The Swiss Financial Market Supervisory Authority (FINMA) issued a plethora of industry bans against six foreign exchange (FX) and commodities traders at UBS, according to a FINMA statement.
In particular, the Swiss regulator levied bans ranging from one to five years against a total of six traders and managers at UBS. FINMA had concluded that each of the individuals were instrumental in facilitating breaches of regulation at UBS, as far back as of 2014 – furthermore, four other enforcement proceedings against UBS traders were discontinued in August 2015, a testament to the amount of scrutiny the bank has faced over the past couple of years.
The investigation has its roots in a November 2014 probe by FINMA that initially began enforcement proceedings against eleven UBS managers and traders. The aim of the process was to clarify their respective involvement and plausibility of misconduct in FX and precious metals trading at Opfikon in Zurich.
Despite the discontinuation of several proceedings, FINMA soldiered forth with the remaining individuals, eventually coming to the conclusion that the trader and managers bore a responsibility for the serious organizational shortcomings, improper conduct, and breaches at UBS.
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Subsequently, FINMA used its mandate to issue industry bans against the accused, which included UBS’ heads of global FX trading and global FX spot trading, prohibiting them from holding senior management positions at institutions currently supervised by FINMA for periods of four and five years respectively.
In addition, FINMA has also announced industry bans of a period lasting at least one year against four FX and precious metals traders previously employed on the spot-trading desk in Opfikon. That being said, proceedings are still active against one additional UBS employee, though it is worth noting that none of the aforementioned individuals are still active at UBS.
Amongst the many accusations comprising the ruling, FINMA found that UBS managers failed to implement adequate systems and controls, especially to consistently monitor compliance with internal and external rules. Conversely, traders also improperly shared confidential client information, which at times showed the identity of clients to third parties.
Earlier this month, FINMA published a communique on its website which exposed a new entity – AlgoBanque – claiming on its website to have an office in the country. AlgoBanque’s website falsely asserted that the company is based in Geneva, when in reality its roots are most likely offshore. This was just one of many fraudulent internet entities to have been systemically abusing the vulnerability of trustworthy clients, soliciting them to deposit into different types of forex and binary options brokers or managed accounts setups.