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Paine Webber fined $508K
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August 22, 2001: 7:09 p.m. ET
British regulators set fine on UBS unit for failing to prevent money laundering
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NEW YORK (CNNfn) - British financial regulators fined Paine Webber International Ltd. £350,000 ($508,305) Wednesday for failing to adopt compliance controls and practices to prevented money laundering.
The Securities and Futures Authority (SFA), a unit of the Financial Services Authority in the United Kingdom, severely reprimanded the unit of UBS AG. SFA ruled that from Jan. 1, 1998 to Dec. 15, 1999, Paine Webber failed to organize and control its internal affairs, exposing itself to a risk of money laundering.
The £350,000 fine is the second-largest ever imposed by the SFA, the regulator said in a statement. Paine Webber could not be reached for comment.
Swiss bank UBS AG (UBS: up $1.29 to $48.71, Research, Estimates) bought U.S. brokerage house Paine Webber Group Inc. for about $10.8 billion last summer.
The UBS unit did not implement and maintain controls governing the opening of customer accounts and in particular did not obtain and record sufficient evidence of customer details, the SFA charged.
Paine Webber failed to adequately identify and record compliance issues, did not train and supervise staff, and did not maintain an adequate record keeping system.
Paine Webber admitted that through the time period it failed to organize and control its internal affairs responsibly, the SFA said.
However, no instances of money laundering occurred and no customers were harmed, the SFA said. Paine Webber, which cooperated throughout the probe, will contribute £10,000 to SFA's costs, the British regulators said. 
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