Britain’s financial watchdog fined broker PaineWebber, now part of Swiss bank UBS, £350,000 sterling today for gaps in its internal controls, including inadequate measures to prevent money laundering.
The Financial Services Authority said in a statement the fine, plus £10,000 in costs, was the second biggest imposed by its offshoot the Securities and Futures Authority.
The FSA said PaineWebber International (UK) Limited, the UK subsidiary of the US-based brokerage, had been severely reprimanded for failures between January 1st, 1998 and December 15th, 1999 - before PaineWebber's acquisition by UBS last year.
"The firm exposed itself to the risk of money laundering although fortunately no instances of money laundering have been identified," the FSA said.
It added there was no evidence customers had been harmed.
PaineWebber was not immediately available for comment but the FSA said the company had admitted that it breached its rules by failing to organise and control its internal affairs in a responsible manner .
The biggest fine imposed by the SFA was a £375,000 penalty on metals trader Rudolf Wolff & Co for its part in a 1996 copper scandal. In the biggest fraudulent failure in corporate history, Sumitomo Corp incurred losses of $2.6 billion and Japan jailed rogue trader Yasuo Hamanaka.