Cumming has been fined £35,000 and prohibited from performing any regulated function for a minimum period of five years on the grounds that he is not fit and proper.

Paperwork signed by Cumming, who worked in UBS' international wealth management business, helped to document false loans which were used to conceal losses arising from unauthorised trading.

Customers whose funds were used were told they were providing loans to other UBS customers with promises of high rates of interest. To make these 'loans' appear official, documents were produced using UBS headed paper and sent to customers stating that the 'loans' were guaranteed by the firm.

The FSA's investigation concluded that Cumming signed these documents on seven occasions between October 2005 and October 2007 having been asked by a senior colleague to do so, even though he knew the 'loans' were not authorised by UBS.

By late 2007, Cumming was fully aware that the 'loans' were being used to conceal losses which had arisen as a result of unauthorised transactions but he failed to escalate this knowledge. Instead, Cumming signed a further 'loan' and allowed the ruse to continue.

Margaret Cole, FSA director of enforcement and financial crime, said: "Cumming deliberately misled UBS and its customers. Although he did not stand to make a personal gain, his complicity allowed a colleague to continue making unauthorised trades, while the losses continued to mount up.

"We are committed to deterring behaviour of this kind by banning and fining anyone found to have committed such misconduct."

In setting the financial penalty, the FSA took into account the fact that Cumming did not initiate the circumstances which led to his misconduct, nor did he conduct any of the unauthorised transactions. Because he agreed to settle at an early stage of the FSA's investigation he qualified for a 30% discount in respect of his financial penalpenalty. Cumming also proved to the FSA that he is in serious financial hardship, entitling him to a further discount.

If it wasn't for the settlement discount and Cumming's hardship, the FSA would have imposed a financial penalty of £100,000.

Cumming worked at UBS' London branch from 1999 until March 2008, when he was dismissed for gross misconduct relating to this case.

Earlier this month, the FSA fined UBS £8million for systems and controls failures that allowed employees to carry out unauthorised transactions with customer money. UBS has since repaid the affected customers in excess of US$42 million by way of redress.