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U.S. Securities and Exchange Commission

UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

SECURITIES ACT OF 1933
Release No. 8378 / February 12, 2004

SECURITIES EXCHANGE ACT OF 1934
Release No. 49237 / February 12, 2004

ADMINISTRATIVE PROCEEDING
File No. 3-11407


In the Matter of

UBS FINANCIAL SERVICES INC.,

Respondent.



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ORDER UNDER SECTION 27(A)(b) OF THE SECURITIES ACT OF 1933 AND SECTION 21E(b) OF THE SECURITIES EXCHANGE ACT OF 1934, GRANTING WAIVERS OF THE DISQUALIFICATION PROVISIONS OF SECTION 27A(b)(1)(A)(ii) OF THE SECURITIES ACT OF 1933 AND SECTION 21E(b)(1)(A)(ii) OF THE SECURITIES EXCHANGE ACT OF 1934

UBS Financial Services Inc. ("UBS") has submitted a letter, dated January 7, 2004, for a waiver of the disqualification provisions of Section 27A(b)(1)(A)(ii) of the Securities Act of 1933 ("Securities Act") and Section 21E(b)(1)(A)(ii) of the Securities Exchange Act of 1934 ("Exchange Act") arising from its settlement of an administrative proceeding commenced by the Commission. On February 12, 2004, pursuant to the Offer of Settlement by UBS, the Commission issued an Order Instituting Administrative and Cease-and-Desist Proceedings, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order Pursuant to Section 8A of the Securities Act of 1933 and Sections 15(b)(4) and 21C of the Securities Exchange Act of 1934 (the "Order"). Under the Order, the Commission found that UBS willfully violated Section 17(a)(2) of the Securities Act and Rule 10b-10 of the Exchange Act.

The Order censures UBS and requires UBS (1) to cease and desist from committing or causing any violations and any future violations of Section 17(a)(2) of the Securities Act, and Rule 10b-10 under the Exchange Act; (2) within 10 days of the entry of this Order, to pay a civil money penalty in the amount of $2,310,884 to the United States Treasury; (3) to pay disgorgement and prejudgment interest, which obligation shall be satisfied by compliance with the customer refund program as set forth in the NASD's related order; and (4) not later than 6 months after the date of this order, unless otherwise extended by the staff of the Commission for good cause shown, have its chief executive officer certify in writing to the staff of the Commission that UBS has implemented procedures, and a system for applying such procedures, that can reasonably be expected to prevent and detect failures by UBS to provide appropriate breakpoint discounts for which customers are eligible on purchases of front-end load mutual funds, based on information reasonably ascertainable by UBS.

The safe harbor provisions of Section 27A(c) of the Securities Act and Section 21E(c) of the Exchange Act are not available for any forward looking statement that is "made with respect to the business or operations of an issuer, if the issuer . . . during the 3-year period preceding the date on which the statement was first made . . . has been made the subject of an . . . administrative decree or order arising out of a governmental action that (I) prohibits future violations of the antifraud provisions of the federal securities laws; (II) requires that the issuer cease and desist from violating the antifraud provisions of the securities laws; or (III) determines that the issuer violated the antifraud provisions of the securities laws[.]" Section 27A(b)(1)(A)(ii) of the Securities Act and Section 21E(b)(1)(A)(ii) of the Exchange Act. The disqualifications may be waived "to the extent otherwise specifically provided by rule, regulation, or order of the Commission." Section 27A(b) of the Securities Act and Section 21E(b) of the Exchange Act.

Based on the representations set forth in the request made by UBS, the Commission has determined that, under the circumstances, the request for a waiver of the disqualifications resulting from the entry of the Order is appropriate and should be granted.

Accordingly, IT IS ORDERED, pursuant to Section 27A(b) of the Securities Act and Section 27E(b) of the Exchange Act, that a waiver from the disqualification provisions of Section 27A(b)(1)(A)(ii) of the Securities Act and Section 21E(b)(1)(A)(ii) of the Exchange Act as to UBS resulting from the entry of the Order is hereby granted.

By the Commission.

Jonathan G. Katz
Secretary

 

http://www.sec.gov/rules/final/33-8378.htm


Modified: 02/12/2004