The FCA has banned John Christopher Hughes from performing any function in relation to the regulated activity in the financial services industry for failings related to the US$2.3 billion unauthorised trading losses by another trader, Mr Adoboli.
Between 1 January 2011 and 14 September 2011, Mr Hughes worked in the Global Synthetic Equities division of the London branch of UBS AG.
Mr Adoboli was sentenced to seven years’ imprisonment in November 2012 after being found guilty of two counts of fraud by abuse of position, according to the FCA.
Part of the unauthorised trading involved creating and using an undeclared fund of profits, termed the ‘Umbrella’, which had the effect of manipulating the ETF desk’s reported profit and loss.
Tracey McDermott, the FCA’s director of enforcement and financial crime, said, “Hughes was the most senior person on the exchange traded funds desk. He should have been acting as a role model to others.”
“Instead, he failed to report the Umbrella and allowed the desk’s profit and loss to be misstated over an extended period. This failure contributed to Adoboli’s unauthorised trading continuing unchecked. Approved people should operate to the highest standards of integrity,” said Ms McDermott.
“This means not only doing the right thing themselves but also challenging, and blowing the whistle on, those who are not. Hughes failed to do so with catastrophic consequences,” she said.
Uh this seems like a big scapegoat. How many UBS execs have been punished over this? Seems like zip!