The Securities and Exchange Commission slapped UBS Financial Services with a $500,000 fine for failing to supervise a former broker who swindled millions from his clients.
The broker, Enrique Perusquia, is currently serving a 78-month prison sentence for defrauding his clients of “tens of millions of dollars” says the SEC’s order. He worked for PaineWebber from June 1994 until March 1998; UBS bought PaineWebber in 2000.
UBS Financial Services did not admit or deny the SEC’s allegations, but settled the case with a $500,000 payment for failing to “reasonably” supervise Perusquia.
Perusquia worked for PaineWebber from June 1994 to March 1998, during which time he used a Swiss bank account to perpetrate the fraud.
UBS representatives could not be reached for comment.
The SEC order charges PaineWebber with not having the adequate controls in place to know who Perusquia’s clients were or what kind of trading they did.
“Brokerage firms have a duty to adopt procedures reasonably designed to prevent fraudulent conduct by their employees,” said Helane Morrison, district administrator for the SEC’s San Francisco office.
Perusquia has faced three separate actions from the SEC and the U.S. Attorney’s Office for the Northern District of California. In a criminal action filed by the U.S. Attorney’s Office, Perusquia pled guilty and had to fork over $68 million in restitution as well as serving the 78-month term.