Washington (Aug. 26, 2003) -- UBS PaineWebber Inc. agreed to pay the Securities and Exchange Commission a civil penalty of $500,000 for failing to supervise a former registered representative who defrauded his clients of tens of millions of dollars.
The firm didn’t admit or deny the commission's findings. According to the SEC order, Enrique E. Perusquia, a senior vice president and registered representative at PaineWebber from 1994 to 1998, invested large portions of his clients' funds in a small group of highly speculative gold mining firms while simultaneously receiving secret payments from the mining companies. He also misappropriated client funds and engaged in unauthorized margin trading. The subsequent collapse of the gold mining firms, combined with Perusquia's other misconduct, caused his clients to lose tens of millions of dollars, the SEC said.
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