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.'