UBS set to face regulator fine of up to £50m for Adoboli loss

Michael Bow
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REGULATORS are closing in on a deal to fine Swiss bank UBS millions of pounds over its $2.3bn (£1.4bn) trading loss, following the conclusion of the criminal trial against its former rogue trader Kweku Adoboli earlier this week.

UK regulator the Financial Services Authority and its Swiss counterpart, the Swiss Financial Markets Authority (FINMA), are to conclude their enforcement action against UBS, which was launched in February, after being hamstrung by the City of London Police and Crown Prosecution Service’s prosecution of Adoboli.

The FSA’s fine could be on a par with its record £59.9m fine handed down to Barclays in June over Libor rigging. However it is understood the bank is currently negotiating a fine in the region of £20m to £50m.

The bank has already been forced to pay $20m (£12.5m) by the FSA after it was hit by a Section 166 notice after the trading loss scandal broke in September 2011. This forced it to appoint an independent auditor, subsequently KPMG, to carry out an investigation into the firm’s activities and pay for the audit. FINMA has no power to fine UBS but it could choose to impose increased supervision of the bank.

Adoboli was convicted on Tuesday on two counts of fraud and cleared on four counts of false accounting. Adoboli racked up huge unauthorised losses on the bank’s trading account over the summer of 2011.