Fine could have been worse Simon Zenger/Shutterstock.com
The Financial Services Authority penalty doled out to Zurich-based global banking giant UBS was the third largest in the regulator’s history, according to a report on the Financial Times’ web site. It resulted from the bank’s poor supervision of Kweku Adoboli -- who was found guilty of the biggest fraud in UK history -- and follows a joint investigation with its Swiss counterpart, the Financial Market Supervisory Authority (Fima).
Catalogue of failure
The FT report points out that the Swiss authorities do not have the power to fine, but nonetheless UBS will not escape ramifications on its home turf. Finma told the newspaper that it has put in place measures to ensure the bank takes steps to shore up its supervision of traders.
A statement from the UK regulator – published by the news agency Reuters – was damning of the bank’s supervisory failings at its London offices. ‘UBS failed to take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems, and failed to conduct its business from the London branch with due skill, care and diligence,’ said the FSA.
According to the FT report, the fine – one of the first levied under the regulator’s updated penalty policy – could have been worse. However, the bank bagged a 30 per cent discount by co-operating with the authority and settling as soon as possible.
In a statement to the paper, the bank said: ‘We have fully co-operated with the regulators’ investigations and we now accept their findings and the penalties incurred. We are pleased that this chapter has been concluded and that the regulators have acknowledged the steps UBS has taken since this incident.’
See Global Legal Post special report on Switzerland