UBS AG (UBS)

[winston]

UBS - unauthorized trading loss of US$2b

[iam802]

UBS - unauthorized trading loss of US$2b

My first thought..."Is Temasek still vested in this?"

If it does, it strengthens my belief that whatever they touch....'brown stuffs' sure to follow (until the correlation breaks).

[winston]

UBS $2 billion rogue trade suspect held in London
by Victoria Howley and Emma Thomasson

LONDON/ZURICH (Reuters) - Swiss bank UBS said a trader had lost it around $2 billion in unauthorized deals, and police in London arrested 31-year old Kweku Adoboli in connection with the case.

Adoboli -- a director of exchange traded funds and "Delta 1" working in the bank's London office, according to his profile on networking site LinkedIn -- was arrested on suspicion of fraud, sources told Reuters.

The loss effectively cancels out the $2 billion that the bank had hoped to save in a cost-cutting program announced last month in which it will axe 3,500 jobs.

It also threatens the future of UBS's investment bank, which is being reviewed by chief executive Oswald Gruebel as part of a wide-ranging restructuring following heavy losses in the credit crisis and a damaging scandal over bankers helping rich U.S. clients dodge taxes.

UBS employed almost 18,000 people in its investment bank at the end of June, most of them outside Switzerland, particularly in London and the United States.

UBS shares were down 8.2 percent at 10.03 Swiss francs at 1034 GMT, while the European banking sector was up 2.8 percent.

The last similar case was when Jerome Kerviel, then a trader at Societe Generale, racked up a $6.7 billion loss in unauthorized deals revealed in 2008. Kerviel was sentenced to three years in prison in October 2010.

UBS said last month it was to axe 3,500 jobs to shave 2 billion Swiss francs ($2.3 billion) off annual costs as it joins rivals in reversing a post-crisis hiring binge and preparing for a tough few years.

($1 = 0.880 Swiss franc)

Source: Reuters US Online Report Top News

http://www.newsmeat.com/news/meat.php?a ... &buid=3281

[winston]

Losses up to US$2.3b now. How high can it go ?

[iam802]

The pattern is always the same.

When it comes to losses, the first estimate is always low. Then it becomes higher (and may go higher).

We have seen this with Enron, CAO, the financial crisis, SocGen, PIIGS....

From these, we get to learn more about the 'very long term investors' holding on to 'very good brands' for a 'very long time'. And they call this 'due diligence', 'long term investment'.

Reminder to self:
Stick to my stop loss. If I'm wrong, I'm wrong. Cut the loss (or take the profit) and look for the next opportunity.

[iam802]

Wah...USB Board meet in Singapore.

--
UBS Board to Meet in Singapore to Review $2.3B Loss

http://www.bloomberg.com/news/2011-09-1 ... dures.html

[winston]

Not too sure that he should resign. The person to be fired should be the immediate manager of that trader, maybe even the manager of that manager. In addition, the Chief Risk Officer and Chief Compliance Officer should also be severely reprimanded.

CEO OF LOSS-HIT UBS BANK RESIGNS

The head of Swiss banking giant UBS has resigned in the wake of a $2.3 billion loss in unauthorized trading, the bank announced Saturday.


http://edition.cnn.com/2011/09/24/world ... index.html

[iam802]

maybe the twist here is someone related from GIC will head UBS (as part of the recommendation)....

[winston]

UBS first quarter profits slide by 54%

Swiss banking giant UBS reported that net profit slid by 54 percent to 827 million Swiss francs (688 million euros, $910 million) in the first quarter of 2012, significantly below expectations, in a statement on Wednesday.

The company was in particular hit by an exceptional charge of 1.2 billion francs for bad debt, it said in a statement.

In February UBS had forecast a tough first quarter owing to the economic crisis when it posted its results for 2011, with net profit sliding 44 percent year in the year to 4.2 billion francs.

The result came in 25 percent lower than the average forecast of 1.1 billion francs by analysts polled by financial firm AWP.

UBS highlighted good performance in its core division, wealth management, which registered pre-tax profit of 803 million francs in the first three months of the year, up 70 percent from the last three months of 2011.

The wealth management Americas division reported its highest pre-tax profit ever at $209 million (157.8 million euros), up more than 30 percent from the figure for the previous quarter.

The bank said the two divisions were boosted by inflows from the Asia-Pacific region, emerging markets and Switzerland.

UBS sounded a cautionary note on its financial outlook, underlining that banks still face a tough environment because of the eurozone debt crisis, concerns about the European banking system, budget deficit battles in the United States and overall uncertainty about the global economy.


Source:AFP Global Edition

[winston]

US files suit against UBS Securities

US regulators have filed a lawsuit against Swiss banking giant UBS, accusing it of misrepresenting the risk associated with mortgage-backed securities, it sold to two federal credit unions.

The two credit unions failed after paying $1.1 billion for the securities, which they believed to be safe bets but in fact carried "substantial risk," the National Credit Union Administration, which filed the suit, said Thursday.

"The strength of our entire financial system relies on trust and accountability," NCUA Board Chairman Debbie Matz said in a statement.

"As our complaint makes clear, UBS Securities violated this trust, which contributed to the collapse of two corporate credit unions and the resulting crisis in the credit union industry."

UBS could not immediately be reached for comment.

The two credit unions -- the US Central Federal Credit Union (US Central) and Western Corporate Federal Credit Union (WesCorp) -- provide a number of services to retail credit unions, which serve consumers.

NCUA said it has filed similar actions against JP Morgan Securities, RBS Securities, Goldman Sachs and Wachovia, and has settled claims worth more than $170 million with Citigroup, Deutsche Bank Securities, and HSBC.

The widespread marketing of risky mortgage-backed securities was one of the main causes of the 2008 financial crisis.


Source: AFP Global Edition