The latest scandal to hit the banking world has led to renewed calls for the authorities to finally clamp down on malpractice by jailing traders. But will the foreign exchange fraud, the latest in a long list of malpractices, force banks to change their ways?
“In most businesses, the normal penalties for defrauding a customer include the risk of a jail sentence,” read a recent Financial Times editorial. “If the authorities really want to change the culture of the trading desk, criminal sanctions must become a more vivid possibility.”
Switzerland’s public prosecutor appears to have opened the door to this possibility by starting criminal probes into several people connected with forex fraud at UBS. The allegations of financial mismanagement and breaching banking secrecy laws carry respective penalties of up to five and three years in prison.
The Swiss Financial Market Supervisory Authority (FINMA) is also investigating 11 individuals, including managers, having until now only demanded that UBS hands back CHF134 million ($140 million) in fraudulently obtained profits.
This post was published at SwissInfo