SEC says UBS to pay $15 mln over sales practices

WASHINGTON/NEW YORK (Reuters) - UBS Group AG agreed to pay more than $15 million to settle U.S. Securities and Exchange Commission charges that a failure to properly train its sales force led to the sale of hundreds of millions of dollars of unsuitable securities to customers.

The SEC on Wednesday said UBS from 2011 to 2014 sold about $548 million of "reverse convertible notes" to more than 8,700 retail customers who were relatively inexperienced and may not have wanted the risks.

Many of the customers had modest net worths and incomes and low tolerances for risk, the SEC said adding some were retired.

Michael Osnato, chief of the SEC enforcement division's complex financial instruments unit, said brokerages such as UBS must be sure that financial advisers understand the potential risks and rewards of complex products they recommend.

"The SEC takes a dim view of firms that fall short," he said.

UBS agreed to pay a $6 million civil fine, give up $8.23 million of improper gains, and pay about $798,000 of interest. The Swiss bank did not admit nor deny wrongdoing.

A UBS spokesman had no immediate comment.

(Reporting by Jonathan Stempel in New York and Tim Ahmann in Washington, D.C.; Additional writing by Eric Walsh; Editing by W Simon and Alan Crosby)