UBS has agreed to pay $23.3 million to resolve accusations that it had guided thousands of customers into inappropriate fee-based accounts.
Under the terms of the settlement reached with New York State, UBS Financial Services will pay $21.3 million to around 3,000 customers.
Meanwhile, a further payment of £3 million will go to the state.
The case centred on accusations that UBS placed the clients into its InsightOne wrap accounts, which carry heavy fee payments - despite the fact that the customers in question only made very few trades.
Furthermore, it was alleged that UBS had failed to correctly screen customers prior to endorsing the accounts, leading to them paying high fees unnecessarily.
Attorney general Andrew Cuomo said: "UBS convinced customers to rely on its advice and then abused that trust. This major settlement is a win for customers inappropriately pushed into unsuitable brokerage accounts and a warning to the entire industry that customers' interests must come first."
UBS did not admit culpability for the mis-selling of the accounts, and said it had paid the fee to avoid "protracted legislation".