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UBS
UBS in Hong Kong has been fined HK$400 million ($51.1 million) for overcharging clients over a 10-year period and for serious internal control failures.

The Hong Kong Securities and Futures Commission reprimanded the bank, according to a statement on its website earlier in the week.

The Zurich-listed bank has also undertaken to compensate the affected clients by repaying them the full value of the overcharged amount together with interest, the SFC said. The total repayment amount is about HK$200 million and covers overcharges made through post-trade spread increases and charges in excess of standard disclosures or rates between 2008 and 2017. The overcharge practices affected about 5,000 Hong Kong-managed client accounts in about 28,700 transactions.

The SFC said that the bank not only failed to act in clients' interests but abused their trust by not disclosing it had conflicts of interest and overcharged them in "opaque trades".

“The SFC expects all intermediaries to uphold high standards of integrity when managing trades for clients. UBS fell far short of these expectations by systematically overcharging a very large number of clients over many years. Although each overcharge represented a fraction of each trade, UBS’s misconduct involved deception and a pervasive abuse of trust resulting in significant additional revenue for UBS to which it was not entitled," Ashley Alder, the SFC’s chief executive, said.

Between 2008 and 2015, client advisors and their assistants in UBS’s wealth management division overcharged clients when conducting bond and structured note trades by increasing the spread charged after the execution of trades without their clients’ knowledge; and between 2008 and 2017, UBS also charged its clients fees in excess of its standard disclosures or rates.

The regulator said it took into account the overcharging period involved (10 years) and the fact that the overcharging practices were undetected for at least seven years. The SFC also acknowledged that UBS has disciplined more than 20 staff involved in malpractices, and has agreed to fully compensate its affected customers.