GENEVA – UBS has revised upwards the amount of losses allegedly caused by unauthorized transactions at a young trader, indicted in Britain this week. The bank reported Helvetic 2.3 billion dollars in losses on Sunday, against two billion initially announced in mid-week.
“We have now covered the risk associated with unauthorized transactions and trading activity in shares resumes normal operation on its own pre-defined risk limits,” said a statement from the bank. “The loss from this case is 2.3 billion” dollars, said UBS. “As we stated earlier, no position has been affected customers.”
The trader UBS Kweku Adoboli, a young 31 year old man from Ghana, was indicted in Britain for fraud and false accounting on Friday. British justice has decided to keep him in custody until his next scheduled appearance on Sept. 22.
According to the bank discovered the loss this week, “the result of unauthorized transactions speculation on various index futures – S & P 500, DAX and EuroStoxx – over the last three months.” Still according to UBS, the broker, who worked in the business “Global Synthetic Equity” in London, would have taken “fictitious positions” to conceal these activities.
“These sham transactions that hid the transactions index futures were exceeding the risk of UBS,” said the statement from the bank.
“After investigation of the positions taken by the broker-led control functions at UBS, the latter revealed his unauthorized activity September 14, 2011,” the statement added.
The bank announced that its Board of Directors created a special committee to conduct an independent investigation into fraud and control mechanisms.
For its part, the head of UBS Oswald Grübel said he did not intend to resign. “I am responsible for everything that happens in the bank but I do not feel guilty,” he told the Sunday newspaper Helvetic “Sonntag”, Oswald Grübel, took office in 2009. He said he did “not think of a start”, as many left-wing politicians called for his resignation. But it is “the business of the board,” he said.
“If someone acts with criminal energy, you can do nothing, there will always be in our job,” noted Oswald Grübel.
Following the case, UBS has stopped all its advertising campaigns in the world. This freeze will last one to two weeks.