Skip to main content

Unlike most of its peers, UBS had a pretty decent second quarter. Apparently, its unique constellation of other ailments renders it immune from the coronavirus.

But UBS is less exposed than its European rivals. Like Morgan Stanley and Goldman Sachs in the U.S., UBS has a relatively low level of credit risk. Thanks to its strategic focus on wealth management, riskier forms of lending are limited. Most of its loan book is secured: Over half are mortgages, most of them in Switzerland, with a 55% average loan-to-value ratio, and another third are so-called Lombard loans to wealth-management clients backed by securities, with a 50% average LTV.

Alas, the very same illness that have kept it safe from COVID have some pretty unpleasant side effects themselves, such as $10 million fines.

Over a four-year period, UBS improperly allocated bonds intended for retail customers to parties known in the industry as “flippers,” who then immediately resold or “flipped” the bonds to other broker-dealers at a profit. The order finds that UBS registered representatives knew or should have known that flippers were not eligible for retail priority. In addition, the order finds that UBS registered representatives facilitated over 2,000 trades with flippers, which allowed UBS to obtain bonds for its own inventory, thereby circumventing the priority of orders set by the issuers and improperly obtaining a higher priority in the bond allocation process.

UBS to Pay $10 Million for Violating Rules Which Give Priority To Retail Investors in Municipal Offerings [SEC]
UBS to pay $10m to resolve SEC charges related to protecting retail investors [FN]
UBS’s Viral Immunity Isn’t Shared [WSJ]


Getty Images

UBS Probably Not Renewing A Whole Bunch Of Leases

The former proprietor of the world’s largest trading floor is eyeing spare bedrooms, breakfast nooks for one-third of employees.

Getty Images

UBS Is Basically The Bermuda Triangle

It just can’t stop getting slammed by perfect storms.

Getty Images

UBS Now A Miserable Enigma Wrapped Around A Point72 Hedge Fund

Nothing else is solid or steadfast in Switzerland but an in-house hedge fund.

Getty Images

Bonus Watch '19: UBS Allegedly Hopes Pregnant Employees Enjoy Babies More Than Money

The Swiss lender is pretty sure all that time spent complaining about gender equity could be spent parenting that baby who ruined your career.

Getty Images

UBS Is Taking No Chances These Days

Do anything that might make a regulator do so much as a double take and you’re fired.