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The New York Times reports that UBS has been fined $13.3m by UK securities regulator The Financial Services Authority (FSA) for some dodgy goings on over at its wealth management arm in London.
A whistleblower apparently came forward to give up four former bank employees who are said to have been undertaking unauthorized trades of up to 50 a day on 39 client accounts. UBS is also said to have paid out over $42m in compensation to clients in relation to the transactions, which are said to have been carried out between January 2006 and December 2007.
FSA enforcement head Margaret Cole said: ‘These employees were able to take advantage of UBS’s inadequate systems and controls, giving them free rein to make unauthorized trades with customer money that they were then able to conceal’. UBS says that it ‘deeply regrets’ the debacle.
In the meantime, US prosecutors revealed that 14 more people have been charged in connection with a widescale probe into alleged insider trading at hedge funds. Those charged include a former Galleon Group trader known as ‘Octopussy’, because he had a reputation of having his tentacles into many sources of information. More arrests are expected in the coming weeks.
Finally, Bloomberg reports that JPMorgan’s discovery that Bear Stearns (which it took over last year) was exposed to millions of dollars in loans to a hedge fund no-one had heard of, led to the probe that resulted in the arrest of K1 Group founder Helmet Kiener, who is accused of defrauding a series of banks out of as much as $400m.
