UBS: Our risk systems did detect £1.3bn rogue trader
- 07 October, 2011 18:11
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.
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