SWISS bank UBS has been fined almost £30m by the Financial Services Authority (FSA) after admitting to serious failures relating to its handling of the Kweku Adoboli fraud case.
The regulator fined the company £29.7m for serious weaknesses in its internal controls that should have stopped the rogue trader from running up unauthorised losses of $2.3bn in 2011.
Last week Adoboli was found guilty of two cases of fraud and sent to prison for seven years.
The FSA found there were particular flaws with UBS' computerised systems and said there was a lack of concern from other parts of the business when Adoboli began reporting unusual trading patterns.
"UBS failed to question the increasing revenue of the desk and failed to ensure that there was a corresponding increase in the controls in place over the desk," said Tracey McDermott, director of enforcement and financial crime at the FSA. "As a result Adoboli, a relatively junior trader, was allowed to take vast and risky market positions, and UBS failed to manage the risks around that properly"
The fine would have been 30 per cent higher if UBS had not agreed to settle at an early stage. The bank has also agreed to invest £16m in a programme of remedial action.