One would think there’s a giant, bronze statue of Eliot Ness standing in the middle of the Enforcement Division of the Securities and Exchange Commission (SEC) with their dogged pursuit of wrongdoers these days.
Hours after the SEC issued a statement to pat itself on the back for a job well done by setting a record for the most cases it’s brought in a single year, news broke that they’re back to pounding the pavement.
The commission recently charged Swiss bank UBS AG with faulty recordkeeping related to short sale orders, which it settled yesterday. As terms of the settlement, UBS will pay an $8 million fine and hire an independent consultant.
Last month, UBS also agreed to a $12 million fine to settle additional charges related to short sales made by the Financial Industry Regulatory Authority (FINRA).
Both FINRA and the SEC charged the bank with violating SEC rule Regulation SHO, which is intended to deter abusive “naked” short selling, and make sure brokerages deliver shares in the short sale transactions they process.
Unfortunately for UBS, however, these settlements may just be foreshadowing for bigger legal issues yet to fully develop. The bank made headlines in September when a rogue trader caused it to lose more than $2 billion from unauthorized trades, and then a few weeks later when the Department of Justice cracked down on it and seven other banks for potentially facilitating tax evasion by U.S. citizens.
For more, read Reuters.
