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UBS CEO not resigning, loss mounts to USD 2.3 billion

Last updated: 19 September, 2011
Geneva, Sep 18, (AP):

Oswald Gruebel, the chief executive of UBS, has dismissed calls for his resignation as politically motivated, even as the Swiss banking giant raised its estimated loss by a rogue trader to USD 2.3 billion.

UBS AG had previously put the loss at USD 2 billion when news of the scandal first broke Thursday.

In a bid to reassure investors, the Zurich-based bank said today it has "now covered the risk resulting from the unauthorised trading" and its equities business "is again operating normally within its previously defined risk limits."

UBS also confirmed for the first time that the trader, 31-year-old Kweku Adoboli, was already under investigation by the bank when he revealed his actions to authorities Wednesday.

"The loss resulted from unauthorised speculative trading in various S&P 500, DAX, and EuroStoxx index futures over the last three months," UBS said, adding that the magnitude of the bank's risk exposure was hidden by fake trades.

Adoboli remains in custody in London, charged Friday with acts of fraud and false accounting dating back to 2008. His next court appearance is Thursday.

The fact that the fraud took place over three years raises serious questions about the bank's ability to manage its risk. UBS said it has set up a special committee chaired by David Sidwell, the bank's senior independent director, to investigate the incident.

Speaking for the first time since UBS revealed the loss, Gruebel told the Swiss weekly Der Sonntag that the loss couldn't have been prevented.

 

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