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From the WSJ:
NOVEMBER 5, 2009, 11:10 A.M. ET
UPDATE: FSA Fines UBS GBP8M For Failures On Trading Controls
LONDON (Dow Jones)--The U.K. Financial Services Authority on Thursday said it has fined UBS AG (UBS) GBP8 million for systems failures that led to unauthorized trades being made by employees using customers' money and allocating losses to their accounts.
The fine is the third-largest ever levied by the U.K. regulator and is just the latest setback for the Swiss bank, which has recently been embroiled in legal wranglings on top of having take significant losses on assets.
The unauthorized activity at UBS' London-based wealth management business took place over a two-year period between January 2006 and December 2007 and was only discovered when a whistleblower raised concerns internally.
The activity involved trading in foreign exchange and precious metals with as many as 50 transactions a day taking place at the operation's peak. The four employees doing the unauthorized trading used some 39 different customer accounts...
...The FSA said that UBS had failed to manage and control key risks and the level of risk at its business and to respond to obvious warning signs that its controls were inadequate.
"These employees were able to take advantage of UBS' inadequate systems and controls, giving them free rein to make unauthorized trades with customer money that they were then able to conceal," said Margaret Cole, the FSA's chief enforcer...
UPDATE: FSA Fines UBS GBP8M For Failures On Trading Controls
LONDON (Dow Jones)--The U.K. Financial Services Authority on Thursday said it has fined UBS AG (UBS) GBP8 million for systems failures that led to unauthorized trades being made by employees using customers' money and allocating losses to their accounts.
The fine is the third-largest ever levied by the U.K. regulator and is just the latest setback for the Swiss bank, which has recently been embroiled in legal wranglings on top of having take significant losses on assets.
The unauthorized activity at UBS' London-based wealth management business took place over a two-year period between January 2006 and December 2007 and was only discovered when a whistleblower raised concerns internally.
The activity involved trading in foreign exchange and precious metals with as many as 50 transactions a day taking place at the operation's peak. The four employees doing the unauthorized trading used some 39 different customer accounts...
...The FSA said that UBS had failed to manage and control key risks and the level of risk at its business and to respond to obvious warning signs that its controls were inadequate.
"These employees were able to take advantage of UBS' inadequate systems and controls, giving them free rein to make unauthorized trades with customer money that they were then able to conceal," said Margaret Cole, the FSA's chief enforcer...