The $2.3bn loss exposed faults in UBS’s risk controls three years after the Zurich-based bank had to be rescued by the state because of record losses tied to U.S. subprime mortgage securities. Oswald Gruebel, the former bond trader who joined as CEO in 2009, exited after saying he was shocked that one trader could inflict so much damage. Sergio Ermotti, his replacement, deepened and broadened an overhaul at the investment bank Gruebel had begun.
'The trading loss accelerated and maybe gave the necessary internal political impetus to implement the resulting structural changes', said Florian Esterer, a fund manager at MainFirst Schweiz AG in Zurich. 'But they would have happened anyway'.
Adoboli, who joined the bank in 2003, initially said in an e-mail to a UBS accountant that he had booked fake hedges to hide the risk of his actions. He argued at trial that he was encouraged by superiors to exceed risk limits as he made profits from unauthorized trades. He said nothing he did was dishonest and he intended to make money for the bank.
Hit the link below to access the complete Bloomberg article:
Adoboli Trading Loss Hastened UBS Investment-Bank Retreat
Ex-UBS Trader Adoboli Gets 7-Years in Prison
Martoma Fund Used Dark Pool to Keep Inside Trade Quiet, SEC Says
image: © thetaxhaven
The Alchemists: Three Central Bankers and a World on Fire
Hubris: How HBOS Wrecked the Best Bank in Britain
