The UK Financial Services Authority has slapped UBS AG with an £8 million fine for not stopping employees from making unauthorized trades using customer money without their permission.

Four employees at London-based wealth management business were involved in the unauthorized activity, which took place between January 2006 and December 2007.

Employees involved traded in foreign exchange and precious metals using some 39 different customers' accounts without their permission and allocated losses to the concerned accounts. The FSA said that the lender could not manage and control key risks at its business and showed that its control was poor.

Speaking on the issue, Margaret Cole, enforcement director at FSA, "These employees were able to take advantage of UBS' inadequate systems and controls, giving them free rein to make unauthorised trades with customer money that they were then able to conceal."

The fine is the third-largest ever levied by the FSA

The largest ever fine levied by the FSA was £17 million on Royal Dutch Shell in 2004. Second-largest fine of £13.9 million was slapped on Citigroup in 2005.