UBS, without admitting wrongdoing, has agreed to pay US regulators more than $15 million to settle charges that it failed to adequately educate and train its sales force about critical aspects of certain complex financial products that it had been selling to retail investors.

The private banking giant does admit the facts referred to in the Securities and Exchange Commission's order which institutes adminitrative proceedings in accordance with s15(b)(4) Securities and Exchange Act 1934.

Between 2011 and 2014 UBS failed to supervise its people properly in compliance with US federal securities laws. Its Capital Markets Structured Solutions desk did not see to it that its registered representatives were trained to sell single stock-linked reverse convertible notes so that they could adequately understand the risks and rewards of the product with a view to making suitable recommendations to HNW and other customers. Because of this, some of them made recommendations that were unsuitable for their customers' investment profiles. UBS sold approximately $548 million in RCNs to more than 8,700 relatively inexperienced retail customers.

The regulator's director of enforcement said, ominously: “We can now analyse literally hundreds of millions of trading records using sophisticated coding techniques that allow us to build platform wide cases rather than cases built investor by investor. We found that UBS dropped the ball.”