UPDATE 1-UBS Canada unit reports 'inadvertent' trading

April 13 Fri Apr 13, 2012 5:20pm EDT

April 13 (Reuters) - UBS AG's Canadian unit said it "inadvertently" acquired 1 million class A shares of Air Canada, increasing its ownership in the air-carrier beyond the 20 percent threshold permitted under Canadian law.

The shares were bought as part of regular activity to facilitate client trading, UBS Securities Canada said in a statement adding that it did not seek to control or influence Air Canada at any point.

The trade, which was executed on Feb. 23, raised the bank's ownership in Air Canada's Class A shares to 20.4 percent from 18.6 percent, it said in a statement.

The bank has now reduced its ownership to 14.5 percent of Air Canada's class A shares, but it did not reveal when it cut its stake.

The brokerage said it reported the trading error to Quebec's financial regulator Authorité des marchés financiers, and regulatory authorities in other jurisdictions.

"UBS Canada takes this matter seriously and has implemented remedial steps to address the error," it said.

Late last year, UBS had reported unauthorized deals by a "rogue" trader at its London unit that cost the bank about $2 billion in losses.