|Chennai||Rs. 27580.00 (0.18%)|
|Mumbai||Rs. 28700.00 (0%)|
|Delhi||Rs. 27700.00 (0.73%)|
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Britain's financial regulator fined Swiss bank UBS 9.45 million pounds ($14.8 million) Tuesday for exposing customers to unacceptable risk in the selling of an investment fund and for failing to deal properly with complaints that followed.
The Financial Services Authority says UBS AG placed some 2,000 customers' money in a fund that the bank had not properly reviewed, the so-called AIG Enhanced Variable Rate Fund. When AIG ran into trouble in 2008 as a consequence of the global credit crunch and the collapse of investment bank Lehman Brothers, there was a run on the fund.
The FSA says that UBS failed to carry out adequate due diligence, "so UBS had an inadequate understanding of the nature of the fund's assets and the consequent risks."
"Firms such as UBS should be under no illusion about the standards expected of them," said Tracey McDermott, director of enforcement and financial crime. "UBS's conduct fell far short of what its customers deserved and what the FSA requires. It failed to ensure it understood the product it was selling, failed to recommend it to the right customers and failed to take effective action in the financial crisis when the problems with the fund came to the fore."
UBS agreed to settle at an early stage, entitling it to a 30 percent discount on its fine. The FSA would have imposed a financial penalty of 13.5 million pounds on UBS were it not for the discount.
UBS is one of the world's largest managers of private wealth. Its reputation has been hurt by an industry-wide investigation into the rigging of the benchmark London interbank offered rate, or LIBOR. UBS' standing was also dented by a London trial into a multibillion-dollar trading scandal and ongoing tax evasion probes.