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UBS fined for failing to control rogue staff

Switzerland's UBS bank has been fined £8 million (SFr13.5 million) by Britain's financial watchdog for allowing unauthorised trading by four of its employees.

The Financial Services Authority (FSA) said on Thursday that “systems and controls failures” by the bank had enabled staff to use customer money to trade foreign exchange and precious metals, and to allocate the losses to customers’ accounts.

The trades, which took place between January 2006 and December 2007 and involved at least 39 accounts, were brought to light by a whistleblower. The staff involved were employed at the bank’s London-based wealth management centre.

UBS said it “deeply regretted” the incident, and had taken “full remedial action”. It cooperated with the FSA investigation, and agreed to settle at an early stage, which qualified it for a 20 per cent reduction in the fine.

The FSA said UBS had paid customers more than $42 million to compensate them for their losses.

The fine was the third largest ever imposed by the authority.

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