The Financial Services Authority (FSA) has fined Swiss banking giant UBS £8m for failing to stop its employees making unauthorised transactions.

The FSA said four UBS employees had carried out the transactions using customer money on at least 39 accounts.

The unauthorised activities took place between January 2006 and December 2007. The FSA also said the trades involved foreign exchange and precious metals.

In a statement, UBS said it "deeply regrets this incident".

"Having fully co-operated with the FSA’s investigation, we are now pleased that this matter has been settled so that we can move forward," the bank said, adding it had already taken full steps to deal with the problem.

Earlier this week, UBS reported a loss for the July to September quarter.

‘Steep penalties’

According to the FSA, an internal UBS investigation found that as many as 50 unauthorised transactions a day were taking place at the operation’s peak.

It criticised the bank not only for systems failures that led to the trades, but also for not responding to "several warning signs" that the systems were not working.

"These employees were able to take advantage of UBS’ inadequate systems and controls, giving them free rein to make unauthorised trades with customer money that they were then able to conceal," said the FSA’s director of enforcement and financial crime, Margaret Cole.

"The penalty, one of the largest fines we have levied, reflects our tougher enforcement stance and our policy of imposing steep penalties to achieve credible deterrence."

The £8m fine is the third largest imposed by the FSA.

The regulator said that UBS agreed to settle at an early stage of its investigation, allowing the bank to qualify for a 20% discount.

Without the discount, the fine would have been £10m.

Last month, Switzerland’s stock exchange said it was investigating UBS for possible breaches of public disclosure rules during the financial crisis.

Earlier this year, UBS was accused of helping Americans evade US taxes by opening accounts in Switzerland.

Source: BBC News