UBS has been hit with a £29.7m by the Financial Services Authority for its failure to stop unauthorised trading by Kweku Aboboli that caused the bank to lose £1.4bn.
Mr Adoboli was last week sentenced to seven years in prison after being found guilty of two counts of fraud. Southwark Crown Court was told he was “a gamble or two away from destroying Switzerland’s largest bank”. The 32 year old had told the jury that managers at UBS had pressurised him to take unauthorised risks in order to raise profits for the bank.
Tracey McDermott, director of enforcement and financial crime at the FSA, said that,
"UBS's systems and controls were seriously defective. UBS failed to question the increasing revenue of the desk and failed to ensure that there was a corresponding increase in the controls in place over the desk. As a result Adoboli, a relatively junior trader, was allowed to take vast and risky market positions, and UBS failed to manage the risks around that properly."
UBS was expected to get a fine of £45m , but the bank was qualified for a 30 per cent discount as it agreed for early settlement.
Written and presented by Alfred Joyner