FSA bans and fines UBS client adviser £35,000
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The FSA has banned and fined Andrew Cumming, a former client adviser at UBS, £35,000 for his role in the activities that led to the firm receiving an £8m fine earlier this month.
Earlier this month, the FSA fined UBS £8m for systems and controls failures that allowed employees to carry out unauthorised transactions with customer money.
Cumming has been fined £35,000 and prohibited from performing any regulated function for a minimum period of five years on the grounds that he is not fit and proper.
Paperwork signed by Cumming, who worked in UBS’ international wealth management business, helped to document false loans which were used to conceal losses arising from unauthorised trading.
Customers whose funds were used were told they were providing loans to other UBS customers with promises of high rates of interest. To make these loans appear official, documents were produced using UBS headed paper and sent to customers stating that the loans were guaranteed by the firm.
The FSA’s investigation concluded that Cumming signed these documents on seven occasions between October 2005 and October 2007 having been asked by a senior colleague to do so, even though he knew the loans were not authorised by UBS.
By late 2007, Cumming was fully aware that the loans were being used to conceal losses which had arisen as a result of unauthorised transactions but he failed to escalate this knowledge.The FSA says instead, Cumming signed a further loan and allowed the ruse to continue.
Cumming was dismissed in March 2008 for gross misconduct relating to this case.
Cumming qualified for a 30 per cent discount because he settled at an early stage of the investigation and proved to the FSA that he is in serious financial hardship, entitling him to a further discount.
Without the discounts the FSA would have imposed a financial penalty of £100,000.
FSA director of enforcement and financial crime Margaret Cole says: “Cumming deliberately misled UBS and its customers. Although he did not stand to make a personal gain, his complicity allowed a colleague to continue making unauthorised trades, while the losses continued to mount up.
“We are committed to deterring behaviour of this kind by banning and fining anyone found to have committed such misconduct.”
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