UBS fined $48m by FSA over scandal
Zurich, November 27, 2012
UBS was fined £30 million ($48 million) by Britain's financial watchdog and put under extra scrutiny by its Swiss counterpart over failings that allowed a rogue trader to lose $2.3 billion.
Announcing the fine yesterday, the director of enforcement at Britain's Financial Services Authority (FSA) said the Swiss bank's risk control systems were "seriously defective."
Kweku Adoboli, a trader on UBS's Exchange Traded Funds desk in London, was jailed for seven years last week after admitting trading far in excess of authorised limits in the biggest fraud in British history.
"Failures of this type in firms of the size and standing of UBS not only damage the firms concerned but also wider confidence in the integrity of the markets and the financial system," the FSA's Tracey McDermott said.
In a separate announcement, the Swiss financial regulator Finma said it was examining whether UBS should increase capital to back its operational risks. A Finma spokesman declined to elaborate.
Espirito Santo Investment Bank analyst Andrew Lim doubted whether the Swiss regulator would push UBS to raise more capital because the bank was already in a strong position.
Since the government bailed out UBS during the 2008 financial crisis, Switzerland has drawn up tough new capital standards for its two global banks - UBS and Credit Suisse - that go beyond the new Basel III global rules.
UBS yesterday said it had made progress over the past year "reinforcing our position as one of the most financially sound global banks."
The Swiss regulator also said it is appointing an independent investigator to see whether the action UBS is taking to put things right after last year's scandal is proving effective.
Finma said the bank's control functions had been based too much on trust and that it had sent misleading signals by awarding bonuses and pay rises to Adoboli, even though he had breached the rules.-Reuters
More INTERNATIONAL NEWS Stories
- Big bananas: Chiquita, Fyffes merge
- Radar sweeps, dozens of aircraft, 6 navies, but no sign of missing plane
- N Korea tanker loads oil at Libya rebel port
- Gold drops as US growth optimism weighs
- Merkel raps Putin; Russia tightens grip on Crimea
- World 'at sea' over missing Malaysian jetliner
- Passports requiring probe were on Malaysia flight
- 40 killed in Yemen as Houthi fighters near capital
- Vietnam finds object in sea; search on
- $5bn poll spend to boost India economy
- Libya authorises use of force against Korean tanker
- Ukraine PM says he will go to US to discuss crisis
- Syrian journalist killed covering fighting
- Malaysian jet may have turned back before vanishing
- No sign of missing plane; Malaysia probes false passports
- Two Europeans not on board 'missing' Malaysian jet
- China draws red line on North Korea
- Saudi sentences three to death for 2003 bombing
- First bitcoin machine opens in UK
- US sanctions will boomerang, warns Russia
- China plans $50bn bank to fund projects
- Sony to sell Tokyo 'birthplace'
- Obama orders sanctions over Russian moves
- Crimea parliament votes to join Russia
- Arab League to be revamped
- 'Upskirting' is legal: Massachusetts court
- Singapore probes 'unnatural' death of bitcoin trader
- Onus on world powers for Syria war crimes: UN
- US, Russia set for talks on Ukraine crisis
- Brent oil drops below $109