NEW YORK ( TheStreet) --T he Financial Industry Regulatory Authority (FINRA) fined UBS ( UBS) $12 million for "failing to properly supervise short sales of securities." In a press release Tuesday, FINRA described a UBS supervisory system as "significantly flawed," leading to "serious" violations of a trading rule known as RegSHO "across its equities trading business." RegSHO requires dealers such as UBS to have "reasonable grounds to believe that the security could be borrowed and available for delivery before accepting or effecting a short sale order," and to "mark sales of equity securities as long or short." UBS "is pleased to have resolved this matter. This investigation is concluded and all issues identified by FINRA and UBS have been remediated," read a statement from a UBS spokesman. UBS's trading operations recently grabbed headlines after Kweku Adoboli, an equity derivatives trader, was arrested and accused of losing $2.3 billion due to unauthorized trades. The fallout from the scandal included the resignation of CEO Oswald Gruebel last month. -- Written by Dan Freed in New York.