pounds 3m fine for UBS's Jersey private bank

CANTRADE private bank Switzerland (CI), the Jersey-based subsidiary of Swiss banking giant UBS, has been fined pounds 3m for criminal recklessness by the island's Royal Court.

In addition to the fine, by far the largest ever imposed by the court, the bank was ordered to pay costs of pounds 300,000.

Cantrade had admitted four charges of criminal recklessness by making misleading statements - the first time, it is understood, that a leading European bank has admitted such offences.

Also sentenced in connection with what has become known as "the Cantrade affair", in which 84 international investors claimed to have lost $27m (pounds 16m), were currency trader Robert Young, 44, who was jailed for four and a half years, and former Touche Ross partner Alfred Williams, 49, who received 18 months. Both were found guilty after a 22-day trial of making misleading, false or deceptive statements to investors.

Richard Syvret, director of Jersey's Financial Services Department, confirmed the regulatory authorities would now review Cantrade's licence to operate in the island, though this will not affect allied banking operations including that of the recently registered full branch of UBS.

In 1994 Jersey's Finance and Economics Committee refused a request from the investors to undertake an investigation into Cantrade, a decision that has since led to a civil action being brought against the committee.

The investors lost money in currency deals carried out in Jersey by Young through Cantrade. Young, an independent trader originally from Nottingham, reported he was making healthy profits for the investors when in fact he was incurring huge losses. Williams, a former taxi driver and partner with Touche Ross's Nottingham branch, produced documents purporting to audit the false trading figures.

The sentences bring to an end Jersey's costliest and longest fraud trial, which took four years to investigate.