Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Friday, March 4, 2011

Former UBS Adviser Settles SEC Charges He Stole Customers' Funds

The SEC charged Steven T. Kobayashi, a former financial adviser at UBS Financial Services LLC, with misappropriating $3.3 million in a scheme that included bilking investors in a private investment fund he established.  According to the SEC, Kobayashi created a pooled investment fund to invest in life insurance policies. But he wound up stealing much of the money to support his extravagant lifestyle. Kobayashi concealed his fraud by liquidating his customers’ securities and funneling the money back to the fund and its investors.

In a parallel action, the U.S. Attorney’s Office for the Northern District of California today filed criminal charges against Kobayashi arising from some of the same alleged misconduct.

Kobayashi agreed to settle the SEC’s charges against him without admitting or denying the allegations.  The amount of ill-gotten gains and monetary penalties that Kobayashi will be required to pay will be determined by the court at a later date.

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