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The FSA has issued a final notice in the matter of Andrew Cumming, a former employee of UBS in London who was fired for gross misconduct earlier last year.

The Cumming case has made financial headlines in the UK, partially because of the bank involved, UBS which was fined £8 million this year for control failures, but also because of the nature of the case itself.

Cumming was asked by a senior colleague to sign letters to UBS wealth management clients, advising them that their money was being loaned to other UBS clients.  The letters were on UBS letterhead and purported that UBS guaranteed the loans which would earn a better rate of return for the clients.

In fact, the loans were being made to disguise unauthorised trading and Cumming was involved on no less than 7 occasions in this deceit over a period of approximately two years.

Cumming did not stand to gain anything from the affair.

It should also be noted that this is also a purely civil matter (i.e. it is not a criminal case).

The FSA acknowledges Cummings had no direct involvement in the fraud but did become complicit in it after the fact.  The FSA fined Cumming £35,000 but applied a discounting calculation to take into account cooperation and the poor financial circumstances which Cumming now experiences.

In fact, if discounting had not been applied, the fine would have been £100,000.

Cumming was also banned from performing any regulated financial function for five years.

Margaret Cole, FSA Director of Enforcement and Financial Crime, stated, “Cumming deliberately misled UBS and its customers… his complicity allowed a colleague to continue making unauthorised trades, while the losses continued to mount up.”

The FSA press release is here

ComplianceAsia is the leading news source for insight and analysis of financial regulatory developments in the US and UK.  The original article is here.

 

 

Tags: Andrew Cumming, compliance, fine, FSA, UBS, unauthorised loans