Swiss bank UBS set to pay large fine for rogue trader scandal
London, United Kingdom (4E) – British regulators are expected to slap UBS with a large fine after failing to stop the fraudulent and unauthorized trading of former trader Kweku Adoboli that led to $2.3bn in losses for the Swiss bank.
The Swiss regulator, Finma, has completed its enforcement action and now awaiting the final penalty details set by UBS and UK’s Financial Services Authority (FSA) which is expected to range between £20m and £50m. A joint statement is expected to be released as early as next week.
A Southwark Crown Court jury convicted Adoboli on Tuesday ending a 10-week trial for fraud and false accounting. He was found guilty of two counts of fraud while he was acquitted of four counts of false accounting.
In September 2011, both the FSA and UBS announced a joint investigation after the bank revealed that Adoboli, then director on the bank’s Delta One desk, lost more than $2bn. The results of the probe was delayed pending the outcome of his criminal trial.
UBS also faces probe in other continents for its role in the Libor manipulation scandal where it could pay a huge penalty. The bank has decided to get out of the investment banking business, which could lead to around 10,000 job losses over the next several years.