FSA Fines UBS £9.45 Million for Failings in AIG Fund Sales

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On February 12, the FSA published a final notice issued to UBS AG, setting out a fine of £9.45 million in respect of failings identified in its sale of the AIG Enhanced Variable Rate Fund (the Fund). Having reviewed sales of the Fund made by UBS to 33 customers, the FSA identified that 19 of those customers were mis-sold the Fund, with a considerable risk that 12 of the remaining 14 may also have been mis-sold the fund.

The FSA found that UBS was in breach of a number of conduct of business rules, including:

  • Principle 9 of the FSA’s Principles for Business (failure to take reasonable care to ensure suitability of advice).
  • Principle 6 of the FSA’s Principles for Business (failure to treat its customers fairly and pay due regard to their interests).
  • FSA’s Dispute Resolution: Complaints Sourcebook and Principle 6 (failure to assess complaints fairly).

As a result of agreeing to settle at an early stage, UBS qualified for a 30% discount on what would otherwise have been a £13.5 million fine.

 

Written by:

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Orrick - Structured Finance Group on:

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