UBS To Pay SEC $10M Over Muni Bond 'Flipping' Scheme

Law360 (July 20, 2020, 9:41 PM EDT) -- Broker-dealer UBS Financial Services Inc. has agreed to pay the top securities regulator more than $10 million to resolve claims that it allocated municipal bonds intended for retail customers to ineligible "flippers" who resold the bonds at a profit.

The U.S. Securities and Exchange Commission said Monday that over a four-year period, UBS circumvented the priority given to retail investors in certain municipal bond offerings by allocating bonds to ineligible entities known in the industry as "flippers," who then hawked the bonds to broker-dealers.

UBS made approximately $1.54 million in profit from these improper allocations and another $5.2 million in profit...

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