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Swiss bank UBS fined £8m

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by Kay Mitchell

Swiss banking giant UBS has been fined £8 million by the Financial Services Authority (FSA) – the third largest penalty ever handed out by the UK regulator.

However, the fine would have been £10 million but the Swiss bank agreed to settle with the FSA at an early stage.

The bank, which is Switzerland’s fourth largest, was fined for failing to stop four of its employees making unauthorised transactions, using customer money on at least 39 accounts.

The fine is the latest in a series of bad news for the bank as it is among one of the worst hit victims of the financial crisis due to its exposure to the sub-prime mortgage crisis in the US and has announced substantial job losses.

Furthermore, earlier this year, the bank was at the centre of an investigation by US authorities involving alleged tax evasion by its clients.

Meanwhile commenting on the fine, Margaret Cole, FSA director of enforcement and financial crime, said: “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.”

The penalty, one of the largest fines we have levied, reflects our tougher enforcement stance and our policy of imposing steep penalties to achieve credible deterrence,” Cole added.

The bank said: “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 we can move forward.”

It is not the first time UBS has been fined by the FSA – it was fined £100,000 in November 2005 for failings in transactional reporting.

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News posted: November 5, 2009

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