Financial regulators in the UK have slapped a hefty fine on Swiss banking giant UBS. It's meant as a punishment for the lender's failure to prevent a rogue trader from losing billions in high-risk deals.
Swiss bank UBS on Monday was fined 29.7 million British pounds ($47.6 million, 36.7 million euros) by UK regulators after investigations connected with the fraud committed by a rogue trader.
A 32-year-old ex-employee, Kweku Adoboli, was sentenced to seven years in jail last week after costing UBS some 1.4 billion pounds in bad investment deals.
Britain's Financial Services Authority sharply criticized procedural weaknesses at UBS' London branch, saying management systems and internal controls were "seriously defective."
Also on Monday, Swiss financial watchdog FINMA announced it would in future keep an eagle eye on UBS' investment banking activities, adding that tough controls would be put into place to prevent large-scale fraud in future.
FINMA ruled that bigger investment decisions at UBS would have to be officially approved by responsible state authorities.
Swiss regulators demanded that UBS' risk-prone investment banking activities needed to be gradually reduced over the next couple of years, also announcing a ban on new acquisitions until further notice. FINMA said it would look into whether UBS' core capital would have to be increased so it could better cover any future operational risks.
hg/msh (dpa, AP, AFP)