Bloomberg News

LONDON — Paine Webber International (UK) Ltd. was fined $510,000 Wednesday by Britain’s Financial Services Authority for “serious compliance failures, including inadequate controls to prevent money laundering.”

The fine, the second-biggest imposed by the U.K. financial regulator, came after the division of UBS AG, Switzerland’s largest banking company, admitted that from January 1998 to December 1999 it “failed to organize and control its internal affairs in a responsible manner,” the FSA said in a statement. Paine Webber International “failed to implement and maintain adequate account opening procedures” and also did not record sufficient customer details, the FSA said. The compliance failures date from before Zurich-based UBS bought Paine Webber Group Inc. last year.

“Paine Webber is pleased to have this matter … concluded,” said UBS Warburg spokeswoman Sarah Small.

No customers were harmed, and no instances of money laundering were found, FSA spokesman Patrick Humphris said in an interview. “The firm did work cooperatively with us throughout,” he said. In addition to the fine, Paine Webber will pay $14,500 toward the FSA’s costs, he said.

The probe was begun by the Securities and Futures Authority, now a part of the FSA, which found that “the structure and resource of the firm’s compliance department was inadequate,” according to the statement.

The fine came after bank holding companies including UBS, HSBC Holdings PLC, and Citigroup Inc. said in October that they would do more to identify depositors as a way to prevent money laundering. The FSA said in March that the U.K. offices of 15 banking companies showed “significant control weaknesses” in handling $1.3 billion of accounts set up by former Nigerian leader Sani Abacha and his associates.

The Swiss banking regulator, the Federal Banking Commission, told Credit Suisse Group and other banking companies to tighten controls after 19 of them accepted more than $500 million of deposits from the Abacha family.

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