UBS fined £8m over traders' actions
Thursday, 5 November 2009 12:57Britain's financial watchdog has fined Swiss bank UBS £8m for allowing four former employees to make unauthorised trades with customers' money.
Handing down its third-largest fine, the Financial Services Authority (FSA) said UBS had shown systems and controls failures that enabled the staff to carry out the trades on at least 39 accounts over almost two years. It said UBS had paid more than £25.3m to compensate customers for losses.
The FSA said the UBS staff had traded foreign exchange and precious metals using customer money without authorisation and allocated losses to customers' accounts. At its peak, as many as 50 trades a day were taking place.
'These employees were able to take advantage of UBS's inadequate systems and controls, giving them free rein to make unauthorised trades with customer money that they were then able to conceal,' said Margaret Cole, the FSA's director of enforcement and financial crime.
UBS agreed to settle at an early stage of the investigation, qualifying for a 20% discount without which the fine would have amounted to £10m.
UBS said it had taken full remedial action after the trades, which had taken place between January 2006 and December 2007 at the bank's London-based wealth management business. They only came to light when a whistleblower raised the alarm internally.
