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Screenshot of a breaking news alert e-mail from Q2 2017
The Swiss Financial Market Supervisory Authority (FINMA) today announced that has issued industry bans of between one and five years against six managers and traders formally employed in the foreign exchange and precious metals business of UBS AG (SWX:UBSN).
The watchdog concluded that the six individuals were responsible for the breaches of regulation at UBS in this business, as first announced in 2014.
In November last year, FINMA started enforcement proceedings against 11 UBS managers and traders seeking to clarify their involvement in and knowledge of the misconduct in foreign exchange and precious metals trading at Opfikon in Zurich. While the regulator discontinued four enforcement proceedings in August 2015, it proceeded with a further six, coming to the conclusion that those concerned bore significant responsibility for the organisational shortcomings and improper conduct at UBS.
As a result, FINMA has issued industry bans against the then responsible heads of global FX trading and global FX spot trading, The bans prohibit the individuals in question from holding senior management positions at institutions supervised by FINMA for periods of four and five years respectively.
FINMA has also issued industry bans of at least one year against four FX and precious metals traders who worked on the spot trading desk in Opfikon.
Proceedings against one further UBS employee are continuing.
During its investigation FINMA found out that those responsible for the management of Forex trading tolerated, and even encouraged, behaviour that ran against the interests of clients. Although managers were aware that traders were able to use chat groups to share information and knew of the risks associated with this behaviour, they failed to put in place adequate systems and controls and to consistently monitor compliance with internal and external rules.
Traders shared confidential client information, sometimes revealing the identity of clients to third parties, deliberately triggered stop-loss orders and engaged in front running. They also repeatedly attempted to manipulate FX benchmarks.
You can view the official announcement from FINMA by clicking here.