UBS Fined $14 Million for Dark Pool

WASHINGTON (CN) - UBS Securities will pay $14.4 million to settle charges of securities violations in marketing its dark pool, the SEC said Thursday.

Dark pools are private fora for trading securities, supposedly so larger traders, including high-speed traders, can move investments around without letting the market know what they are doing.

The SEC said in a statement accompanying its settled lawsuit that UBS "failed to properly disclose to all subscribers the existence of an order type that it pitched almost exclusively to market makers and high-frequency trading firms."

The order type, called PrimaryPegPlus, allowed "certain subscribers" to buy and sell securities in increments of less than 1 cent, the SEC said, in violation of a regulation.

"By doing so the firm enabled users of the PPP order type to place sub-penny-priced orders that jumped ahead of other orders submitted at legal, whole-penny prices."

SEC enforcement said: "The UBS dark pool was not a level playing field for all customers and did not operate as advertised."

Read the Top 8

Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.

Email *

Submit