State of Connecticut Department of Banking

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Connecticut Department of Banking to Receive
$5.5 Million in Settlement With UBS Financial Services, Inc.

January 17, 2006 -

Banking Commissioner John P. Burke announced today that the Department of Banking’s Securities and Business Investments Division has reached an agreement with UBS Financial Services, Inc. to resolve allegations the company failed to supervise its agents to prevent the practice known as “market timing.”  This practice occurred from approximately January 2000 through late February 2002.

Market timing is the practice of trading in and out of mutual funds in order to exploit inefficiencies in mutual fund pricing and capture a profit at the expense of long-term investors and the mutual funds.

“The practice of market timing has a detrimental effect on Connecticut’s investors and the mutual funds in which they have invested their hard earned money,” said Commissioner Burke.  “Proper supervision of agents is critical in maintaining investor confidence.”

Under the terms of the agreement, UBS Financial Services, Inc. will pay a $1.5 million fine and contribute $4 million over the next four years to investor education and financial literacy programs, totaling $5.5 million.

Commissioner Burke added, “I am pleased to have funds available to further educate residents of Connecticut concerning financial matters.  The current financial environment makes it imperative that investors have the tools necessary to take charge of their economic future.”