Fined UBS Wealth chief missed warning signs – FSA

A former chief executive officer of UBS AG’s wealth management unit who is challenging a £100,000 fine from the UK’s Financial Services Authority was yesterday accused of failing to control the activities of his team, allowing them to make up to 50 unauthorised trades per day.

John Pottage did not heed warning signs that risk controls in his division were ineffective after he became CEO, lawyers for the FSA said yesterday.

UBS was fined £8m by the regulator in 2009 for the breaches, but Pottage’s £100,000 personal fine represents the first time an executive has been penalised for oversight failures.

Pottage, now a senior executive at the bank’s headquarters in Zurich, should have started a review of controls after a client money breach, a payment fraud, and other failings were discovered, the FSA said in the first day of closing arguments in the case on Wednesday, reports Bloomberg.

He failed to ensure the division had controls in place to prevent employees from making as many as 50 unauthorised trades a day with funds from a number of customer accounts, the FSA alleges.

The Swiss bank is supporting Pottage in challenging the fine against him.

The case is one of three challenges by individual bankers from UBS’s wealth management unit in London against FSA enforcement actions.

 

This article was first published on Investment Week

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