UBS systems detected $2bn rogue trader fraud, admits CEO Sergio Ermotti
UBS interim CEO Sergio Ermotti has admitted systems in the banks IT infrastructure detected the unauthorised trading of the rogue trader who cost UBS over $2bn, but nothing was done about the warning signals.
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UBS interim CEO Sergio Ermotti has admitted systems in the banks IT infrastructure did detect the unauthorised trading activities of the rogue trader who cost UBS over $2bn.
In an internal memo, Sergio Ermotti also reveals nothing was done about the warning signals.
Last month, Akweku Adoboli, a 31-year old trader in London, was arrested as UBS announced a rogue trader had cost the bank sizable losses.
In the memo, seen by the Wall Street Journal, Ermotti admitted the bank's internal systems had detected the unauthorised activity. Ermotti said the bank failed to take action.
"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. 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," wrote Ermotti.
Ermotti said the co-heads of Global Equities have had resignations accepted. Ermotti added: "Firm disciplinary action will be taken against further individuals in Equities and across other responsible functions."
