UBS facing up to £50m fine over Adoboli

Ghanaian-born UBS trader Kweku Adoboli sentenced to seven for $2.3 billion fraud

Πηγή: FT
By Brooke Mastersand James Shotterin
Nov 22 2012

UBS and its regulators are hammering out a settlement that will likely see the Swiss bank hit with one of the largest UK fines ever and facing new intrusive supervisory measures for control failures that led to to its $2.3bn rogue trading loss, people familiar with the negotiations said.

Finma, the Swiss regulator, has essentially finished its enforcement action and is waiting for the UK’s Financial Services Authority and UBS to work out the final details on a penalty that will likely range between £20m and £50m. A joint announcement could come as soon as next week.

The two regulators announced a joint probe in September 2011, shortly after UBS announced that Kweku Adoboli, a director on UBS’s Delta One desk, had lost more than $2bn. But the results were delayed until after Mr Adoboli’s criminal trial. He was convicted of fraud and jailed for 7 years earlier this week.

Finma, which does not have the power to levy fines, is expected to impose new supervisory conditions on UBS, and the bank and the FSA are still talking about the the final numbers.

Finma, UBS and the FSA all declined to comment.

People close to the situation say that both sides believe UBS’s conduct was less egregious than the Libor manipulation scandal that led Barclays to pay £50m to the UK regulator as part of a £290m total penalty.

The closest analogous UK case is probably Goldman Sachs’ £17.5m fine for failing to tell the FSA it was under US investigation.

UBS has argued that its penalty should be reduced because no clients were harmed and the bank itself was a victim of a crime. It has also suggested that the total ought to take into account the roughly $20m it has paid to fund a comprehensive investigation by KPMG that was ordered by the regulators.

While the regulatory settlements should draw a line under the Adoboli scandal, UBS has plenty of challenges ahead. The bank is under investigation on three continents for its role in the Libor scandal and is expected to face a large penalty despite having partial immunity from some regulators. UBS is also pulling back from investment banking, particularly fixed income, with an 10,000 expected job losses over the next couple of years.