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FSA refuses to reveal the identity of Mr X

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The UK’s financial sector regulator (FSA), has said it could not reveal the identity of Mr X. The mysterious Mr X, likely to be an Indian, had surfaced in a UK tribunal judgement last month in the matter of illegal trades at the wealth management desk of Swiss bank UBS in 2006 and 2007.

“Unfortunately we can't disclose the identity of Mr X,” FSA spokesperson said in an email response to queries sent by Business Standard.

He added the stringent measures taken by the regulator were intended to serve as “a deterrent” for others. “Our enforcement actions against UBS and other traders within the wealth management division and our attempts to take enforcement against the chief executive of UBS Wealth Management, John Pottage, are aimed as a deterrent for others in the industry,” Hamilton said.

FSA slapped a penalty of £100,000 on Pottage for alleged failure in his supervisory duties. But in April, Pottage was cleared of misconduct by UK Upper Tribunal for Financial Services that hears appeals against FSA penalties. However, in May, the tribunal had turned down the appeal of another UBS trader Sachin Karpe. It is in this judgment that first surfaced.

Mr X, as the person has been referred to by tribunal, denied he owned an account with the UK-based UBS Wealth Management, called Customer A account, used by some UBS officials to make large-scale unauthorised transactions. Mr X’s denial came in an interview with the FSA held in the presence of the Indian market regulator, Securities and Exchange Board of India (Sebi), according to the tribunal judgment.

The total value of these transactions works out to nearly $2.5 billion or roughly Rs 14,000 crore. In this account, UBS officials allegedly placed 321 foreign exchange trades between February 2007 and January 2008. “The trading comprised 192 trades on a US dollar sub-account with a total value of $1.5 billion and 129 trades on a British pound sub-account with a total value of £635.4 million (roughly $1 billion),” the tribunal said.

Answering a specific query on whether any action was initiated against Mr X for disowning his account, the FSA said,“We can't comment on Mr X but we are pursuing no one else in this case.” The regulator added it has stipulated requirements that firms have strong systems and controls in place to prevent conduct such as this. “We fined UBS £8m in relation to this case,” the FSA said referring to its decision in November 2009.

“There have been no changes for wealth management companies following this case and it is for firms themselves to make sure that they comply with all relevant rules for the jurisdictions in which they operate,” the spokesperson added.

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FSA refuses to reveal the identity of Mr X

The UK’s financial sector regulator Financial Services Authority (FSA), has said it could not reveal the identity of Mr X.

The UK’s financial sector regulator (FSA), has said it could not reveal the identity of Mr X. The mysterious Mr X, likely to be an Indian, had surfaced in a UK tribunal judgement last month in the matter of illegal trades at the wealth management desk of Swiss bank UBS in 2006 and 2007.

“Unfortunately we can't disclose the identity of Mr X,” FSA spokesperson said in an email response to queries sent by Business Standard.

He added the stringent measures taken by the regulator were intended to serve as “a deterrent” for others. “Our enforcement actions against UBS and other traders within the wealth management division and our attempts to take enforcement against the chief executive of UBS Wealth Management, John Pottage, are aimed as a deterrent for others in the industry,” Hamilton said.

FSA slapped a penalty of £100,000 on Pottage for alleged failure in his supervisory duties. But in April, Pottage was cleared of misconduct by UK Upper Tribunal for Financial Services that hears appeals against FSA penalties. However, in May, the tribunal had turned down the appeal of another UBS trader Sachin Karpe. It is in this judgment that first surfaced.

Mr X, as the person has been referred to by tribunal, denied he owned an account with the UK-based UBS Wealth Management, called Customer A account, used by some UBS officials to make large-scale unauthorised transactions. Mr X’s denial came in an interview with the FSA held in the presence of the Indian market regulator, Securities and Exchange Board of India (Sebi), according to the tribunal judgment.

The total value of these transactions works out to nearly $2.5 billion or roughly Rs 14,000 crore. In this account, UBS officials allegedly placed 321 foreign exchange trades between February 2007 and January 2008. “The trading comprised 192 trades on a US dollar sub-account with a total value of $1.5 billion and 129 trades on a British pound sub-account with a total value of £635.4 million (roughly $1 billion),” the tribunal said.

Answering a specific query on whether any action was initiated against Mr X for disowning his account, the FSA said,“We can't comment on Mr X but we are pursuing no one else in this case.” The regulator added it has stipulated requirements that firms have strong systems and controls in place to prevent conduct such as this. “We fined UBS £8m in relation to this case,” the FSA said referring to its decision in November 2009.

“There have been no changes for wealth management companies following this case and it is for firms themselves to make sure that they comply with all relevant rules for the jurisdictions in which they operate,” the spokesperson added.

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