The UK financial regulator has reportedly failed to extract a heavy misconduct fine from the former chief executive of UBS Wealth Management in the UK. UBS said it is pleased at the outcome.

The Financial Services Authority has reportedly failed in its bid to extract a hefty misconduct fine from John Pottage, former chief executive of UBS Wealth Management in the UK, over compliance failings.

The UK regulator had attempted to impose a £100,000 ($161,000) fine on Pottage for misconduct during his time as CEO of UBS Wealth Management UK between 2006 and 2007. The compliance lapses did not involve him personally and the keenly-watched test case was the first time the FSA had attempted to impose such a penalty for inadequate supervision rather than personal wrongdoing.

The Upper Tribunal for Financial Services instead found in favour of Pottage, ruling that he had taken ameliorative action concerning the Swiss banking giant’s systems and controls, according to a judgement seen by the Financial Times. The tribunal judged that the FSA had not established its case that Pottage had committed misconduct, but the judgement has yet to be made public.

For his part, Pottage argued that he had done his utmost to tighten up compliance at UBS, where he remains as an employee and is now a senior executive at the bank’s headquarters in Zurich. The tribunal agreed that he had acted reasonably.

“John Pottage and UBS take note of the decision of the Upper Tribunal. We are pleased with the outcome and that this matter is now closed,” the bank said in a statement today. UBS, which was an interested party in the case, rather than a defendant, has been prominent in its support for Pottage throughout the affair.

The FSA had not responded to requests from WealthBriefing for further comment at the time of publication.

The outcome of the Pottage case will probably be welcomed by UBS as marking the end to a long-drawn-out saga. Having acknowledged control weaknesses at its UK wealth management business, UBS compensated customers with a total of £42 million, and was fined £8 million by the FSA, in 2009.

However, UBS remains under regulatory investigation due to a separate incident last September, where the Swiss bank reported a $2.3 billion loss caused by unauthorised trading in its investment banking arm.