UBS fined for client rip-offs
ONE of the City’s foremost investment banks, UBS, was yesterday fined £8m by the Financial Services Authority (FSA) after four former London-based dealers plundered customer accounts to trade and dumped the resulting losses on them.
The fine – the third largest ever demanded by the FSA – comes after the Swiss bank had to compensate clients by more then $42m (£25.3m).
The FSA said UBS’s controls failed to stop the employees carrying out unauthorised trades on at least 39 accounts over nearly two years.
The four dealers at UBS – struggling to rebuild its reputation after a high-profile US tax fraud probe — made up to 50 foreign exchange and precious metals trades a day using customer money.
“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, FSA director of enforcement and financial crime.
“UBS deeply regrets this incident and, having fully co-operated with the FSA’s investigation, we are now pleased that this matter has been settled so that we can move forward,” UBS said in a statement.