LONDON (AP) — Britain's financial regulator has fined Swiss bank UBS 9.45 million pounds ($14.8 million) for exposing its customers to high-risk investments and for failing to deal properly with complaints that followed.
The Financial Services Authority says UBS AG placed some 2,000 customers in a fund called the 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."
Tracey McDermott, director of enforcement and financial crime, says UBS' conduct "fell far short of what its customers deserved."