Former-UBS trader to fight £1.25m fine from FSA

13 December 2011

A former trader at Swiss bank UBS is to contest a £1.25 million fine over unauthorised trading allegations by claiming the practice was ‘encouraged’ at the firm.

Sachin Karpe is expected to make the claim as part of his defence against accusations that his behaviour led to losses of $42.4 million at the institution.

The Financial Services Authority (FSA) has accused Mr Karpe and former UBS client advisor Laila Karan of making trades on a foreign exchange using client money.

Jonathan Crow, the FSA lawyer, said at a tribunal in London, which was quoted by the Daily Telegraph, said: “Karpe seems to be saying three things, that he had his clients’ implied consent, that the practice was widespread within UBS, and third, that the practice was encouraged.

“Karpe’s case is simply illogical ... UBS did not encourage unauthorised trading.”

Meanwhile, Kweku Adoboli, a former trader at UBS, was recently charged with unauthorised trading which caused losses of $2.3 billion.

The latter was charged with fraud and false accounting related to the losses.

By Jim Ottewill

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