The Financial Conduct Authority (FCA) has banned John Hughes from performing any regulated function in relating to huge losses incurred by a rogue trader.
Between 1 January 2011 and 14 September 2011 Hughes worked in the global synthetic equities division of the London branch of UBS and was the most senior trader on the ETF desk.
During that period Kweku Adoboli (pictured), another trader on the desk, undertook unauthorised trading which caused $2.3 billion in losses. Adoboli was sentenced to seven years' imprisonment in November 2012 after being found guilty of two counts of fraud.
Part of the unauthorised trading involved creating and using an undeclared fund of profits; Hughes was aware of the existence of this fund and that it was being used to misrepresent the desk’s profit and loss.
Hughes did not consider the fund to be honest and knew that UBS would not have authorised its use, according to the FCA.
The regulator stated that his conduct in relation to the fund was 'dishonest and demonstrates that he is not a fit and proper person to perform functions in relation to any regulated activity carried on by an authorised or exempt person'.
Tracey McDermott, the FCA's director of enforcement and financial crime, added: 'He should have been acting as a role model to others. Instead he failed to report the [fund] and allowed the desk’s profit and loss to be misstated over an extended period.
'This failure contributed to Adoboli’s unauthorised trading continuing unchecked. Approved people should operate to the highest standards of integrity. This means not only doing the right thing themselves but also challenging, and blowing the whistle on, those who are not. Hughes failed to do so with catastrophic consequences.'