"The investigation established that Desk Head ‘A’ and certain other employees on Desk X had engaged in and/or facilitated unauthorised foreign exchange (“FX”) and precious metals transactions by using certain international wealth management customers’ money without their authorisation and allocating any resulting profit or loss to the affected customers’ accounts. There was a high volume of FX transactions during the Relevant Period; UBS’ investigation identified approximately 50 such trades per day during 2006, which continued (at a reduced rate) throughout 2007." (source: FSA, UK)
- FX transactions could be executed by providing UBS’ FX traders with only an identifier for the trade and the details of the amount and the currency to be traded. Full details of the transaction, including the account number, could be provided to UBS’ FX traders up to 24 hours later. This allowed the performance of the trade to be assessed before Desk Head ‘A’ decided how any losses (or profits) should be allocated;
- FX trades that had already been executed and booked could be cancelled and then subsequently re-booked onto another customer’s account; and
- FX trades made nominally on behalf of a number of customers could be consolidated into a single trade with an ‘averaged’ price, thereby hiding the number of deals and the patterns of price."
The damage the bank had to compensate clients for was over 40million....
The oldest tricks in the book...
Money does bring out the worst in people eh....
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