACTION REPORTSON THE CORR BROKERAGE ORDER MEMORANDUM; EXECUTED SHORTSALE TRANSACTIONS AND FAILED TO REPORT TRANSACTIONS TO ACTWITH A SHORT SALE INDICATOR;FAILED TO ESTABLISH ADEQUATEWRITTEN SUPERVISORY PROCEDURES DESIGNED TO ACHIEVECOMPLIANCE FOR SHORT SALE RULES.[SEC RULES 17A-3(A)(6), 17A-4(B)(1); NASD RULES 2110,3010,3110,4632,6130,6620


Resolution:



No









Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, UBS SECURITIESCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS, THEREFORE, THE FIRM IS CENSURED AND FINED $17,500.




Censure



Docket/Case Number: CMS 990031AWC



Allegations: ALLEGED VIOLATIONS OF NASD MARKETPLACE RULES 6620(A), 4632(F),6130(D), 4632,(A); NASD CONDUCT RULES 2110, 3010, 3110(A), AND SECRULES 17A-3(A)(6) AND 17A-4(B)(1).



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS WARBURG DILLONREAD CONSENTED TO A CENSURE AND A $17,500 FINE (COMPOSED OF A$2,500 FINE FOR TRADE REPORTING VIOLATIONS, A $5,000 FINE FOR THEVIOLATIONS OF NASD MARKETPLACE RULE 6130, A $5,000 FINE FOR THEVIOLATIONS OF NASD CONDUCT RULE 3110(A) AND SEC RULES 17A-3(A)AND 17A-4(B)(1), AND A $5,000 FINE FOR THE VIOLATION OF NASDCONDUCT RULES 2110 AND 3010).

Firm Statement A CENSURE AND A $17,500 FINE (COMPOSED OF A $2,500 FINE FOR TRADEREPORTING VIOLATIONS, A $5,000 FINE FOR THE VIOLATIONS OF NASDMARKETPLACE RULE 6130, A $5,000 FINE FOR THE VIOLATIONS OF NASDCONDUCT RULE 3110(A) AND SEC RULES 17A-3(A) AND 17A-4(B)(1), AND A$5,000 FINE FOR THE VIOLATION OF NASD CONDUCT RULES 2110 AND3010).







www.finra.org/brokercheck User GuidanceA CENSURE AND A $17,500 FINE (COMPOSED OF A $2,500 FINE FOR TRADEREPORTING VIOLATIONS, A $5,000 FINE FOR THE VIOLATIONS OF NASDMARKETPLACE RULE 6130, A $5,000 FINE FOR THE VIOLATIONS OF NASDCONDUCT RULE 3110(A) AND SEC RULES 17A-3(A) AND 17A-4(B)(1), AND A$5,000 FINE FOR THE VIOLATION OF NASD CONDUCT RULES 2110 AND3010).


i




Censure


$8,000.00 FINE




Other Product Type(s): UNKNOWN TYPES OF SECURITIES

Allegations: RESPONDENT MEMBER: FAILED TO DESIGNATE AS LATE TO ACTTRANSACTIONS IN NASDAQ NATIONAL MARKET SECURITIES; REPORTEDTO ACT A TRANSACTION IN A NASDAQ NATIONAL MARKET SECURITY THATIT WAS NOT REQUIRED TO REPORT; FAILED TO SHOW THE CORRECTYEAR OF EXECUTION ON MEMORANDA OF BROKERAGE ORDERS; FAILEDTO PRESERVE FOR A PERIOD OF NOT LESS THAN THREE YEARS THEMEMORANDUM OF A BROKERAGE ORDER; FAILED TO PROVIDE, INTRANSACTIONS IN WHICH IT ACTED AS PRINCIPAL FOR ITS OWNACCOUNT, WRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMERS THECORRECT REPORTED TRADE PRICE; FAILED TO PROVIDE, INTRANSACTIONS IN WHICH IT ACTED AS PRINCIPAL FOR ITS OWNACCOUNT, WRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMERS THEREPORTED TRADE PRICE; FAILED TO ESTABLISH, MAINTAIN AND ENFORCEWRITTEN SUPERVISORY PROCEDURES REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH THE APPLICABLE SECURITIES LAWS ANDREGULATIONS REGARDING LIMIT ORDERS, TRADE REPORTING, RECORDKEEPING AND CUSTOMER CONFIRMATION DISCLOSURES. [NASD RULES2110, 3010, 3110, 4632(A); SEC RULES 10B-10(A)(2),17A-3(A)(6), 17A-4(B)(1)]



Resolution:


No








Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, UBS SECURITIESCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS, THEREFORE, THE FIRM IS CENSURED AND FINED $8,000.00.


No





Censure


FINE IN THE AMOUNT OF $8,000.


Docket/Case Number: CMS990089 AWC



Allegations: THE NASD ALLEGED THAT THE FIRM VIOLATED NASD MARKET PLACERULE 4632(A), NASD CONDUCT RULES 2110, 3010, 3110, SEC RULE 17A-3(A)(6), SEC 17A-4(B)(1) AND SEC RULE 10B-10(A)(2).



Resolution:


Sanction Details: THE FINE WAS PAID ON OR ABOUT JULY 23, 1999.

Firm Statement WITHOUT ADMITTING OR DENYING THE ALLEGED VIOLATIONS, ON JUNE24, 1998, WARBURG DILLON READ LLC SUBMITTED TO NASD REGULATION,INC. THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT (NO. CMS990089 AWC)








Firm Statement WITHOUT ADMITTING OR DENYING THE ALLEGED VIOLATIONS, ON JUNE24, 1998, WARBURG DILLON READ LLC SUBMITTED TO NASD REGULATION,INC. THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT (NO. CMS990089 AWC)


i





Allegations: RESPONDENT MEMBER: FAILED TO CONTEMPORANEOUSLY EXECUTEPORTIONS OF CUSTOMER LIMIT ORDERS TO SELL SHARES AFTER THEFIRM HAD SOLD SHARES IN THE SAME COMPANIES FOR THE FIRM'SMARKET MAKING ACCOUNT; FAILED TO CONTEMPORANEOUSLY EXECUTEPORTIONS OF CUSTOMER LIMIT ORDERS TO BUY SHARES AFTER THEFIRM HAD BOUGHT SHARES IN THE SAME COMPANY FOR THE FIRM'SMARKET MAKING ACCOUNT; FAILED TO DISPLAY IMMEDIATELY CUSTOMERLIMIT ORDERS, WHEN THE ORDERS WERE AT A PRICE THAT WOULD HAVEIMPROVED THE FIRM'S BID OR OFFER IN EACH SECURITY RELATED TOTHOSE ORDERS, OR WHEN THE ORDERS WERE PRICED EQUAL TO THEFIRM'S BID OR OFFER AND THE NATIONAL BEST BID OR OFFER AND THESIZE OF THE ORDERS REPRESENTED MORE THAN A DE MINIMUS AMOUNTIN RELATION TO THE SIZE ASSOCIATED WITH THE FIRM'S BID OR OFFER INEACH SECURITY; FAILED TO PROVIDE, IN CONNECTION WITHTRANSACTIONS WHERE THE FIRM ACTED AS PRINCIPAL, WRITTENNOTIFICATION TO ITS CUSTOMERS OF THE REPORTED TRADE PRICE OFTHE TRANSACTIONS; FAILED TO MAINTAIN A MEMORANDUM OF ABROKERAGE ORDER; FAILED TO SHOW THE TIME OF EXECUTION ON THEMEMORANDA OF BROKERAGE ORDERS; FAILED TO SHOW THE TIME OFENTRY OR THE TIME OF EXECUTION ON THE MEMORANDA OFBROKERAGE ORDERS; FAILED TO MAINTAIN THE MULTIPLE EXECUTIONTIMES AND QUANTITIES ON A MEMORANDUM OF A BROKERAGE ORDER;FAILED TO SHOW THE CORRECT TIME OF CANCELLATION ON THEMEMORANDA OF BROKERAGE ORDERS; FAILED TO USE REASONABLEDILIGENCE TO ASCERTAIN THE BEST INTER-DEALER MARKETS SO THATTHE RESULTANT PRICES TO CUSTOMERS WERE AS FAVORABLE ASPOSSIBLE UNDER PREVAILING MARKET CONDITIONS. (NASD RULES 2110,2320, 3110(A), IM-2110-2, SEC RULE 10B-10, 11AC1-4, 17A-3)










Other Product Type(s): SHARES OF SECURITIES


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, UBS SECURITIESCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS, THEREFORE, THE FIRM IS CENSURED, FINED $9,500, ANDORDERED TO PAY $3,968.75 IN RESTITUTION PLUS INTEREST.


No






Censure


Docket/Case Number: CMS990069 AWC

Principal Product Type: Unit Investment Trust(s)


Allegations: NASD REGULATION, INC. CONDUCTED A REVIEW OF UBS SECURITIES, INC.(N/K/A WARBURG DILLON READ LLC). THE NASD ALLEGED THAT THE FIRMVIOLATED NASD CONDUCT RULES 2110, 2320, 3110(A) AND IM-2110-2, SECRULE 11AC1-4, SEC RULE 10B-10 AND SEC RULE 17A-3.








Censure


FINE IN THE AMOUNT OF $9,500.


Resolution:

Other Sanctions Ordered: THE FIRM AGREED TO PAY RESTITUTION IN THE AMOUNT OF $3,968.75 TOTHOSE CUSTOMERS THAT DID NOT RECEIVE BEST EXECUTION.

Sanction Details: THE MONETARY/FINE WAS PAID ANDRESTITUTION WAS FORWARDED TO CUSTOMERS ON OR ABOUT 8/99.

Firm Statement WITHOUT ADMITTING OR DENYING THE ALLEGED VIOLATIONS, ON MAY 5,1999, WARBURG DILLON READ LLC SUBMITTED TO NASD REGULATION,INC. THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT (NO. CMS990069 AWC)




i


Initiated By: SECURITIES AND EXCHANGE COMMISSION




Docket/Case Number:



Allegations: COMMITTING OR CAUSING ANY VIOLATION OF, AND COMMITTING ORCAUSING ANY FUTURE VIOLATION OF SECTIONS 11A(C), 15(C)(1) AND (2),AND 17(A) OF THE EXCHANGE ACT, AND RULES 11AC1-1, 15C1-2, 15C2-7,AND 17A-3 THEREUNDER


Resolution: Order574©2022 FINRA. All rights reserved. Report about UBS SECURITIES LLC






Resolution:


Sanction Details: CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATION OF,AND COMMITTING OR CAUSING ANY FUTURE VIOLATION OF SECTIONS11A(C), 15(C)(1) AND (2), AND 17(A) OF THE EXCHANGE ACT, AND RULES11AC1-1, 15C1-2, 15C2-7, AND 17A-3 THEREUNDER; SHALL WITHIN 10BUSINESS DAYS OF THIS ORDER, PAY A CIVIL PENALTY IN THE AMOUNTOF $3,500,000; SHALL WITHIN 10 BUSINESS DAYS OF WRITTEN NOTICEFROM THE COMMISSION PAY DISGORGEMENT IN THE AMOUNT OF $64,416;AND, SHALL WITHIN 90 DAYS OF THE DATE OF ENTRY OF THIS ORDER,PROVIDE THE INDEPENDENT CONSULTANT APPOINTED BY THECOMMISSION IN CONNECTION WITH THESE PROCEEDINGS ADESCRIPTION OF ITS POLICIES, PROCEDURES AND PRACTICES RELATINGTO PREVENTION OR DETECTION OF THE TYPES OF IMPROPER CONDUCT INVOLVING UBSSECURITIES LLC (N/K/A WARBURG DILLON READ LLC) DESCRIBED INSECTION II OF THIS ORDER.

Regulator Statement [TOP]02/11/99 SEC NEWS DIGEST, ISSUE NO. 99-6, DATED JANUARY 11,1999, ENFORCEMENT PROCEEDINGS DISCLOSED; "COMMISSIONINSTITUTES SETTLED ADMINISTRATIVE PROCEEDINGS AGAINST 28NASDAQ MARKET MAKERS AND 51 INDIVIDUALS." THE COMMISSIONTODAY ANNOUNCED THE INSTITUTION OF ADMINISTRATIVE PROCEEDINGSAGAINST 28 NASDAQ MARKET MAKING FIRMS AND 51 INDIVIDUALSASSOCIATED WITH SUCH FIRMS PURSUANT TO SECTIONS 15(B) AND 21COF THE SECURITIES EXCHANGE ACT OF 1934 AND, AS TO ONE FIRM,PURSUANT TO SECTION 203(K) OF THE INVESTMENT ADVISERS ACT OF1940. (RELS. 34-40900 THROUGH 34-40930, INCLUSIVE;IA-1781; FILE NO. 3-9803); (PRESS REL. 99-2)*** 02/12/99GK: SEC ADMINISTRATIVEPROCEEDING FILE NO. 3-9803 ;1/11/99; PURSUANT TO THE ORDER MAKINGFINDINGS AND IMPOSING SANCTIONS: WARBURG DILLON READ LLCSHALL CEASE AND DESIST FROM COMMITTING OR CAUSING ANYVIOLATION OF, AND COMMITTING OR CAUSING ANY FUTURE VIOLATION OFSECTIONS 11A(C), 15(C)(1) AND (2), AND 17(A) OF THE EXCHANGE ACT, ANDRULES 11AC1-1, 15C1-2, 15C2-7, AND 17A-3 THEREUNDER; SHALL WITHIN 10BUSINESS DAYS OF THIS ORDER, PAY A CIVIL PENALTY IN THE AMOUNT OF$3,500,000; SHALL WITHIN 10 BUSINESS DAYS OF WRITTEN NOTICE FROMTHE COMMISSION PAY DISGORGEMENT IN THE AMOUNT OF $64,416; AND,SHALL WITHIN 90 DAYS OF THE DATE OF ENTRY OF THIS ORDER, PROVIDETHE INDEPENDENT CONSULTANT APPOINTED BY THE COMMISSION INCONNECTION WITH THESE PROCEEDINGS A DESCRIPTION OF ITSPOLICIES, PROCEDURES AND PRACTICES RELATING TO PREVENTION ORDETECTION OF THE TYPES OF IMPROPER CONDUCT INVOLVING UBSSECURITIES LLC (N/K/A WARBURG DILLON READ LLC) DESCRIBED INSECTION II OF THIS ORDER.


Order






[TOP]02/11/99 SEC NEWS DIGEST, ISSUE NO. 99-6, DATED JANUARY 11,1999, ENFORCEMENT PROCEEDINGS DISCLOSED; "COMMISSIONINSTITUTES SETTLED ADMINISTRATIVE PROCEEDINGS AGAINST 28NASDAQ MARKET MAKERS AND 51 INDIVIDUALS." THE COMMISSIONTODAY ANNOUNCED THE INSTITUTION OF ADMINISTRATIVE PROCEEDINGSAGAINST 28 NASDAQ MARKET MAKING FIRMS AND 51 INDIVIDUALSASSOCIATED WITH SUCH FIRMS PURSUANT TO SECTIONS 15(B) AND 21COF THE SECURITIES EXCHANGE ACT OF 1934 AND, AS TO ONE FIRM,PURSUANT TO SECTION 203(K) OF THE INVESTMENT ADVISERS ACT OF1940. (RELS. 34-40900 THROUGH 34-40930, INCLUSIVE;IA-1781; FILE NO. 3-9803); (PRESS REL. 99-2)*** 02/12/99GK: SEC ADMINISTRATIVEPROCEEDING FILE NO. 3-9803 ;1/11/99; PURSUANT TO THE ORDER MAKINGFINDINGS AND IMPOSING SANCTIONS: WARBURG DILLON READ LLCSHALL CEASE AND DESIST FROM COMMITTING OR CAUSING ANYVIOLATION OF, AND COMMITTING OR CAUSING ANY FUTURE VIOLATION OFSECTIONS 11A(C), 15(C)(1) AND (2), AND 17(A) OF THE EXCHANGE ACT, ANDRULES 11AC1-1, 15C1-2, 15C2-7, AND 17A-3 THEREUNDER; SHALL WITHIN 10BUSINESS DAYS OF THIS ORDER, PAY A CIVIL PENALTY IN THE AMOUNT OF$3,500,000; SHALL WITHIN 10 BUSINESS DAYS OF WRITTEN NOTICE FROMTHE COMMISSION PAY DISGORGEMENT IN THE AMOUNT OF $64,416; AND,SHALL WITHIN 90 DAYS OF THE DATE OF ENTRY OF THIS ORDER, PROVIDETHE INDEPENDENT CONSULTANT APPOINTED BY THE COMMISSION INCONNECTION WITH THESE PROCEEDINGS A DESCRIPTION OF ITSPOLICIES, PROCEDURES AND PRACTICES RELATING TO PREVENTION ORDETECTION OF THE TYPES OF IMPROPER CONDUCT INVOLVING UBSSECURITIES LLC (N/K/A WARBURG DILLON READ LLC) DESCRIBED INSECTION II OF THIS ORDER.




Disgorgement



Docket/Case Number: RELEASE #34-409000 & 34-40929



Allegations: IN AN ACTION BROUGHT AGAINST ALMOST ALL OF THE MAJOR NASDAQMARKET MAKERS, THE SEC ALLEGED THAT IN 1994 MARKET MAKERS,INCLUDING UBS SECURITIES INC. (N/K/A WARBURG DILLON READ LLC),VIOLATED PROVISIONS OF THE FEDERAL SECURITIES LAWS INCONNECTION WITH THEIR MARKET MAKING ACTIVITIES IN NASDAQSECURITIES. WITHOUT ADMITTING OR DENYING THE ALLEGATIONS,WARBURG DILLON READ LLC AGREED TO PAY A CIVIL PENALTY OF$3,500,000 AND DISGORGEMENT OF $64,416.00 TO SETTLE THE MATTER.IN ADDITION, IT AGREED TO A CEASE AND DESIST ORDER AND AGREED TOSUBMIT CERTAIN OF ITS POLICIES TO AN INDEPENDENT CONSULTANT.



Resolution:


Sanction Details: DISGORGEMENT OF $64,416.00


Settled







i






Docket/Case Number: CMS950019 (A)



Allegations: MARKET SURVEILLANCE COMMITTEE COMPLAINT NO. CMS950019(A)LETTER OF ACCEPTANCE, WAIVER AND CONSENT FILED MARCH 13, 1995AGAINST UBS SECURITIES INC. (UBSS) ALLEGING VIOLATION OF PART V,SECTION 2(B) OF SCHEDULE D TO THE ASSOCIATION'S BY-LAWS,ARTICLEIII, SECTIONS 1 AND 6 OF THE ASSOCIATION'S RULES OF FAIR PRACTICEAND RULE 11AC1-1(C) OF THE SECURITIES EXCHANGE ACT OF 1934 INTHAT RESPONDENT UBSS FAILED TO HONOR THE QUOTATIONS ITDISSEMINATED THROUGH THE NASDAQ SYSTEM WITH REGARDS TOBACKING AWAY.



Resolution:


Sanction Details: THE AWC WAS ACCEPTED BY THE NATIONAL BUSINESS CONDUCTCOMMITTEE ON AUGUST 15, 1995. RESPONDENT UBSS WAS FINED $1,000.THE AWC BECAME FINAL ON AUGUST 15, 1995.


No














Docket/Case Number: CMS950019(A) AWC



Allegations: ALLEGED VIOLATIONS OF RULE 11AC1(C) OF THE SECURITIES EXCHANGEACT OF 1934, PART V, SECTION 2(B) OF SCHEDULE D TO THE NASD'S BY-LAWS AND ARTICLE 111, SECTIONS 1 AND 6 OF THE NASD'S RULES OF FAIRPRACTICE.



Resolution:






i


Allegations: The Exchange instituted a formal disciplinaryproceeding against UBS Securities ("UBS"), an associate memberorganization of the Exchange. A Stipulation of Facts andConsent to Penalty was subsequently entered into between theExchange and UBS and was accepted by an Exchange DisciplinaryPanel at a hearing held on April 15, l993. UBS consented to afinding that it engaged in conduct inconsistent with just andequitable prinicples of trade, in violation of Article V,Section 4(h) of the Exchange Consitution, Article X, Section3(b) of the Exchange Consititution, and Article VI, Section 1of the OCC By-Laws in that it engaged in the improper use ofOptions Clearing Corporation ("OCC") adjustment process inAmerican Brands Inc. call options for its proprietary accounts.







Initiated By: AMEX




Docket/Case Number: 92-D-28

Principal Product Type:


The Exchange instituted a formal disciplinaryproceeding against UBS Securities ("UBS"), an associate memberorganization of the Exchange. A Stipulation of Facts andConsent to Penalty was subsequently entered into between theExchange and UBS and was accepted by an Exchange DisciplinaryPanel at a hearing held on April 15, l993. UBS consented to afinding that it engaged in conduct inconsistent with just andequitable prinicples of trade, in violation of Article V,Section 4(h) of the Exchange Consitution, Article X, Section3(b) of the Exchange Consititution, and Article VI, Section 1of the OCC By-Laws in that it engaged in the improper use ofOptions Clearing Corporation ("OCC") adjustment process inAmerican Brands Inc. call options for its proprietary accounts.


Resolution:


Sanction Details: UBS was fined $7,500.

Regulator Statement Not Provided


Consent


Initiated By: AMERICAN STOCK EXCHANGE



Docket/Case Number: 92-D-28



Allegations: ALLEGED VIOLATION OF ARTICLE V, SECTION 4(B) AND ARTICLE X,SECTION 3(B) OF THE AMEX CONSTITUTION, AND ARTICLE VI, SECTION 1OF THE OPTIONS CLEARING CORPORATION BY-LAWS. ALLEGEDIMPROPER USE OF THE OCC POSITION ADJUSTMENT PROCESS.










Resolution:




Decision


i


Initiated By: HEARING BOARD





Principal Product Type:


Allegations: VIOLATED RULE 352(b) BY REASON OF THEMISCONDUCT OF EMPLOYEES IN SELLING SECURITIES TO CUSTOMERSWITHAN UNDERSTANDING THAT THE SECURITIES WOULD BE BOUGHT BACKSHORTLY THEREAFTER WITHOUT A LOSS TO THE CUSTOMERS ANDENTERINGGUARANTEE ARRANGEMENTS WITH CUSTOMERS FOR THE PURPOSE TOCREATING THE APPEARANCE OF WIDE DISTRIBUTION.



Resolution:


Consent







Sanction Details: CONSENT TO CENSURE AND $25,000 FINE.

Regulator Statement SEE ALLEGATIONS.





Censure






Allegations: VIOLATION OF NYSE RULE 352(B) BY REASON OF THE CONDUCT OFSENIOR OFFICIALS AND OTHER EMPLOYEES IN THE INITIAL OFFERING OFAN ASSET BACKED SECURITY IN WHICH REPURCHASE COMMITTMENTSWERE ENTERED INTO AT PRE-ARRANGED PRICES WITH CERTAINPURCHASES OF THE OFFERING.



Resolution:










Civil - Final

This type of disclosure event involves (1) an injunction issued by a foreign or domestic court within the last 10 years inconnection with investment-related activity, (2) a finding by a court of a violation of any investment-related statute orregulation, or (3) an action dismissed by a court pursuant to a settlement agreement.

Disclosure 1 of 3


Initiated By: ATTORNEY GENERAL FOR THE STATE OF NEW YORK

Relief Sought: Cease and Desist

Other Relief Sought: DISGORGEMENT, CIVIL PENALTY, INJUNCTION, RESTITUTION

Date Court Action Filed: 07/28/2008


Other Product Types: AUCTION RATE SECURITIES

Court Details: NEW YORK COUNTY SUPREME COURT, INDEX NO. 650262/2008

THE NEW YORK ATTORNEY GENERAL ALLEGED THAT UBS SECURITIESLLC (UBSS) AND ITS AFFILIATE UBS FINANCIAL SERVICES, INC. (UBSFS)(COLLECTIVELY UBS) VIOLATED SECTION 63 (12) OF THE EXECUTIVE LAWAND ARTICLE 23-A OF THE GENERAL BUSINESS LAW IN CONNECTIONWITH THE MARKETING AND SALE OF ARS TO UBS'S CLIENTS AND TO UBS'SROLE AND PARTICIPATION IN ARS AUCTIONS AND SALES OF CERTAINPERSONAL HOLDINGS IN ARS BY CERTAIN UBS EMPLOYEES.

Allegations:


Resolution: Consent


Other Sanctions:

Sanction Details: UBS AGREED TO CEASE AND DESIST FROM ENGAGING IN ANY ACTS INVIOLATION OF THE MARTIN ACT, GENERAL BUSINESS LAW 349 AND/OREXECUTIVE LAW 63(12). UBS AGREED TO OFFER TO PURCHASE ARS,THAT WERE GENERALLY CONTINUING TO FAIL AT AUCTION, AT PAR VALUEPLUS ACCRUED INTEREST FROM CUSTOMERS WHO: (A) HELD ARS AT THEFIRM OR HAD BIDDING RIGHTS IN DELIVERY VS. PAYMENT ACCOUNTS ATTHE FIRM ON FEBRUARY 13, 2008; OR (B) PURCHASED ARS FROM UBSBETWEEN OCTOBER 1, 2007 AND FEBRUARY 12, 2008 AND TRANSFERREDTHEM TO ANOTHER FIRM.

Firm Statement THE NEW YORK ATTORNEY GENERAL'S COMPLAINT ALLEGED THAT UBSFINANCIAL SERVICES INC. (UBSFS) AND ITS AFFILIATE UBS SECURITIESLLC (UBSS)(COLLECTIVELY UBS) VIOLATED SECTION 63 (12) OF THEEXECUTIVE LAW AND ARTICLE 23-A OF THE GENERAL BUSINESS LAW INCONNECTION WITH THE MARKETING AND SALE OF ARS TO UBS'S CLIENTSAND TO UBS'S ROLE AND PARTICIPATION IN ARS AUCTIONS AND SALES OFCERTAIN PERSONAL HOLDINGS IN ARS BY CERTAIN UBS EMPLOYEES.WITHOUT ADMITTING OR DENYING THE ATTORNEY GENERAL'S FINDINGS,UBS AGREED TO CEASE AND DESIST FROM ENGAGING IN ANY ACTS INVIOLATION OF THE MARTIN ACT, GENERAL BUSINESS LAW 349 AND/OREXECUTIVE LAW 63(12). UBS AGREED TO OFFER TO PURCHASE ARS,THAT WERE GENERALLY CONTINUING TO FAIL AT AUCTION, AT PAR VALUEPLUS ACCRUED INTEREST FROM CUSTOMERS WHO: (A) HELD ARS AT THEFIRM OR HAD BIDDING RIGHTS IN DELIVERY VS. PAYMENT ACCOUNTS ATTHE FIRM ON FEBRUARY 13, 2008; OR (B) PURCHASED ARS FROM UBSBETWEEN OCTOBER 1, 2007 AND FEBRUARY 12, 2008 AND TRANSFERREDTHEM TO ANOTHER FIRM.

Monetary/Fine $75,000,000.00Disgorgement/RestitutionCease and Desist/Injunction

Sanctions Ordered or ReliefGranted:






Firm Statement THE NEW YORK ATTORNEY GENERAL'S COMPLAINT ALLEGED THAT UBSFINANCIAL SERVICES INC. (UBSFS) AND ITS AFFILIATE UBS SECURITIESLLC (UBSS)(COLLECTIVELY UBS) VIOLATED SECTION 63 (12) OF THEEXECUTIVE LAW AND ARTICLE 23-A OF THE GENERAL BUSINESS LAW INCONNECTION WITH THE MARKETING AND SALE OF ARS TO UBS'S CLIENTSAND TO UBS'S ROLE AND PARTICIPATION IN ARS AUCTIONS AND SALES OFCERTAIN PERSONAL HOLDINGS IN ARS BY CERTAIN UBS EMPLOYEES.WITHOUT ADMITTING OR DENYING THE ATTORNEY GENERAL'S FINDINGS,UBS AGREED TO CEASE AND DESIST FROM ENGAGING IN ANY ACTS INVIOLATION OF THE MARTIN ACT, GENERAL BUSINESS LAW 349 AND/OREXECUTIVE LAW 63(12). UBS AGREED TO OFFER TO PURCHASE ARS,THAT WERE GENERALLY CONTINUING TO FAIL AT AUCTION, AT PAR VALUEPLUS ACCRUED INTEREST FROM CUSTOMERS WHO: (A) HELD ARS AT THEFIRM OR HAD BIDDING RIGHTS IN DELIVERY VS. PAYMENT ACCOUNTS ATTHE FIRM ON FEBRUARY 13, 2008; OR (B) PURCHASED ARS FROM UBSBETWEEN OCTOBER 1, 2007 AND FEBRUARY 12, 2008 AND TRANSFERREDTHEM TO ANOTHER FIRM.

Disclosure 2 of 3

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SEC LITIGATION RELEASE 20824, DECEMBER 11, 2008: SECTION 15(C) OFTHE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") - THESECURITIES AND EXCHANGE COMMISSION ("COMMISSION") FINALIZED ASETTLEMENT WITH UBS SECURITIES LLC ("UBS") THAT WILL PROVIDENEARLY $22.7 BILLION TO TENS OF THOUSANDS OF CUSTOMERS WHOINVESTED IN AUCTION RATE SECURITIES ("ARS") BEFORE THE MARKETFOR THOSE SECURITIES FROZE IN FEBRUARY. THE SETTLEMENTRESOLVES THE COMMISSION'S CHARGES THAT UBS MISLED INVESTORSREGARDING THE LIQUIDITY RISKS ASSOCIATED WITH ARS THAT ITUNDERWROTE, MARKETED AND SOLD. ON AUGUST 8, 2008, THECOMMISSION'S DIVISION OF ENFORCEMENT ANNOUNCED A PRELIMINARYSETTLEMENT WITH UBS. ACCORDING TO THE COMMISSION'S COMPLAINT,UBS MISREPRESENTED TO CUSTOMERS THAT ARS WERE SAFE, HIGHLYLIQUID INVESTMENTS THAT WERE COMPARABLE TO MONEY MARKETS.ACCORDING TO THE COMPLAINT, IN LATE 2007 AND EARLY 2008, UBSKNEW THAT THE ARS MARKET WAS DETERIORATING, CAUSING THE FIRMTO HAVE TO PURCHASE ADDITIONAL INVENTORY TO PREVENT FAILEDAUCTIONS. AT THE SAME TIME, HOWEVER, UBS KNEW THAT ITS ABILITYTO SUPPORT AUCTIONS BY PURCHASING MORE ARS HAD BEEN REDUCEDAS THE CREDIT CRISIS STRESSED THE FIRM'S BALANCE SHEET. THECOMMISSION ALLEGED THAT UBS FAILED TO MAKE ITS CUSTOMERSAWARE OF THESE RISKS. IN MID-FEBRUARY 2008, ACCORDING TO THECOMPLAINT, UBS DECIDED TO STOP SUPPORTING THE ARS MARKET,LEAVING TENS OF THOUSANDS OF UBS CUSTOMERS HOLDING TENS OFBILLIONS OF DOLLARS IN ILLIQUID ARS. THE SETTLEMENT, WHICH ISSUBJECT TO COURT APPROVAL, WILL RESTORE APPROXIMATELY $22.7BILLION TO UBS CUSTOMERS WHO INVESTED IN ARS.

Allegations:








Relief Sought: Injunction

Other Relief Sought: CIVIL MONETARY PENALTIES



Other Product Types: AUCTION RATE SECURITIES ("ARS")

Court Details: UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEWYORK, CIVIL ACTION NO. 08 CIV 10754

SEC LITIGATION RELEASE 20824, DECEMBER 11, 2008: SECTION 15(C) OFTHE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") - THESECURITIES AND EXCHANGE COMMISSION ("COMMISSION") FINALIZED ASETTLEMENT WITH UBS SECURITIES LLC ("UBS") THAT WILL PROVIDENEARLY $22.7 BILLION TO TENS OF THOUSANDS OF CUSTOMERS WHOINVESTED IN AUCTION RATE SECURITIES ("ARS") BEFORE THE MARKETFOR THOSE SECURITIES FROZE IN FEBRUARY. THE SETTLEMENTRESOLVES THE COMMISSION'S CHARGES THAT UBS MISLED INVESTORSREGARDING THE LIQUIDITY RISKS ASSOCIATED WITH ARS THAT ITUNDERWROTE, MARKETED AND SOLD. ON AUGUST 8, 2008, THECOMMISSION'S DIVISION OF ENFORCEMENT ANNOUNCED A PRELIMINARYSETTLEMENT WITH UBS. ACCORDING TO THE COMMISSION'S COMPLAINT,UBS MISREPRESENTED TO CUSTOMERS THAT ARS WERE SAFE, HIGHLYLIQUID INVESTMENTS THAT WERE COMPARABLE TO MONEY MARKETS.ACCORDING TO THE COMPLAINT, IN LATE 2007 AND EARLY 2008, UBSKNEW THAT THE ARS MARKET WAS DETERIORATING, CAUSING THE FIRMTO HAVE TO PURCHASE ADDITIONAL INVENTORY TO PREVENT FAILEDAUCTIONS. AT THE SAME TIME, HOWEVER, UBS KNEW THAT ITS ABILITYTO SUPPORT AUCTIONS BY PURCHASING MORE ARS HAD BEEN REDUCEDAS THE CREDIT CRISIS STRESSED THE FIRM'S BALANCE SHEET. THECOMMISSION ALLEGED THAT UBS FAILED TO MAKE ITS CUSTOMERSAWARE OF THESE RISKS. IN MID-FEBRUARY 2008, ACCORDING TO THECOMPLAINT, UBS DECIDED TO STOP SUPPORTING THE ARS MARKET,LEAVING TENS OF THOUSANDS OF UBS CUSTOMERS HOLDING TENS OFBILLIONS OF DOLLARS IN ILLIQUID ARS. THE SETTLEMENT, WHICH ISSUBJECT TO COURT APPROVAL, WILL RESTORE APPROXIMATELY $22.7BILLION TO UBS CUSTOMERS WHO INVESTED IN ARS.

Resolution: Judgment Rendered


Other Sanctions: UNDERTAKINGS: UBS WILL OFFER TO PURCHASE AT PAR FROM ALLCURRENT OR FORMER UBS CUSTOMERS WHO HELD THEIR ARS AT UBSAS OF FEBRUARY 13, 2008, OR PURCHASED THEIR ARS AT UBS BETWEENOCTOBER 1, 2007 AND FEBRUARY 12, 2008, EVEN IF THEY MOVED THEIRACCOUNTS. DIFFERENT CATEGORIES OF CUSTOMERS WILL RECEIVEOFFERS FROM UBS AT DIFFERENT TIMES. UBS WILL NOT LIQUIDATE ITSOWN INVENTORY OF A PARTICULAR ARS WITHOUT MAKING THATLIQUIDITY OPPORTUNITY AVAILABLE, AS SOON AS PRACTICABLE, TOCUSTOMERS. UBS WILL PAY ELIGIBLE CUSTOMERS WHO SOLD THEIR ARSBELOW PAR THE DIFFERENCE BETWEEN PAR AND THE SALE PRICE OFTHE ARS. UBS WILL REIMBURSE CUSTOMERS FOR ANY EXCESSINTEREST COSTS INCURRED BY USING UBS'S ARS LOAN PROGRAMS.

Sanction Details: WITHOUT ADMITTING OR DENYING THE COMMISSION'S ALLEGATIONS, UBSAGREED TO BE PERMANENTLY ENJOINED FROM VIOLATIONS OF THEBROKER-DEALER FRAUD PROVISIONS AND TO COMPLY WITH A NUMBEROF UNDERTAKINGS. UBS WILL ALSO BE PERMANENTLY ENJOINED FROMVIOLATING THE PROVISIONS OF SECTION 15(C) OF THE EXCHANGE ACT,WHICH PROHIBIT THE USE OF MANIPULATIVE OR DECEPTIVE DEVICES BYBROKER-DEALERS. UBS ALSO FACES THE PROSPECT OF FINANCIALPENALTIES FROM THE COMMISSION BASED ON THE TRADITIONALFACTORS THE COMMISSION CONSIDERS FOR PENALTIES AND BASED ONWHETHER UBS HAS FULFILLED ITS OBLIGATIONS UNDER ITS SETTLEMENTAGREEMENT. ON DECEMBER 22, 2008, THE UNITED STATES DISTRICTCOURT FOR THE SOUTHERN DISTRICT OF NEW YORK PERMANENTLYENJOINED UBS FROM VIOLATING SECTION 15(C) OF THE EXCHANGE ACTAND THE COURT SHALL DETERMINE WHETHER A CIVIL PENALTY ISAPPROPRIATE AND THE AMOUNT. THE COURT FURTHER ORDERED THATUBS SHALL COMPLY WITH ALL OF THE UNDERTAKINGS AND AGREEMENTSAND THE COURT SHALL RETAIN JURISDICTION OF THIS MATTER FOR THEPURPOSES OF ENFORCING THE TERMS OF THE JUDGMENT.

SEC LITIGATION RELEASE 21658, SEPTEMBER 21, 2010: THE SECURITIESAND EXCHANGE COMMISSION ANNOUNCED THAT UBS SECURITIES LLCSATISFIED ITS OBLIGATIONS UNDER ITS ARS SETTLEMENT WITH THECOMMISSION, WHICH RETURNED MORE THAN $18 BILLION TO THE FIRM'SARS CUSTOMERS.

Cease and Desist/InjunctionSanctions Ordered or ReliefGranted:






WITHOUT ADMITTING OR DENYING THE COMMISSION'S ALLEGATIONS, UBSAGREED TO BE PERMANENTLY ENJOINED FROM VIOLATIONS OF THEBROKER-DEALER FRAUD PROVISIONS AND TO COMPLY WITH A NUMBEROF UNDERTAKINGS. UBS WILL ALSO BE PERMANENTLY ENJOINED FROMVIOLATING THE PROVISIONS OF SECTION 15(C) OF THE EXCHANGE ACT,WHICH PROHIBIT THE USE OF MANIPULATIVE OR DECEPTIVE DEVICES BYBROKER-DEALERS. UBS ALSO FACES THE PROSPECT OF FINANCIALPENALTIES FROM THE COMMISSION BASED ON THE TRADITIONALFACTORS THE COMMISSION CONSIDERS FOR PENALTIES AND BASED ONWHETHER UBS HAS FULFILLED ITS OBLIGATIONS UNDER ITS SETTLEMENTAGREEMENT. ON DECEMBER 22, 2008, THE UNITED STATES DISTRICTCOURT FOR THE SOUTHERN DISTRICT OF NEW YORK PERMANENTLYENJOINED UBS FROM VIOLATING SECTION 15(C) OF THE EXCHANGE ACTAND THE COURT SHALL DETERMINE WHETHER A CIVIL PENALTY ISAPPROPRIATE AND THE AMOUNT. THE COURT FURTHER ORDERED THATUBS SHALL COMPLY WITH ALL OF THE UNDERTAKINGS AND AGREEMENTSAND THE COURT SHALL RETAIN JURISDICTION OF THIS MATTER FOR THEPURPOSES OF ENFORCING THE TERMS OF THE JUDGMENT.

SEC LITIGATION RELEASE 21658, SEPTEMBER 21, 2010: THE SECURITIESAND EXCHANGE COMMISSION ANNOUNCED THAT UBS SECURITIES LLCSATISFIED ITS OBLIGATIONS UNDER ITS ARS SETTLEMENT WITH THECOMMISSION, WHICH RETURNED MORE THAN $18 BILLION TO THE FIRM'SARS CUSTOMERS.



Relief Sought: Other

Other Relief Sought:



Other Product Types: AUCTION RATE SECURITIES (ARS)

Court Details: UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEWYORK, CIVIL ACTION NO. 08 CIV 10754, FILED ON DECEMBER 11, 2008

THE SEC ALLEGED THAT UBS SECURITIES LLC VIOLATED SECTION 15(C)OF THE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT")RELATING TO ITS MARKETING AND SALE OF AUCTION RATE SECURITIES.UBS FINANCIAL SERVICES, INC., AN AFFILIATE OF UBS, WAS ALSO NAMEDIN THE COMPLAINT. (COLLECTIVELY "UBS").

Allegations:




Other Sanctions:

Sanction Details: UBS CONSENTED TO THE ENTRY OF A PERMANENT INJUNCTION AGAINSTVIOLATIONS OF SECTION 15(C) OF THE EXCHANGE ACT. UBS ALSOAGREED TO CERTAIN UNDERTAKINGS, INCLUDING OFFERINGTO PURCHASE ARS THAT WERE GENERALLY CONTINUING TO FAIL AT PARVALUE PLUS ACCRUED INTEREST FROM CUSTOMERS WHO: (A) HELD ARSAT THE FIRM OR HAD BIDDING RIGHTS IN DELIVERY VS. PAYMENTACCOUNT AT THE FIRM ON FEBRUARY 13, 2008; OR (B) PURCHASEDARS FROM UBS BETWEEN OCTOBER 1, 2007 AND FEBRUARY 12, 2008 ANDTRANSFERRED THEM TO ANOTHER FIRM. THE JUDGMENT AGAINST UBSALSO PROVIDES THAT THE SEC MAY PETITION THE COURT AT A LATERDATE TO DETERMINE WHETHER IT IS APPROPRIATE TO IMPOSE A CIVILPENALTY.

Cease and Desist/InjunctionSanctions Ordered or ReliefGranted:






Sanction Details: UBS CONSENTED TO THE ENTRY OF A PERMANENT INJUNCTION AGAINSTVIOLATIONS OF SECTION 15(C) OF THE EXCHANGE ACT. UBS ALSOAGREED TO CERTAIN UNDERTAKINGS, INCLUDING OFFERINGTO PURCHASE ARS THAT WERE GENERALLY CONTINUING TO FAIL AT PARVALUE PLUS ACCRUED INTEREST FROM CUSTOMERS WHO: (A) HELD ARSAT THE FIRM OR HAD BIDDING RIGHTS IN DELIVERY VS. PAYMENTACCOUNT AT THE FIRM ON FEBRUARY 13, 2008; OR (B) PURCHASEDARS FROM UBS BETWEEN OCTOBER 1, 2007 AND FEBRUARY 12, 2008 ANDTRANSFERRED THEM TO ANOTHER FIRM. THE JUDGMENT AGAINST UBSALSO PROVIDES THAT THE SEC MAY PETITION THE COURT AT A LATERDATE TO DETERMINE WHETHER IT IS APPROPRIATE TO IMPOSE A CIVILPENALTY.

Firm Statement THE SEC'S COMPLAINT ALLEGED THAT UBS FAILED TO DISCLOSE THERISKS AND OTHER MATERIAL INFORMATION ASSOCIATED WITH ARS. THESEC ALSO ALLEGED THAT A SMALL NUMBER OF UBS EMPLOYEES SOLDTHEIR PERSONAL ARS HOLDINGS BEFORE THE FIRM STOPPEDSUPPORTING THE MARKET. IN AUGUST 2008, UBS ENTERED INTO APRELIMINARY SETTLEMENT WITH THE SEC. IN DECEMBER 2008, A FINALJUDGMENT OF PERMANENT INJUNCTION AND OTHER RELIEF WASENTERED AGAINST UBS, WITHOUT ADMITTING OR DENYING THEALLEGATIONS. AS PART OF THE SETTLEMENT, UBS AGREED TO, AMONGOTHER THINGS, OFFER TO PURCHASE CERTAIN CUSTOMERS' ARS AT PARVALUE PLUS ACCRUED INTEREST OVER A PERIOD OF TIME.THIS SETTLEMENT WAS REACHED IN CONJUNCTION WITH SETTLEMENTSWITH OTHER REGULATORS, INCLUDING THE NEW YORK STATE ATTORNEYGENERAL, THE MASSACHUSETTS SECURITIES DIVISION, AND MEMBERSOF THE NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION.

Disclosure 3 of 3

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SEC LITIGATION RELEASE 18112, APRIL 28, 2003: THE SECURITIES ANDEXCHANGE COMMISSION ANNOUNCED THAT IT HAS SETTLED CHARGESAGAINST UBS WARBURG LLC, A CONNECTICUT-BASED BROKERAGE FIRMAND INVESTMENT BANK, ARISING FROM AN INVESTIGATION OF RESEARCHANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH NINE OTHER BROKERAGE FIRMS, ARE PART OF THEGLOBAL SETTLEMENT THE FIRMS HAVE REACHED WITH THECOMMISSION, NASD, INC., THE NEW YORK STOCK EXCHANGE, INC.("NYSE"), THE NEW YORK ATTORNEY GENERAL, AND OTHER STATEREGULATORS. IN CONNECTION WITH THIS MATTER, THE COMMISSIONTODAY FILED A COMPLAINT AGAINST UBS WARBURG IN THE U.S. DISTRICTCOURT FOR THE SOUTHERN DISTRICT OF NEW YORK, ALLEGINGVIOLATIONS OF THE FEDERAL SECURITIES LAWS AND NASD AND NYSERULES. ACCORDING TO THE COMMISSION'S COMPLAINT, FROM AT LEASTJULY 1999 THROUGH JUNE 2001, RESEARCH ANALYSTS AT THE FIRMWERE SUBJECT TO INAPPROPRIATE INFLUENCE BY INVESTMENTBANKING AT THE FIRM. THE COMPLAINT ALSO ALLEGES THAT UBSWARBURG PUBLISHED EXAGGERATED OR UNWARRANTED RESEARCH ORRESEARCH THAT LACKED A REASONABLE BASIS, RECEIVED PAYMENTSFROM OTHER FIRMS TO PUBLISH RESEARCH ON CERTAIN COMPANIESWITHOUT ENSURING THAT SUCH PAYMENTS WERE DISCLOSED, ANDMADE PAYMENTS TO OTHER FIRMS FOR THOSE FIRMS TO PUBLISHRESEARCH ON UBS WARBURG'S UNDERWRITING CLIENTS. THE FIRMALSO FAILED TO MAINTAIN APPROPRIATE SUPERVISION OVER ITSRESEARCH AND INVESTMENT BANKING OPERATIONS.

Allegations:








Relief Sought: Injunction

Other Relief Sought: DISGORGEMENT; CIVIL MONETARY PENALTY



Other Product Types: EQUITY SECURITIES

Court Details: UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEWYORK, CIVIL ACTION NO. 03 CV 2943 (WHP)

SEC LITIGATION RELEASE 18112, APRIL 28, 2003: THE SECURITIES ANDEXCHANGE COMMISSION ANNOUNCED THAT IT HAS SETTLED CHARGESAGAINST UBS WARBURG LLC, A CONNECTICUT-BASED BROKERAGE FIRMAND INVESTMENT BANK, ARISING FROM AN INVESTIGATION OF RESEARCHANALYST CONFLICTS OF INTEREST. THIS SETTLEMENT, ANDSETTLEMENTS WITH NINE OTHER BROKERAGE FIRMS, ARE PART OF THEGLOBAL SETTLEMENT THE FIRMS HAVE REACHED WITH THECOMMISSION, NASD, INC., THE NEW YORK STOCK EXCHANGE, INC.("NYSE"), THE NEW YORK ATTORNEY GENERAL, AND OTHER STATEREGULATORS. IN CONNECTION WITH THIS MATTER, THE COMMISSIONTODAY FILED A COMPLAINT AGAINST UBS WARBURG IN THE U.S. DISTRICTCOURT FOR THE SOUTHERN DISTRICT OF NEW YORK, ALLEGINGVIOLATIONS OF THE FEDERAL SECURITIES LAWS AND NASD AND NYSERULES. ACCORDING TO THE COMMISSION'S COMPLAINT, FROM AT LEASTJULY 1999 THROUGH JUNE 2001, RESEARCH ANALYSTS AT THE FIRMWERE SUBJECT TO INAPPROPRIATE INFLUENCE BY INVESTMENTBANKING AT THE FIRM. THE COMPLAINT ALSO ALLEGES THAT UBSWARBURG PUBLISHED EXAGGERATED OR UNWARRANTED RESEARCH ORRESEARCH THAT LACKED A REASONABLE BASIS, RECEIVED PAYMENTSFROM OTHER FIRMS TO PUBLISH RESEARCH ON CERTAIN COMPANIESWITHOUT ENSURING THAT SUCH PAYMENTS WERE DISCLOSED, ANDMADE PAYMENTS TO OTHER FIRMS FOR THOSE FIRMS TO PUBLISHRESEARCH ON UBS WARBURG'S UNDERWRITING CLIENTS. THE FIRMALSO FAILED TO MAINTAIN APPROPRIATE SUPERVISION OVER ITSRESEARCH AND INVESTMENT BANKING OPERATIONS.



Other Sanctions: $25,000,000 FOR THE PROCUREMENT OF INDEPENDENT RESEARCH,$5,000,000 FOR INVESTOR EDUCATION,UNDERTAKINGS

Sanction Details: SEC LITIGATION RELEASE 18438, OCTOBER 31, 2003: THE SECURITIES ANDEXCHANGE COMMISSION ANNOUNCED THAT THE UNITED STATESDISTRICT JUDGE FOR THE SOUTHERN DISTRICT OF NEW YORK, ISSUEDAN ORDER WHEREBY UBS WARBURG IS PERMANENTLY ENJOINED FROMVIOLATING SECTION 17(B) OF THE SECURITIES ACT OF 1933, NASD RULES2110, 2210,3010, NYSE RULES 342, 401, 472, 476, ORDERED TO PAY$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES; $25,000,000 TO BE USED FOR THEPROCUREMENT OF INDEPENDENT RESEARCH, $5,000,000 FOR INVESTOREDUCATION; AND REQUIRED TO COMPLY WITH THE FOLLOWINGUNDERTAKINGS: SEPARATION OF RESEARCH AND INVESTMENT BANKING,DISCLOSURE/TRANSPARENCY AND OTHER ISSUES, INDEPENDENT THIRD-PARTY RESEARCH.








SEC LITIGATION RELEASE 18438, OCTOBER 31, 2003: THE SECURITIES ANDEXCHANGE COMMISSION ANNOUNCED THAT THE UNITED STATESDISTRICT JUDGE FOR THE SOUTHERN DISTRICT OF NEW YORK, ISSUEDAN ORDER WHEREBY UBS WARBURG IS PERMANENTLY ENJOINED FROMVIOLATING SECTION 17(B) OF THE SECURITIES ACT OF 1933, NASD RULES2110, 2210,3010, NYSE RULES 342, 401, 472, 476, ORDERED TO PAY$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES; $25,000,000 TO BE USED FOR THEPROCUREMENT OF INDEPENDENT RESEARCH, $5,000,000 FOR INVESTOREDUCATION; AND REQUIRED TO COMPLY WITH THE FOLLOWINGUNDERTAKINGS: SEPARATION OF RESEARCH AND INVESTMENT BANKING,DISCLOSURE/TRANSPARENCY AND OTHER ISSUES, INDEPENDENT THIRD-PARTY RESEARCH.

Regulator Statement AS PART OF THE SETTLEMENT, UBS WARBURG HAS AGREED TO PAY $25MILLION AS DISGORGEMENT AND AN ADDITIONAL $25 MILLION INPENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION -WILL BE PAID IN CONNECTION WITH THE SEC ACTION AND RELATEDPROCEEDINGS BY THE NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CUSTOMERS OF THE FIRM.THE REMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. UBS WARBURG WILL PAY, OVER FIVE YEARS, $25MILLION TO PROVIDE THE FIRM'S CLIENTS WITH INDEPENDENTRESEARCH, AND $5 MILLION TO BE USED FOR INVESTOR EDUCATION. UBSWARBURG HAS AGREED TO SETTLE THE COMMISSION'S ACTION AND HASCONSENTED, WITHOUT ADMITTING OR DENYING THE ALLEGATIONS OFTHE COMPLAINT, TO THE ENTRY OF A FINAL JUDGMENT THAT, IFAPPROVED BY THE COURT, PERMANENTLY ENJOINS UBS WARBURGFROM VIOLATIONS OF SECTION 17(B) OF THE SECURITIES ACT OF 1933AND NASD AND NYSE RULES PERTAINING TO JUST AND EQUITABLEPRINCIPLES OF TRADE (NASD RULE 2110; NYSE RULES 401 AND 476),ADVERTISING (NASD RULE 2210; NYSE RULE 472), AND SUPERVISORYPROCEDURES (NASD RULE 3010; NYSE RULE 342). THE FINAL JUDGMENTALSO ORDERS THE FIRM TO MAKE THE PAYMENTS, AND PROVIDES FORTHE APPOINTMENT OF A FUND ADMINISTRATOR WHO, SUBJECT TO COURTAPPROVAL, WILL FORMULATE AND ADMINISTER A PLAN OF DISTRIBUTIONFOR THOSE MONIES PLACED INTO THE DISTRIBUTION FUND.

SEC LITIGATION RELEASE 21457, MARCH 19, 2010: THE HONORABLEJUDGE OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERNDISTRICT OF NEW YORK ISSUED AN ORDER ON MARCH 15, 2010APPROVING MODIFICATIONS TO THE FINAL JUDGMENTS ENTEREDAGAINST THE DEFENDANT AND OTHERS. THE FINAL JUDGMENTSCONTAINED AN EXTENSIVE ADDENDUM WITH PROVISIONS MANDATINGSTRUCTURAL AND OTHER REFORMS THAT ADDRESSED POTENTIALCONFLICTS OF INTEREST BETWEEN EQUITY RESEARCH ANALYSTS ANDINVESTMENT BANKING. THE SETTLEMENT PROVIDED THAT WITHRESPECT TO ANY PROVISION THAT HAD NOT BEEN EXPRESSLYSUPERSEDED BY SUBSEQUENT RULEMAKING WITHIN FIVE YEARS, THESEC WOULD AGREE TO AN AMENDMENT/MODIFICATION OF SUCH TERM,SUBJECT TO COURT APPROVAL, UNLESS THE SEC BELIEVES IT WOULDNOT BE IN THE PUBLIC INTEREST. THE COURT APPROVED REMOVING ANUMBER OF PROVISIONS. THE ADDENDUM NO LONGER INCLUDESPROHIBITIONS AGAINST INVESTMENT BANKING INPUT INTO RESEARCHANALYST COMPENSATION AND THE BAR AGAINST RESEARCH ANALYSTSPARTICIPATING IN EFFORTS TO SOLICIT INVESTMENT BANKING BUSINESS,AMONG OTHER THINGS. THE MODIFIED ADDENDUM AS ORDERED BY THECOURT AND SUPPORTED BY THE SEC MAINTAINED THE REQUIREMENTTHAT A CHAPERONE FROM LEGAL OR COMPLIANCE BE PRESENT WHENINVESTMENT BANKING SEEKS THE VIEWS OF RESEARCH ANALYSTSCONCERNING A PROPOSED TRANSACTION OR A POTENTIAL CANDIDATEFOR A TRANSACTION. ONE PROPOSED MODIFICATION WOULD HAVEALLOWED INVESTMENT BANKING TO SEEK THE VIEWS OF RESEARCHANALYSTS REGARDING MARKET OR INDUSTRY TRENDS, CONDITIONS, ORDEVELOPMENTS WITHOUT THE REQUIREMENT OF A CHAPERONE,SUBJECT TO CERTAIN LIMITATIONS INCLUDING THE IMPLEMENTATION OFCONTROLS AND TRAINING AS DESCRIBED IN THE NOVEMBER 30, 2009LETTER TO THE COURT FROM THE SETTLING FIRMS. IN HIS MARCH 15,2010 ORDER, THE HONORABLE JUDGE DID NOT APPROVE THISPROPOSED MODIFICATION. AS A RESULT OF THE COURT'S ORDER, THEDEFENDANT REMAINS SUBJECT TO A NUMBER OF IMPORTANTRESTRICTIONS THAT APPLY ONLY TO IT AND OTHER FIRMS AFFECTED BYTHE FINAL JUDGMENTS AND SETTLEMENT. TOGETHER WITH THE RESTOF THE INDUSTRY, THEY ALSO REMAIN SUBJECT TO ALL OF THEPROVISIONS OF NASD RULE 2711, NYSE RULE 472, AND THE SEC'SREGULATION AC THAT ADDRESS RESEARCH ANALYST CONFLICTS OFINTEREST.






AS PART OF THE SETTLEMENT, UBS WARBURG HAS AGREED TO PAY $25MILLION AS DISGORGEMENT AND AN ADDITIONAL $25 MILLION INPENALTIES. ONE-HALF OF THE TOTAL OF THESE PAYMENTS - $25 MILLION -WILL BE PAID IN CONNECTION WITH THE SEC ACTION AND RELATEDPROCEEDINGS BY THE NASD AND NYSE AND WILL BE PLACED INTO ADISTRIBUTION FUND FOR THE BENEFIT OF CUSTOMERS OF THE FIRM.THE REMAINDER WILL BE PAID TO RESOLVE RELATED PROCEEDINGS BYSTATE REGULATORS. UBS WARBURG WILL PAY, OVER FIVE YEARS, $25MILLION TO PROVIDE THE FIRM'S CLIENTS WITH INDEPENDENTRESEARCH, AND $5 MILLION TO BE USED FOR INVESTOR EDUCATION. UBSWARBURG HAS AGREED TO SETTLE THE COMMISSION'S ACTION AND HASCONSENTED, WITHOUT ADMITTING OR DENYING THE ALLEGATIONS OFTHE COMPLAINT, TO THE ENTRY OF A FINAL JUDGMENT THAT, IFAPPROVED BY THE COURT, PERMANENTLY ENJOINS UBS WARBURGFROM VIOLATIONS OF SECTION 17(B) OF THE SECURITIES ACT OF 1933AND NASD AND NYSE RULES PERTAINING TO JUST AND EQUITABLEPRINCIPLES OF TRADE (NASD RULE 2110; NYSE RULES 401 AND 476),ADVERTISING (NASD RULE 2210; NYSE RULE 472), AND SUPERVISORYPROCEDURES (NASD RULE 3010; NYSE RULE 342). THE FINAL JUDGMENTALSO ORDERS THE FIRM TO MAKE THE PAYMENTS, AND PROVIDES FORTHE APPOINTMENT OF A FUND ADMINISTRATOR WHO, SUBJECT TO COURTAPPROVAL, WILL FORMULATE AND ADMINISTER A PLAN OF DISTRIBUTIONFOR THOSE MONIES PLACED INTO THE DISTRIBUTION FUND.

SEC LITIGATION RELEASE 21457, MARCH 19, 2010: THE HONORABLEJUDGE OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERNDISTRICT OF NEW YORK ISSUED AN ORDER ON MARCH 15, 2010APPROVING MODIFICATIONS TO THE FINAL JUDGMENTS ENTEREDAGAINST THE DEFENDANT AND OTHERS. THE FINAL JUDGMENTSCONTAINED AN EXTENSIVE ADDENDUM WITH PROVISIONS MANDATINGSTRUCTURAL AND OTHER REFORMS THAT ADDRESSED POTENTIALCONFLICTS OF INTEREST BETWEEN EQUITY RESEARCH ANALYSTS ANDINVESTMENT BANKING. THE SETTLEMENT PROVIDED THAT WITHRESPECT TO ANY PROVISION THAT HAD NOT BEEN EXPRESSLYSUPERSEDED BY SUBSEQUENT RULEMAKING WITHIN FIVE YEARS, THESEC WOULD AGREE TO AN AMENDMENT/MODIFICATION OF SUCH TERM,SUBJECT TO COURT APPROVAL, UNLESS THE SEC BELIEVES IT WOULDNOT BE IN THE PUBLIC INTEREST. THE COURT APPROVED REMOVING ANUMBER OF PROVISIONS. THE ADDENDUM NO LONGER INCLUDESPROHIBITIONS AGAINST INVESTMENT BANKING INPUT INTO RESEARCHANALYST COMPENSATION AND THE BAR AGAINST RESEARCH ANALYSTSPARTICIPATING IN EFFORTS TO SOLICIT INVESTMENT BANKING BUSINESS,AMONG OTHER THINGS. THE MODIFIED ADDENDUM AS ORDERED BY THECOURT AND SUPPORTED BY THE SEC MAINTAINED THE REQUIREMENTTHAT A CHAPERONE FROM LEGAL OR COMPLIANCE BE PRESENT WHENINVESTMENT BANKING SEEKS THE VIEWS OF RESEARCH ANALYSTSCONCERNING A PROPOSED TRANSACTION OR A POTENTIAL CANDIDATEFOR A TRANSACTION. ONE PROPOSED MODIFICATION WOULD HAVEALLOWED INVESTMENT BANKING TO SEEK THE VIEWS OF RESEARCHANALYSTS REGARDING MARKET OR INDUSTRY TRENDS, CONDITIONS, ORDEVELOPMENTS WITHOUT THE REQUIREMENT OF A CHAPERONE,SUBJECT TO CERTAIN LIMITATIONS INCLUDING THE IMPLEMENTATION OFCONTROLS AND TRAINING AS DESCRIBED IN THE NOVEMBER 30, 2009LETTER TO THE COURT FROM THE SETTLING FIRMS. IN HIS MARCH 15,2010 ORDER, THE HONORABLE JUDGE DID NOT APPROVE THISPROPOSED MODIFICATION. AS A RESULT OF THE COURT'S ORDER, THEDEFENDANT REMAINS SUBJECT TO A NUMBER OF IMPORTANTRESTRICTIONS THAT APPLY ONLY TO IT AND OTHER FIRMS AFFECTED BYTHE FINAL JUDGMENTS AND SETTLEMENT. TOGETHER WITH THE RESTOF THE INDUSTRY, THEY ALSO REMAIN SUBJECT TO ALL OF THEPROVISIONS OF NASD RULE 2711, NYSE RULE 472, AND THE SEC'SREGULATION AC THAT ADDRESS RESEARCH ANALYST CONFLICTS OFINTEREST.



Relief Sought: Civil Penalty(ies)/Fine(s)

Other Relief Sought:



Other Product Types: RESEARCH

Court Details: 03-CV-2943 (S.D.N.Y.)

VIOLATIONS OF SECTION 17(B) OF THE SECURITIES ACT, NASD RULES2110, 2210(D)(1), 2210(D)(2) AND 3010 AND NYSE RULES 342, 401, 472 AND476 (A) (6).

Allegations:


Resolution: Settled









Other Sanctions:

Sanction Details: APPLICANT PERMANENTLY ENJOINED FROM VIOLATION OF SECTION 17(B)OF THE SECURITIES ACT OF 1933 AND VIOLATION OF NASD RULES 2110,2210, 3010 AND NYSE RULES 401, 472, 476(A)(6), AND 342. APPLICANTFURTHER ENJOINED FROM DESTRUCTION OF CERTAIN RECORDSRELATING TO THE PERIOD JULY 1, 1999THROUGH 2001 FOR FIVE YEARS FROM THE EFFECTIVE DATE OF THEFINAL JUDGMENT (MAY , 2003). IN ADDITION APPLICANT ORDERED TOCOMPLY WITH CERTAIN UNDERTAKINGS TO ADOPT ENHANCED POLICIESAND PROCEDURES REASONABLY DESIGNED TO ADDRESS POTENTIALCONFLICTS OF INTEREST ARISING FROM RESEARCHPRACTICES. APPLICANT MUST PAY A TOTAL OF $80,000,000 INCLUDING$25,000,000 AS A PENALTY; $25,000,000 AS DISGORGEMENT OFCOMMISSIONS AND OTHER MONIES, $25,000,000 TO BE USED FORPROCUREMENT OF INDEPENDENT RESEARCH AND $5,000,000 TO BE USEDFOR INVESTOR EDUCATION.

Firm Statement APPLICANT SETTLED WITH THE NASD CHARGES ARISING FROM ANINVESTIGATION OF RESEARCH ANALYST CONFLICTS OF INTEREST. THISSETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHER BROKERAGEFIRMS, ARE PART OF THE GLOBAL SETTLEMENT FIRMS HAVE REACHEDWITH THE SEC, NASD, NYSE, AND VARIOUS STATE REGULATORS. AS PARTOF THE SETTLEMENT, THE SEC FILED A COMPLAINT AGAINST THEAPPLICANT IN THE USDC FOR THE SDNY. THE COURT HAS NOT YETENTERED THE FINAL JUDGMENT BUT ITS TERMS HAVE BEEN AGREEDUPON. WITHOUT ADMITTING OR DENYING THE ALLEGATIONS OR FINDINGSIN THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT, THE APPLICANTCONSENTED TO FINDINGS THAT IT VIOLATED NASD CONDUCT RULE 2110BY ENGAGING IN ACTS AND PRACTICES THAT CREATED OR MAINTAINEDINAPPROPRIATE INFLUENCE BY THE INVESTMENT BANKING DEPT. OVERRESEARCH ANALYSTS, THEREFORE IMPOSING CONFLICTS OF INTERESTON ITS RESEARCH ANALYSTS, BY FAILING TO MANAGE THESE CONFLICTSIN AN ADEQUATE OR APPROPRIATE MANNER; VIOLATED NASD CONDUCTRULES 2110, 2210(D)(1)&(2) BY ISSUING RESEARCH REPORTS ONCOMPANIES THAT WERE NOT BASED ON PRINCIPLES OF FAIR DEALINGAND GOOD FAITH AND DID NOT PROVIDE A SOUND BASIS FOREVALUATING FACTS, CONTAINED EXAGGERATED OR UNWARRANTEDCLAIMS ABOUT THESE COMPANIES AND/OR CONTAINED OPINIONS FORWHICH THERE WAS NO REASONABLE BASIS; FAILED TO COMPLY WITHSEC. 17(B) OF THE SECURITIES ACT OF 1933 AND VIOLATED NASDCONDUCT RULES 2110 AND 2210(D)(1)(A) BY RECEIVING PAYMENTS FORRESEARCH ISSUED IN CONJUNCTION WITH AN UNDERWRITING WITHOUTDISCLOSING PAYMENT TO THE PUBLIC; BY MAKING PAYMENTS FORRESEARCH TO OTHER BROKER-DEALERS NOT INVOLVED IN ANUNDERWRITING TRANSACTION AND BY FAILING TO DISCLOSE OR CAUSETO BE DISCLOSED THE FACT OF SUCH PAYMENTS; VIOLATED NASDCONDUCT RULE 3010(A) BY FAILING TO ESTABLISH AND MAINTAINADEQUATE POLICIES, SYSTEMS AND PROCEDURES FOR SUPERVISIONAND CONTROL OF ITS RESEARCH AND INVESTMENT BANKINGDEPARTMENTS. THE APPLICANT CONSENTED TO CENSURE, A TOTALPAYMENT OF $80,000,000 AND AN UNDERTAKING.








APPLICANT SETTLED WITH THE NASD CHARGES ARISING FROM ANINVESTIGATION OF RESEARCH ANALYST CONFLICTS OF INTEREST. THISSETTLEMENT, AND SETTLEMENTS WITH CERTAIN OTHER BROKERAGEFIRMS, ARE PART OF THE GLOBAL SETTLEMENT FIRMS HAVE REACHEDWITH THE SEC, NASD, NYSE, AND VARIOUS STATE REGULATORS. AS PARTOF THE SETTLEMENT, THE SEC FILED A COMPLAINT AGAINST THEAPPLICANT IN THE USDC FOR THE SDNY. THE COURT HAS NOT YETENTERED THE FINAL JUDGMENT BUT ITS TERMS HAVE BEEN AGREEDUPON. WITHOUT ADMITTING OR DENYING THE ALLEGATIONS OR FINDINGSIN THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT, THE APPLICANTCONSENTED TO FINDINGS THAT IT VIOLATED NASD CONDUCT RULE 2110BY ENGAGING IN ACTS AND PRACTICES THAT CREATED OR MAINTAINEDINAPPROPRIATE INFLUENCE BY THE INVESTMENT BANKING DEPT. OVERRESEARCH ANALYSTS, THEREFORE IMPOSING CONFLICTS OF INTERESTON ITS RESEARCH ANALYSTS, BY FAILING TO MANAGE THESE CONFLICTSIN AN ADEQUATE OR APPROPRIATE MANNER; VIOLATED NASD CONDUCTRULES 2110, 2210(D)(1)&(2) BY ISSUING RESEARCH REPORTS ONCOMPANIES THAT WERE NOT BASED ON PRINCIPLES OF FAIR DEALINGAND GOOD FAITH AND DID NOT PROVIDE A SOUND BASIS FOREVALUATING FACTS, CONTAINED EXAGGERATED OR UNWARRANTEDCLAIMS ABOUT THESE COMPANIES AND/OR CONTAINED OPINIONS FORWHICH THERE WAS NO REASONABLE BASIS; FAILED TO COMPLY WITHSEC. 17(B) OF THE SECURITIES ACT OF 1933 AND VIOLATED NASDCONDUCT RULES 2110 AND 2210(D)(1)(A) BY RECEIVING PAYMENTS FORRESEARCH ISSUED IN CONJUNCTION WITH AN UNDERWRITING WITHOUTDISCLOSING PAYMENT TO THE PUBLIC; BY MAKING PAYMENTS FORRESEARCH TO OTHER BROKER-DEALERS NOT INVOLVED IN ANUNDERWRITING TRANSACTION AND BY FAILING TO DISCLOSE OR CAUSETO BE DISCLOSED THE FACT OF SUCH PAYMENTS; VIOLATED NASDCONDUCT RULE 3010(A) BY FAILING TO ESTABLISH AND MAINTAINADEQUATE POLICIES, SYSTEMS AND PROCEDURES FOR SUPERVISIONAND CONTROL OF ITS RESEARCH AND INVESTMENT BANKINGDEPARTMENTS. THE APPLICANT CONSENTED TO CENSURE, A TOTALPAYMENT OF $80,000,000 AND AN UNDERTAKING.






Arbitration Award - Award / Judgment

Brokerage firms are not required to report arbitration claims filed against them by customers; however, BrokerCheckprovides summary information regarding FINRA arbitration awards involving securities and commodities disputesbetween public customers and registered securities firms in this section of the report. The full text of arbitration awards issued by FINRA is available at www.finra.org/awardsonline.

Disclosure 1 of 3


Type of Event: ARBITRATION

Arbitration Forum:

Case Initiated:

Case Number:

Allegations:

Disputed Product Type:

Sum of All Relief Requested:

Disposition:

Disposition Date:

Sum of All Relief Awarded:

NASD

12/01/2000

00-05289

ACCOUNT RELATED-BREACH OF CONTRACT; ACCOUNT RELATED-ERRORS-CHARGES; ACCOUNT RELATED-FAILURE TO SUPERVISE;ACCOUNT RELATED-NEGLIGENCE

COMMON STOCK; NO OTHER TYPE OF SEC INVOLVE

$3,794,926.60

AWARD AGAINST PARTY

04/17/2002

$25,688.00

There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.

Disclosure 2 of 3

i



Arbitration Forum:

Case Initiated:

Case Number:

Allegations:


NASD

09/24/2001

01-04925

ACCOUNT RELATED-BREACH OF CONTRACT; ACCOUNT RELATED-FAILURETO SUPERVISE; ACCOUNT RELATED-NEGLIGENCE; ACCOUNT RELATED-TRANSFER

COMMON STOCK; NO OTHER TYPE OF SEC INVOLVE592©2022 FINRA. All rights reserved. Report about UBS SECURITIES LLC




www.finra.org/awardsonline

https://www.finra.org/arbitration-mediation/arbitration-awards-online?search=00-05289





Disposition:

Disposition Date:


COMMON STOCK; NO OTHER TYPE OF SEC INVOLVE

$763,820.00

AWARD AGAINST PARTY

02/14/2003

$410,000.00


Disclosure 3 of 3

i



Arbitration Forum:

Case Initiated:

Case Number:

Allegations:



Disposition:

Disposition Date:


FINRA

06/03/2008

08-01361

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNTRELATED-BREACH OF CONTRACT

AUCTION RATE SECURITIES; NO OTHER TYPE OF SEC INVOLVE; OTHERTYPES OF SECURITIES

$214,485.00

AWARD AGAINST PARTY

02/03/2010

$244,298.77








End of Report

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