LONDON — Britain’s Financial Services Authority fined UBS $47.5 million on Monday for failing to prevent a $2.3 billion loss caused by a former trader.
The fine was one of the largest penalties ever issued by the British regulator.
UBS was found to have had serious weaknesses in the internal controls of its investment banking unit. The failings allowed Kweku M. Adoboli, a former trader at the bank, to rack up a multibillion-dollar loss last year after he carried out a series of unauthorized trades.
Adoboli, 32, got a seven-year prison sentence last week on two counts of fraud in connection with the loss for abusing his position at UBS from 2008 to 2011.
The Financial Services Authority had been working with its Swiss counterpart in a yearlong investigation of the trading loss at UBS.
British and Swiss regulators said on Monday that UBS had failed to manage the risks of its London-based traders. The lack of supervision allowed the unauthorized trading to continue for an extended period of time, according to the authorities.
UBS said it accepted the decisions from the British and Swiss regulators. “We are pleased that this chapter has been concluded,’’ UBS said in a statement.
New York Times