Sang Tan/Associated PressKweku M. Adoboli, the former UBS trader accused of costing the bank $2.3 billion in losses, at the City of London Magistrates Court last month.
LONDON — UBS, the Swiss bank, said Wednesday that its co-heads of global equities had resigned over last month’s trading incident that resulted in a $2.3 billion loss.
Francois Gouws and Yassine Bouhara handed in their resignations because they took responsibility for the management of the equities operation, which is where the unauthorized trades occurred. UBS also said it would take “appropriate disciplinary action” against other individuals in the equities business and in other areas.
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“Their resignations come as they assume overall responsibility for the effective management of the equities business,” UBS said in a statement. UBS named Mike Stewart, who joined UBS from Bank of America Merrill Lynch in July, as head of global equities.
The departures of the equity co-heads came three weeks after a London trader, Kweku M. Adoboli, was arrested in the middle of the night and charged with fraud and false accounting, forcing UBS to announce a $2.3 billion trading loss.
The scandal prompted the resignation of Oswald J. Grübel as chief executive and UBS started an internal investigation into how a midlevel trader was able to circumvent the bank’s risk controls and pile up such a loss. Mr. Adoboli remains in police custody and has yet to enter a plea.
UBS’s chairman said previously that it was most likely that the trader acted alone and that the bank’s internal investigation was expected to be completed sooner rather than later. KPMG, the accounting firm, started a separate investigation into the incident on behalf of Swiss and British banking regulators.
UBS said Tuesday that it expected a “modest” profit in the third quarter despite the trading loss, partly because of the appreciation in value of its own outstanding debt. The bank is scheduled to report full third-quarter figures on Oct. 25.
Article source: http://dealbook.nytimes.com/2011/10/05/2-more-ubs-executives-quit-over-trading-loss/?partner=rss&emc=rss
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