The Financial Services Authority (FSA) has fined UBS AG (UBS) £29.7 million for systems and controls failings that allowed an employee to cause substantial losses totalling US$2.3 billion as a result of unauthorised trading.
The trader, Kweku Adoboli, has been convicted of two counts of fraud by abuse of position and sentenced to seven years' imprisonment.
Speaking after the conviction, Andrew Penhale, deputy head of fraud at the Crown Prosecution Service, said: "Behind all the technical financial jargon in this case, the question for the jury was whether Kweku Adoboli had acted dishonestly, in causing a loss to the bank of $2.3bn. He did so, by breaking the rules, covering up and lying. In any business context, his actions amounted to fraud, pure and simple.
"The amount of money involved was staggering, impacting hugely on the bank but also on their employees, shareholders and investors. This was not a victimless crime."
UBS agreed to settle at an early stage and therefore qualified for a 30% discount under the FSA's executive settlement procedures. Were it not for this discount, the fine would have been £42.4 million.
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