We use cookies to provide you with a better experience. If you continue to use this site, we'll assume you're happy with this. Alternatively, click here to find out how to manage these cookies

hide cookie message
UBS: Our risk systems did detect £1.3bn rogue trader

UBS: Our risk systems did detect £1.3bn rogue trader

But the warnings were ignored, bank claims

Article comments

UBS has insisted its IT systems did detect unusual and unauthorised trading activity, before rogue trader Kweku Adoboli ran up a $2 billion (£1.3 billion) loss on the bank’s derivatives desk.

Interim chief executive Sergio Ermotti, who is running the company following Oswald Grubel’s resignation last month, sent a memo to employees saying the bank is aware that its systems did detect the rogue activity.

In the memo, seen by the Wall Street Journal, Ermotti wrote: “Our internal investigation indicates that risk and operational systems did detect unauthorised or unexplained activity but this was not sufficiently investigated nor was appropriate action taken to ensure existing controls were enforced.”

He added: “We have to be straight with ourselves. In no circumstances should something like this ever occur. The fact that it did is evidence of a failure to exercise appropriate controls.”

The news comes as the heads of UBS’ global equities business, Francois Gouws and Yassine Bouhara, also resigned.

Meanwhile, regulatory and internal investigations continue into the problem.

“Criminal law prevents us from disclosing detailed information at the moment,” Ermotti wrote. He added that the company was taking “immediate and decisive action based on the findings of our own review of what happened”.

The bank insisted it was working to improve its risk and control framework, adding that it was clarifying rules and processes.

Rogue trader: How UBS systems and controls failed to stop a £1.3bn loss

Share:

Comments

  • Sid thats because he wasnt a rogue trader until he LOST money - when he was MAKING money he was genius whos algorithms were simply too complex for you to understand
  • emunfred The smoke alarm went off but the managers put pillows over their heads and went back to sleep They survived the fire but we will be asked to pay for the new house
Advertisement
Send to a friend

Email this article to a friend or colleague:


PLEASE NOTE: Your name is used only to let the recipient know who sent the story, and in case of transmission error. Both your name and the recipient's name and address will not be used for any other purpose.


ComputerworldUK Knowledge Vault

ComputerworldUK
Share
x
Open
* *