FINRA Fines UBS $2M For Continued Muni Violations

Law360 (October 2, 2019, 5:00 PM EDT) -- The Financial Industry Regulatory Authority on Wednesday said it fined UBS Financial Services $2 million for continually failing to notify customers about the changes in tax-exempt status of their municipal securities.

FINRA said UBS didn't tell customers about shorts created in the municipal securities they purchased when they were borrowed by investors and sold on the market. Although the securities were in short positions, the firm took responsibility for paying interest instead of the municipalities.

According to FINRA, municipal securities are commonly purchased because the interest on them is tax-exempt, but that only applies when the interest is paid by the...

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