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UBS sees profits rise, probed over trading system

By WTOP Staff

JOHN HEILPRIN
Associated Press

GENEVA (AP) — Switzerland’s biggest bank, UBS, reported Tuesday a 15 percent rise in second-quarter profit, driven by its core wealth management business, and disclosed it was part of a group of financial companies being investigated over alternative trading systems called “dark pools.”

UBS AG said its net profit for the April-June period rose to 792 million Swiss francs ($876 million) from 690 million francs in the comparable period in 2013.

Shares in UBS slid 1.81 percent to close at 16.32 francs in Zurich trading Tuesday.

The Zurich-based bank also said it had settled an investigation in Germany of charges that the bank aided German clients suspected of evading taxes. UBS made a payment of about 300 million euros ($403 million) to put the case to rest, one of a number that it and other Swiss banks have been facing from U.S. and other foreign tax authorities hunting down suspected tax cheats.

The bank said its second-quarter results reflect 120 million francs it booked in the German case.

Prosecutors in the German city of Bochum confirmed the settlement. They said they expect also to close proceedings against individual bank employees in exchange for fines, and that in one case they have sought a 250,000-euro fine.

UBS’s quarterly financial statement said all of its business divisions and regions delivered strong second-quarter operating performances, and that it continued to build its capital reserves in keeping with global and Swiss rules.

“We delivered strong underlying results in a market environment that remained challenging for our clients and the industry,” Chief Executive Sergio Ermotti said.

Looking ahead, the bank said the outlook is clouded by challenges in Europe, where economic growth remains fragile and fiscal and monetary policy issues in the U.S., where the Federal Reserve is gradually tightening its stimulus taps. It also cited global geopolitical instability, with Western powers considering more sanctions on Russia and with fighting on the rise parts of the Middle East.

Other possible problems remain. In its report, UBS said it is “responding to inquiries” from U.S. regulators and the New York attorney general over the operation of its “dark pool,” an alternative trading system.

Those include a 2 ½ year-old investigation by the Securities and Exchange Commission into features “including certain order types and disclosure practices that were discontinued two years ago,” UBS said, adding that it is cooperating.

It said it also is among dozens of defendants, including trading exchanges and high-frequency trading firms, named in putative class-action suits pending in New York federal court.

Last month, New York’s attorney general announced a securities fraud lawsuit against Britain’s Barclays PLC, which he said misled large institutional investors and other clients by falsely telling them it was taking measures to protect them from predatory high-frequency traders.

UBS’s German rival Deutsche Bank said in its own second-quarter report Tuesday that it had “received requests for information from certain regulatory authorities related to high frequency trading,” and is cooperating. It said that it also had been named as a defendant in putative class-action complaints allegation violations of U.S. securities laws.

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Geir Moulson contributed to this report from Berlin.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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