Reuters: Regulatory News: UBS Puerto Rico unit to pay $26.6 mln in SEC pact

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UBS Puerto Rico unit to pay $26.6 mln in SEC pact May 1st 2012, 19:56 Tue May 1, 2012 3:56pm EDT May 1 (Reuters) - A Puerto Rico-based unit of UBS AG agreed to pay $26.6 million to settle U.S. Securities and Exchange Commission charges that it defrauded customers by masking its control of the secondary market for 23 proprietary, closed-end mutual funds. UBS Financial Services Inc of Puerto Rico will pay a $14 million fine, $11.5 million of disgorged money and $1.1 million of interest, with the money going into a fund for harmed investors, the SEC said. The unit did not admit or deny wrongdoing in agreeing to settle. The SEC said it has also begun contested administrative proceedings against Miguel Ferrer, the unit's vice chairman and former chief executive; and Carlos Ortiz, its head of capital markets. "UBS Puerto Rico denied its closed-end fund customers what they were entitled to under the law -- accurate price and liquidity information, and a trading desk that did not advantage UBS' trades over those of its customers," SEC enforcement chief Robert Khuzami said in a statement.

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