The FSA has banned and fined a former UBS client adviser £150,000 for circumventing securities rules.
Jaspreet Singh Ahuja was a client adviser within UBS’s international wealth management business in London.
Between January 1, 2006 and January 30, 2008 he used a pre-existing investment structure to enable an Indian resident customer to breach Indian law in clear contravention of UBS guidelines, via an investment fund incorporated in Mauritius.
The customer invested over US$250m in the fund.
Under Indian law, an Indian investor, whether resident or non-resident in India, is not permitted to invest in Indian securities through a vehicle known as a “foreign institutional investor” except in particular circumstances. Such vehicles are designed so that non-Indian investors may make investments in Indian securities.
Ahuja tried to hide the true nature of the customer’s investment, mainly through repeatedly providing false and misleading information to the UBS legal and compliance department and other parts of UBS.
He also assisted in making unauthorised redemption payments out of the fund knowing the redemptions were not properly authorised by the customer and breached UBS internal compliance rules.
FSA acting director of enforcement and financial crime Tracey McDermott says: “Ahuja’s failings were significant. He exploited his position of trust and repeatedly lied to his compliance department while helping a customer circumvent Indian law. This sort of behaviour has no place in the financial services industry.
“This substantial fine and the ban from working in the financial services industry are significant penalties and should serve as a reminder that such behaviour is woefully short of that expected of approved persons and will not be tolerated.”
In November 2009 the FSA fined UBS £8m for systems and controls failures in relation to this case. UBS has since repaid the affected customers over US$42m in redress.