SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): January 18, 1996
----------------
PAINE WEBBER GROUP INC.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-7367 13-2760086
- ------------------------- ------------------------ -----------------------
(State or other jurisdic- (Commission File Number) (IRS Employer
tion of Incorporation) Identification No.)
1285 Avenue of the Americas, New York, New York 10019
- -----------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 713-2000
--------------
Not Applicable
- -------------------------------------------------------------------
(Former name or address, if changed since last report)
<PAGE>
Paine Webber Group Inc.
-----------------------
Item 5. Other Events
- ------- ------------
(a) Copy of the Registrant's press release relating to the
Resolution of limited partnership issues.
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PAINE WEBBER GROUP INC.
By: /s/ REGINA DOLAN
------------------------
Regina Dolan
Vice President and
Chief Financial Officer
Dated: January 24, 1996
<PAGE>
EXHIBIT INDEX
-------------
(a) Copy of the Registrant's press release relating to the resolution
of limited pertnership issues.
Exhibit (a)
Public Relations
PaineWebber Incorporated
1200 Harbor Blvd.
Weehawken, NJ 07087
201 902-6775
201 902-6225 Fax
PaineWebber
FOR IMMEDIATE RELEASE
---------------------------
Contact: Sarah Luke or Susan Thomson
(212) 713-8391
PAINEWEBBER ANNOUNCES FINAL RESOLUTION OF
LIMITED PARTNERSHIP ISSUES
NEW YORK, January 18, 1996 -- PaineWebber Group Inc. (NYSE: PWJ) today
announced a series of actions that, taken together, will constitute a final and
comprehensive resolution of the issues related to the firm's sale of public
proprietary limited partnerships in the 1980s and early 1990s. Those actions
include:
. An agreement to settle all pending class actions;
. A settlement with the Securities and Exchange Commission (SEC); and
. An agreement to settle with the various state regulators.
Terms of the Settlements
- ------------------------
The agreements announced today include a class action settlement of $125
million and other non-cash consideration; an SEC administrative order creating
a capped $40 million fund; a civil penalty of $5 million levied by the SEC; and
payments aggregating $5 million to state securities administrators. In
addition, PaineWebber has paid claims that approximate $120 million over the
past several years primarily through the firm's pre-existing Early Dispute
Resolution processes, with commitments to pay $7.5 million of additional
investor claims, all as reflected in the SEC's administrative order.
PaineWebber's previously-announced pre-tax charge of $200 million in the
second quarter of 1995 will cover the costs of resolving all these limited
partnership claims, with the exception of certain administrative expenses
related to the settlements and their implementation. PaineWebber will take a
fourth quarter 1995 pre-tax charge of $30 million to cover these additional
expenses. The difference between the $230 million in pre-tax charges and the
total sums 1) paid or to be paid to settle client claims ($292.5 million); 2)
to be paid to the SEC and various state regulators ($10 million); and 3)
reserves for administrative expenses ($30 million), principally represents
monies already paid in prior periods to clients and for related expenses.
-more-
<PAGE>
In a separate release, issued today, PaineWebber announced its financial
results for the fourth quarter and full year 1995.
As part of the SEC settlement, PaineWebber will retain an independent
consultant to review the firm's policies and procedures concerning retail
brokerage operations and the dissemination of sales and marketing materials.
In addition, a committee of PaineWebber Incorporated's Board of Directors will
oversee policies related to the firm's compliance efforts, and monitor the
implementation of any recommendations by the consultant.
Resolution of Limited Partnership Issues
- ----------------------------------------
Announcing the comprehensive resolution of limited partnership issues,
PaineWebber Chairman and Chief Executive Officer Donald Marron commented:
"In addressing this matter over the past few years, culminating in our
announcement today, we pursued two overriding objectives -- first, to
resolve the issues raised by clients and regulators responsibly and
cooperatively; and, second, to do everything we can to ensure that
similar issues do not recur. We have now achieved both of these
objectives, fulfilled our commitments to clients, and put this matter
behind us.
"We accept our full share of responsibility for the situation that arose
in connection with certain limited partnerships sold in the 1980s and
early 1990s, and we deeply regret the deficiencies in certain past
practices -- as well as the unauthorized and unacceptable behavior of a
small number of employees -- that led to these issues."
The company said, starting in the early 1990s, it had developed advanced
compliance and oversight practices, in order to enhance safeguards for its
clients. Among the many changes instituted, in this regard, have been the
enhancement of an Early Dispute Resolution process for the prompt and fair
resolution of legitimate client concerns; the adoption of new guidelines for
the management and supervision of the firm's retail network; the development
and implementation of the Trade Monitoring System, which rapidly analyzes
trading data and provides Branch Managers with an effective supervisory tool;
increased legal and compliance staffing; and modified compensation practices
to reinforce the alignment of interests between the firm's Investment
Executives and its clients. These efforts demonstrate the firm's commitment
to industry leadership on compliance issues.
"With these partnership issues now behind us, and our strong operating
performance discussed in our earnings release, we look to the future with great
confidence in the prospects for this firm and its people," Mr. Marron concluded.
###
