UBS, EUROPE’S largest investment bank, has sacked two financial advisers and disciplined nine others after an internal investigation found the bank had traded in shares against the interests of itsclients.

The Swiss giant is the most high-profile financial institution on this side of the Atlantic to be caught up in the crackdown by Eliot Spitzer, the New York Attorney General, on improper practices by fund managers.

The 11 UBS financial advisers had engaged in “market timing”. This is rapid trading of shares in mutual funds – known in the UK as unit trusts – to profit from pricing lags. The practice favours some clients such as hedge funds, often at the expense of long-term investors who are usually private individuals.

UBS banned its brokers from market timing in December 2001. It decided to conduct a review of whether employees were obeying “in light of the current environment”.

UBS refused to say whether others would be disciplined, saying the review was “largely complete but still ongoing”.

The bank also would not say whether it thought it would be the subject of legal action being prepared by Mr Spitzer against several fund managers.

Separately, Amvescap said it would probably be targeted by Mr Spitzer for the way its Invesco division had traded.

The Anglo-American fund manager said earlier this month that it had not received any notification from Mr Spitzer’s office about an intention to file legal action.

Several companies have tried to pre-empt Mr Spitzer by investigating themselves and sacking individuals who have engaged in market timing. They hope this will mitigate potential law suits from Mr Spitzer, America’s chief inquisitor into murky practices by financial institutions.

Old Mutual, the London-listed insurer, parted company with the founders of its US asset managemer, Pilgrim Baxter, ten days ago.

Alliance Capital Management, owned by French insurer Axa, sacked two senior executives who allegedly permitted the improper trading of mutual fund shares.

America’s Putnam Investments fired Lawrence Lasser, its chief executive, last week.

Security Trust, a Phoenix-based retirement plan administratory, yesterday became the first company to be ordered to shut down as a result of the mutual fund investigation. Three former executives were charged with fraud.