Paine Webber fined for compliance failure

The UK arm of the international stockbroker, now part of UBS, was severely reprimanded for failing to comply with the Financial Services Authority?s requirement that a firm should have adequate internal controls.

The fine is the second largest ever imposed by the SFA, which is now part of the FSA.

As part of the ruling, Paine Webber admitted it had exposed itself to the risk of money laundering although no instances had been identified.

The stockbroker had failed to implement and maintain adequate account opening procedures and, in particular, had failed to obtain and record sufficient evidence of customer details.

It also admitted the structure and resource of the firm’s compliance department was inadequate.

A spokesman for Paine Webber said the firm was pleased the matter was now concluded. He said: ‘We have co-operated fully with the SFA during the investigation.’

He added that the entity of Paine Webber no longer existed as it was now part of the UBS group, and that a number of executives involved with compliance were no longer with the firm.

‘This was a failure in compliance, not audit or reporting,’ he said.

The ruling related to the period between January 1998 and December 1999.Reporting accountants were appointed to investigate the compliance failures in January 2000.

UBS bought the firm in November 2000.


Securities and Futures Authority

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