The FSA said Pottage failed to prevent unauthorized trades at the wealth management unit, carry out an adequate initial assessment of the business practices at the unit and monitor them consistently in a submission to the London court.
The regulator said if Pottage would have assessed the practices he would have identified serious flaws in the design and operational effectiveness of the unit’s governance and risk management frameworks.
Pottage’s lawyer Guy Philipps challenged the fine saying his client tried to improve the systems and controls in the unit when he took charge as CEO in September 2006 and does not deserve the fine.
FSA fined UBS in 2009, 8 million pounds for not preventing its international wealth management personnel from making 50 unauthorized trades a day with funds from 39 customer accounts, third largest penalty levied by the regular that time.
The fine is being challenged at a London hearing that started on November 14.