FSA has fined UBS AG £29.7 million for systems and controls failings that led to Kweku Adoboli causing losses of US$2.3 billion as a result of unauthorised trading. FSA found UBS had not focussed sufficiently on the key risks associated with unauthorised trading in its Global Synthetic Equities trading division. It noted many concerns, including:

  • lack of proper front office supervision;
  • a poor trade capture and processing system;
  • breaches of limits which went unpunished;
  • failure to investigate the reasons for the increase in profitability of the desk; and
  • failure to investigate requests by Mr Adoboli for profit and loss suspensions to the value of US$1.6 billion.

Mr Adoboli has been convicted of two counts of fraud and imprisoned for seven years. UBS' fine would have been £42.4 million had it not agreed to an early settlement. (Source: FSA fines UBS £29.7 million)