The New York Times
UBS Chief Resigns Over Trading Scandal
LONDON — The Swiss banking giant, UBS, said Saturday that its chief executive, Oswald J. Grübel, had resigned over a rogue trading scandal that cost the bank $2.3 billion.
The board said in a statement that it regretted Mr. Grübel’s decision and that it has appointed a board member, Sergio P. Ermotti, to the chief executive position on an interim basis.
“Oswald Grübel feels that it is his duty to assume responsibility for the recent unauthorized trading incident,” the board chairman Kaspar Villiger said in the statement. “It is testimony to his uncompromising principles and integrity.”
A trader in the bank’s London office, Kweku M. Adoboli, 31, has been accused of making billions of dollars in rogue trades on index futures on the Standard & Poor's 500-stock index, the DAX in Frankfurt and the Euro Stoxx 50 and keeping them secret by offsetting them with fictitious positions that kept the transactions within the bank's risk-exposure limit.
Mr. Adoboli has been charged with one count of fraud and two counts of false accounting dating to as early as October 2008.
Mr. Villiger also thanked Mr. Grübel “for everything he has done for UBS.” The bank added that the board was “deeply disappointed by the recent loss arising from unauthorized trading.”
The resignation comes about a week after Mr. Grübel told a Swiss newspaper that as chief executive he was responsible for the trading loss but that he did not feel guilty. He also said he had not thought about resigning.
Mr. Grübel was brought out of retirement by Mr. Villiger to take over at UBS in 2009 after the bank suffered significant losses because of its exposure to the subprime mortgage market. During his tenure, Mr. Grübel managed to return UBS to profit by reversing client money outflows at its private banking business and by reducing costs.
The announcement Saturday came after a three-day board meeting in Singapore that was already scheduled before the unauthorized trades were revealed. The board was scheduled to discuss UBS’s future strategy especially with a focus on scaling back the investment banking business to make the entire bank more profitable.
The board said Saturday that it would stick to its integrated strategy, which means it would keep some investment banking operations. But the board asked the bank’s management to accelerate the planned changes to the investment banking unit, which are aimed to reduce costs while ensuring the bank’s wealth management clients have access to enough products and services.
“We are committed to further expanding our already leading global wealth management franchise,” Mr. Villiger said in the statement. “The Investment Bank will continue to strengthen its alignment with UBS’s wealth management businesses, in addition to serving its corporate, sovereign and other institutional clients.”
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