UBS fined in UK for investment fund debacle

Britain's financial watchdog on Tuesday handed UBS a £9.45-million ($14.7-million) fine for exposing investors to unacceptable risk when it sold an AIG investment fund.

UBS fined in UK for investment fund debacle
Photo: UBS

"The Financial Services Authority (FSA) has fined UBS AG for failures in the sale of the AIG enhanced variable rate fund," it said in a statement.

"These failures led to UBS customers being exposed to an unacceptable risk of an unsuitable sale of the fund," the authority said.

"UBS also failed to deal properly with complaints from customers about sales of the fund."

The FSA added that UBS had sold the fund to 1,998 high net worth customers, between December 2003 and September 2008, with investments totalling about £3.5 billion.

However, the values of some of the assets in the fund — which invested in financial and money market instruments — plunged dramatically when the global financial crisis struck.

The FSA said there was a run on the fund when Lehman Brothers applied for Chapter 11 bankruptcy protection in the US on September 15th 2008, and as US insurance giant AIG saw its share price collapse.

The fund was then suspended, with customers prevented from withdrawing their cash, due to the large number of investors seeking to cash out.

The FSA added on Tuesday that UBS had agreed to conduct a redress programme for customers who remained in the fund at the time of its suspension.

The Swiss bank was expected to pay compensation of around £10 million.

"UBS's conduct fell far short of what its customers deserved and what the FSA requires," added Tracey McDermott, the FSA's director of enforcement and financial crime, in the statement.

"It failed to ensure it understood the product it was selling, failed to recommend it to the right customers and failed to take effective action in the financial crisis when the problems with the fund came to the fore."

The fine is just the latest in a string of penalties paid by UBS, including fines totalling1.4 billion francs for the bank's role in the Libor rate fixing scandal.

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Germany cracks down on fake Covid vaccine documents

German police have set up a special team to fight a growing number of forged vaccine certificates being sold in the black market

Germany cracks down on fake Covid vaccine documents
People who are fully vaccinated can show their vaccination booklet, which has a stamp and a sticker inside. Photo: Ina FASSBENDER / AFP

Police in Cologne have warned of a group of fraudsters selling fake vaccination certificates, a growing problem the scale of which is still unclear.

The police said the fraudsters worked in encrypted Telegram chats, making investigations difficult, and were selling fake documents with all the stamps and signatures, including a mark about vaccination with BioNTech or AstraZeneca.

READ ALSO: Germany probes Covid-19 testing centres for fraud

The fraud involved both real traffic in fake documents as well as scams luring customers into paying €100.

People in Germany who are fully vaccinated can show their vaccination booklet, which has a stamp and a sticker inside. Those who don’t have a booklet get a piece of paper.

Covid health passes are currently being rolled out across the EU, with a European health passport expected to be available from mid-June.

READ ALSO: What’s the latest on how the EU’s ‘Covid passports’ will work for travellers?

Over 44% of the adult population in Germany has received at least one dose of the Covid-19 vaccine, and more than 18% of Germans have been fully vaccinated.

German police have said forged coronavirus vaccine documents are becoming an increasing problem.

Last month, a couple in Baden-Württemberg was accused of selling fake coronavirus vaccination certificates.