SEC Charges Former UBS Executive Director for Submitting Ineligible Retail Orders
April 30, 2020
File No. 3-19779
April 30, 2020 - The Securities and Exchange Commission today instituted a settled enforcement action against Jerry E. Orellana, a former Executive Director of UBS Financial Services Inc., for his improper conduct involving retail orders in new issue municipal bond offerings.
According to the SEC's order, Orellana, of New Jersey, was responsible for accepting orders for new issue municipal bonds from UBS registered representatives on behalf of their customers, and submitting those orders to the underwriting syndicate in offerings distributed by UBS. Orellana submitted retail orders to the underwriting syndicate from certain UBS customers who were engaged in the business of buying and immediately reselling, or "flipping," new issue bonds. Orellana knew or should have known those orders did not qualify for retail priority. In addition, Orellana supplied inaccurate zip codes with some of those orders, which created the misimpression that the flipper customers were legitimate retail customers within a specific jurisdiction whose orders were entitled to the highest priority.
The SEC's order found that Orellana willfully violated the disclosure and fair dealing provisions of Rules G-11(k) and G-17 of the Municipal Securities Rulemaking Board. Without admitting or denying the SEC's findings, Orellana consented to a 6-month industry suspension and penny stock bar. The order also imposes a $25,000 civil penalty.
For further information about the Commission's efforts to address abuses of the retail order period in municipal bond offerings, see Press Release No. 2018-153 (August 14, 2018), Administrative Summary 3-18936 (December 18, 2018), and Administrative Summary 3-19408 (September 3, 2019).
The SEC's investigation, which is continuing, is being conducted by the Division of Enforcement's Public Finance Abuse Unit, including Joseph Chimienti, Laura Cunningham, Warren Greth, Cori Shepherd, and Jonathan Wilcox, with assistance from Deputy Unit Chief Mark Zehner. The investigation is supervised by Ivonia K. Slade.