15:29 26 November 2012
The UK’s financial regulator Financial Services Authority (FSA) has fined the bank UBS £29.7million over the case of Kweku Adoboli. This relates to Adoboli’s fraudulency, which resulted in a loss of £1.4billion, as UBS was seen to have failings in its systems.
Adoboli, a former employee at UBS who is originally from Ghana, Africa, has been sentenced to seven years in prison for committing one of Britain’s biggest bank fraud acts. UBS has been fined by the FSA for bank systems failures that allowed Adoboli to commit fraud.
The FSA said in a statement: “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.”
The Director of Enforcement and Financial Crime at FSA, Tracey McDermott, said that UBS had “seriously defective” controls and that as a result, Adoboli “was allowed to take vast and risky market positions”.
It is understood the fine was reduced by over £12million, with the initial penalty being set at £42.4million, because the Swiss bank made an early settlement.
The Swiss financial regulator Finma and the FSA are believed to have begun their investigations in February this year.
Some reports have stated that Adoboli could be seen as being a ‘rogue trader’. He confessed to his actions in an email sent in September 2011.
Another case involving large fines being imposed on banks relates to the action taken against Barclay’s, where £59.5million was levied with regards to Libor rigging claims.
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