Swiss banking giant UBS has revealed that it is being probed by Hong Kong regulators for its role as a sponsor of certain initial public offerings (IPOs) in the city.
Hong Kong’s Securities and Futures Commission (SFC) informed the bank of its actions last month, and “intends to commence action against UBS and certain UBS employees with respect to sponsorship work in those offerings,” the Swiss bank said in its third quarter earnings statement.
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UBS, however, did not divulge precise details on the IPOs or its employees under investigation.
SFC’s action could include financial penalties, and the suspension of the bank’s ability to offer corporate finance advisory services in the country for a period of time, the bank said.
The move comes after the SFC introduced a new regulation that holds banks sponsoring IPOs liable for claims made in prospectuses.
In July 2016, the Monetary Authority of Singapore decided to take action against UBS after finding lapses in anti-money laundering controls in the bank related to Malaysian state fund 1Malaysia Development Berhad (1MDB) scandal.
In September 2016, the bank was also fined by the US Securities and Exchange Commission (SEC) for failing to adequately train its sales force about critical aspects of certain complex financial products it sold to retail investors.
