British Broadcasting Corporation
UBS branch UBS said it deeply regretted the incident
The Financial Services Authority (FSA) has fined Swiss banking giant UBS £8m for failing to stop its employees making unauthorised transactions.
The FSA said four UBS employees had carried out the transactions using customer money on at least 39 accounts.
The unauthorised activities took place between January 2006 and December 2007. The FSA also said the trades involved foreign exchange and precious metals.
In a statement, UBS said it "deeply regrets this incident".
"Having fully co-operated with the FSA's investigation, we are now pleased that this matter has been settled so that we can move forward," the bank said, adding it had already taken full steps to deal with the problem.
Earlier this week, UBS reported a loss for the July to September quarter.
'Steep penalties'
According to the FSA, an internal UBS investigation found that as many as 50 unauthorised transactions a day were taking place at the operation's peak.
It criticised the bank not only for systems failures that led to the trades, but also for not responding to "several warning signs" that the systems were not working.
"These employees were able to take advantage of UBS' inadequate systems and controls, giving them free rein to make unauthorised trades with customer money that they were then able to conceal," said the FSA's director of enforcement and financial crime, Margaret Cole.
"The penalty, one of the largest fines we have levied, reflects our tougher enforcement stance and our policy of imposing steep penalties to achieve credible deterrence."
The £8m fine is the third largest imposed by the FSA.
The regulator said that UBS agreed to settle at an early stage of its investigation, allowing the bank to qualify for a 20% discount.
Without the discount, the fine would have been £10m.
Last month, Switzerland's stock exchange said it was investigating UBS for possible breaches of public disclosure rules during the financial crisis.
Earlier this year, UBS was accused of helping Americans evade US taxes by opening accounts in Switzerland.
Print Sponsor
Man looking at a falling graph
Latest views from City insiders during a period of dramatic change for bankingAlistair Darling
Darling outlines bank break-upsShadow Chancellor George Osborne
Osborne slates £39.2bn banks shake-upLiberal Democrats Treasury spokesman Vince Cable
Cable challenges banks 'break-up'Peter McNamara
Banks sale plan may be a "big distraction"video Army 'dissent' over West Bank role
video Living the American dream
video 'Coma' man conscious for years
video Queen and Duke arrive in Bermuda
video Susan Boyle is mobbed in New York
video Hartson's cancer check warning
video One-minute World News
video Singh: Building 'shared destiny'
video How SA's poor get free electricity
video 2005: Gaza withdrawal
Chimneys silhouetted against the sun
Warming globeUS President Barack Obama and Commander of US Forces in Afghanistan Stanley McChrystal
Mardell's AmericaA man in the act of killing a buffalo
In picturesMost Popular Now | 15,700 people are reading stories on the site right now.
Quantcast
BBC © MMIX
The BBC is not responsible for the content of external internet sites.
This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.watch One-Minute World News