Chemistry Board

UBS Fined $47.6 Million

UBS was fined £29.7 million ($47.6 million) by the U.K. and told by the Swiss that it may have to increase capital levels for operational risks as regulators levied penalties after Kweku Adoboli’s $2.3 billion trading loss.

Adoboli, a former trader in UBS’s London office, was sentenced to seven years in jail on 20th November for fraud in relation to the loss, the largest from unauthorized trading in British history. About $2.1 billion of the loss arose from long positions in stock futures that peaked at $12.1 billion on 8th August, 2011, and were closed out three days later, while the remainder was incurred on short positions in stock futures that were entered afterward and peaked at $8.5 billion on 15th September, Finma said. 

The Financial Services Authority in the U.K. issued the fine today, saying the loss revealed serious weaknesses in management systems and internal controls. Finma, the Swiss regulator, said it instructed UBS to appoint an independent third party to report on the progress and completion of a program to fix these failings. The effectiveness of controls against unauthorized trading will also be checked by an auditor once the program is finished.

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