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UBS Trading Losses Higher Than Reported

UBS trading losses higher than previously estimated, the banking giant reported on Sunday, after Kweku M. Adoboli waas charged on Friday in a London court.

UBS trading losses higher than previously estimated, the banking giant reported on Sunday, after Kweku M. Adoboli waas charged on Friday in a London court.

On Sunday, the Swiss banking company UBS said in a statement that equity index futures in the last three months with trading fraud and false accounting has led to losses of $2.3 billion, not the estimate of $2 billion that was reported previously. It also stated that no client positions were affected by the discovery of the fraud, and it has now set up an independent committee to begin investigating the trades and the risk systems in place in the bank.

On Friday, in a court in London, England, Kweku M. Adoboli who is 31, was charged with one count of fraud and two counts of false accounting, and these dated back to October, 2008. Mr. Adoboli was arrested on Thursday morning at 3:30 a.m. after the police had been called at 1 a.m. by UBS. Compliance officers were reviewing Mr. Adoboli’s trading actions on Wednesday, which led to the discovery of the unauthorized trades. Adoboli is still in police custody, and will remain there until the next hearing which is scheduled for Thursday.

As a result of these charges, many are asking how fraud of this magnitude could remain undetected for so long, and there is talk about whether the bank’s chief executive, Oswald J. Grübel should resign. When interviewed, Grübel said that he is responsible for everything which happens at the bank, but that he has not considering resigning.

Just last month UBS announced job cuts of 3,500 with 45 per cent of these coming from the investment side of the banking giant. This was because of lower earnings, as the economic future looks bleak.

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