The FCA has banned former UBS trader John Hughes for failings related to $2.3bn (£1.4bn) unauthorised trading losses.
In November 2012 UBS trader Kweku Adoboli was found guilty of two counts of fraud and jailed for seven years after losing £1.4bn of the bank’s money.
The FCA has now found that Hughes, who was the most senior person on the exchange traded funds desk on which Adoboli worked, is not a fit and proper person. The regulator has banned Hughes from performing any function in relation to any regulated activity in the financial services industry.
Between January and September 2011, Hughes worked in the global synthetic equities division of the London branch of UBS.
Part of the unauthorised trading carried out by Adoboli involved creating and using an undeclared fund of profits, termed the “umbrella”, which had the effect of manipulating the desk’s reported profit and loss.
Hughes was aware of the existence of the umbrella and that it was being used to misrepresent the desk’s profit and loss.
FCA director of enforcement and financial crime Tracey McDermott says: “Hughes should have been acting as a role model to others. Instead he failed to report the umbrella and allowed the desk’s profit and loss to be misstated over an extended period.
“This failure contributed to Adoboli’s unauthorised trading continuing unchecked.
“Approved people should operate to the highest standards of integrity. This means not only doing the right thing themselves but also challenging, and blowing the whistle on, those who are not. Hughes failed to do so with catastrophic consequences.”