UBS: We regret to inform you . . .
Here is the official UBS notice to employees:
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Dear colleagues,
We regret to inform you that yesterday we uncovered a case of unauthorized trading by a trader in the Investment Bank. We have reported it to the markets in line with regulatory disclosure obligations. The matter is still being investigated, but we currently estimate the loss on the trades to be around 2 billion US dollars. It is possible that this could lead UBS to report a loss for the third quarter of 2011. No client positions were affected.
We understand that you have already had to contend with unfavorable, volatile markets for some time now. While the news is distressing, it will not change the fundamental strength of our firm.
We urge you to stay focused on your clients, who are counting on you to guide them through these uncertain times.
We want to reassure you that we, together with the rest of the management, are working closely with the Investment Bank’s management and risk and controlling to get to the bottom of the matter as quickly as possible, and will spare no effort to establish exactly what has happened. We will keep you updated on the progress of our investigation.
Yours,
The Group Executive Board
See also:
• ‘UBS Had $2B Loss From Unauthorized Trading (Bloomberg)
• ‘UBS Hit by $2 Billion in Unauthorized Trades (WSJ)
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September 15th, 2011 at 7:05 am
“As you know, our risk management and compliance practices are among the best in the world…”
.
September 15th, 2011 at 7:45 am
…Jerome Kerviel landed a job at UBS?
September 15th, 2011 at 7:52 am
Spontaneous
Scapegoat
Synthesis
September 15th, 2011 at 7:55 am
Bad for UBS, great for the people on the other side of those trades.
September 15th, 2011 at 8:12 am
Oops!
September 15th, 2011 at 8:14 am
I wonder, was it unauthorized before or after it lost 2 billion dollars?
September 15th, 2011 at 8:38 am
Just another example of the TBTF bankster cultural mentality.
Chasing the potential for a bonus with other people’s money.
How many ‘rogue’ trades do we hear about that made money?
September 15th, 2011 at 8:53 am
Meanwhile, from last quarter.
Dear colleagues,
We are pleased to inform you that yesterday we closed an exemplary trade by a trader in the Investment Bank. This practice of high risk/reward is in line with our y2k current practice protocols. We strongly encourage this type of behavior, and we currently estimate the gain on the trade to be around 1.99 billion US dollars. It is possible that this could lead UBS to report a gain for the second quarter of 2011. No client positions were affected.
We understand that you have had to contend with volatile markets for some time now. While the news is very good, it will not change the fundamental strength of our firm.
We urge you to stay focused on your profitable trades, and also your clients, who along with government backstops, we depend on for our trading ventures.
We want to reassure you that we, together with the rest of the management, are working closely with the Investment Bank’s management to mitigate any tax payments arising from this trade, and will spare no effort to maintain the most lax regulatory environment possible. We will keep you updated on the progress of our prerogatives.
Yours,
The Group Executive Board
September 15th, 2011 at 8:58 am
What’s the rogue’s side of the story?
September 15th, 2011 at 9:02 am
[...] UBS: We regret to inform you . . . | The Big Picture "We regret to inform you that yesterday we uncovered a case of unauthorized trading by a trader in the Investment Bank. We have reported it to the markets in line with regulatory disclosure obligations. The matter is still being investigated, but we currently estimate the loss on the trades to be around 2 billion US dollars. It is possible that this could lead UBS to report a loss for the third quarter of 2011. No client positions were affected." (tags: switzerland speculation banks) [...]
September 15th, 2011 at 9:06 am
What happens the day such a trade is made by computer and they don’t pull the plug fast enough?
September 15th, 2011 at 9:19 am
Fade in: Handsome middle-aged couple walking barefoot on a beach against a brilliant Cape Code sunrise
Cue soothing music.
Narrator (in rich baratone): UBS … You and Us.
Suddenly a wave breaks violently. The sunlight dims. The couple scurries from the threatening tide.
The middle-aged man looks directly to the camera and screams, “YOU did what???? !!!!!”
September 15th, 2011 at 9:43 am
I have to hand it to the European banksters—blow yourself up: blame an adolescent trader. Our Wall Streeters would call it an act of nature and add 0.5% to the lobbying budget.
September 15th, 2011 at 10:04 am
They could look into using these things call computers – to implement preventative, detective and corrective controls on unauthorized trading. Oh wait- they already have computers and supposedly world class risk management? Hmmm.
I guess the only “unauthorized” activity was losing money…
September 15th, 2011 at 10:06 am
he’s a chump who did fraud the old fashioned way and actually got caught
the clever ones are still out there
this as basicallyan accounting issue–and there are $200 bio more of losses?
September 15th, 2011 at 10:13 am
translation
we the top management have no idea what is going on over there
in that investment bank traders boiler room,
but we will be swift and harsh in deciding which of THEIR management, Risk” or controllers we should fire
with severance. they might wish to share their version otherwise
September 15th, 2011 at 1:10 pm
Sounds like a good excuse for UBS to “keep up with the Joneses” in firing people. Can’t let BofA steal all of the good vibes from the head-cutting party that’s coming back to town. Worked for UBS for a brief time….they really do suck. No doubt about it.
September 15th, 2011 at 2:00 pm
Is this a capital offense in Switzerland? (pun intended)
September 15th, 2011 at 2:07 pm
How many “rogue” trades does it take to lose $2B
If you were UBS would you understae or overstate the losses if you weren’t sure?
Bonus incentive structures still encourage reckless risk taking
September 15th, 2011 at 2:29 pm
so Kweku was arrested
but his boss Hughs immediately ” resigned”
lets guess how much his severance was
September 15th, 2011 at 2:43 pm
As the late (D) Cong. Tom Lantos remarked in his Hungarian accent to a subject being grilled before his committee:
“People have committed suicide for less”…….
September 16th, 2011 at 12:29 am
The UBS response is predictable. What I wonder about is the idiot journalists who parrot the “rogue trader” theme. The correct headline:
“Inadequate Internal Controls Cause $2 Billion Dollar Loss at UBS.”
The storyline:
Even after other banks have lost billions to improperly supervised trading operations, UBS management demonstrated spectacularly inept oversight of its employees. The mystery is how this could happen in the age of computer monitoring of every trade, dollar, and position. Authorities are likely to investigate whether UBS has violated terms of the numerous bailouts that it has received since 2008. Civil liabilities are possible, but also there is the specter of criminal charges for fraudulently misleading regulators about the state of internal controls and procedures at UBS. In addition, after repeated public statements to investors that it has reformed, shareholder lawsuits appear likely…