The market regulatory agency has also ordered the Swiss lender to pay additional £10m in compensation to 565 customers, who invested nearly £816m in risky savings products.
According to the FSA investigation, the bank marketed the investment fund to 1,998 high net worth customers, with initial investments adding up to almost £3.5bn.
During the 2008 financial crisis, AIG’s share price suddenly declined when Lehman Brothers filed bankruptcy protection in the US and that led to rush for withdrawal of funds.
The watchdog during a sample review found that out of 33 funds sold, 19 were mis-sold and a considerable risk that 12 of the remaining 14 may also have been in a similar deal.
FSA enforcement and financial crime director Tracey McDermott said that the bank failed in various ways such as, better understanding of the product it was selling, recommend it to the right customers and to take effective action in the financial crisis.
UBS has agreed to settle the charges at an early stage, subsequently availed 30% discount on its fine; otherwise the fine would have been £13.5m.
