FSA loses supervision test case – The Financial Services Authority (FSA) has lost a test case involving UBS in which it tried for the first time to punish a senior manager for inadequate supervision rather than for errors he personally committed.
The FSA was seeking to fine John Pottage, the former chief executive of UBS’s UK wealth management division, £100,000 for misconduct after uncovering a series of compliance problems in the company.
But a London tribunal has cleared Pottage, according to a judgment seen by the Financial Times.
The full correspondence It rejected the FSA’s case against him by ruling he had taken steps to bolster UBS’s systems and controls.
The Upper Tribunal for Financial Services found that “the FSA has not established its case that Mr Pottage had committed misconduct”.
The FSA said Pottage, who became chief executive of the UK wealth management arm in September 2006, should have instigated a “root and branch” review of UBS’s operations and compliance procedures sooner.
But Pottage, supported by UBS which still employs him, argued he had done all he could to eradicate sloppy compliance.
The FSA is also investigating UBS after a $2.3bn loss from alleged unauthorised trades in September in an unrelated incident.
The decision is expected to be published on Monday.