UBS Financial Services has agreed to pay $54 million to settle allegations of deceptive "market timing" of mutual-fund trading by brokers wo...

UBS Financial Services has agreed to pay $54 million to settle allegations of deceptive "market timing" of mutual-fund trading by brokers working in three US branches in New Jersey and Connecticut.

The allegations, which were neither confirmed nor denied by UBS, were brought by the New York Stock Exchange.

Half of the total will be directed to a NYSE fund for "injured" customers with $5.75 million paid as a fine to the exchange.

The NYSE said UBS failed to have procedures for identifying brokers who made rapid trades for customers who were primarily hedge funds, which drove up costs and reduced performance for long-term fund investors.