FSA fines UBS client adviser £35,000

by Gill Montia

Story link: FSA fines UBS client adviser £35,000

A former UBS client adviser has been fined £35,000 by the Financial Services Authority (FSA).

Andrew Cumming has also been banned from performing any regulated function for a minimum period of five years, on the grounds that he is not “fit and proper”.

The penalty is in connection with an £8 million fine handed down to UBS earlier this month for systems and controls failures that allowed four of the investment bank’s employees to carry out unauthorised trades.

Their activities involved trading foreign exchange and precious metals using customer money and allocating losses to customers’ accounts.

The regulator found that Mr Cumming had signed paperwork that “helped to document false loans which were used to conceal losses arising from unauthorised trading”.

The offences, which took place between October 2005 and October 2007, were committed at the request of a senior colleague, although Mr Cumming was aware that the “loans” were not authorised by UBS.

FSA director of enforcement and financial crime, Margaret Cole, comments: “Although he [Cumming] did not stand to make a personal gain, his complicity allowed a colleague to continue making unauthorised trades, while the losses continued to mount up.”

The FSA’s penalty reflects the fact that Mr Cumming did not initiate the circumstances which led to his misconduct; did not conduct any of the unauthorised transactions; agreed to settle at an early stage of the FSA’s investigation and provided evidence that he is in serious financial hardship.

The penalty would otherwise have been £100,000.