UBS' Grübel resign after $2 bio scandal

Irvin Avriano A.

UBS' Grübel resign after $2 bio scandal

JAKARTA: UBS AG CEO Oswald J. Grübel resign from the biggest global financial service company after unauthorized trading scandal.

The matter was shown in the official letter from UBS' media release on yesterday afternoon. After the resignation, the board of UBS asked Sergio P. Ermotti to take up the CEO position on an interim basis while the appointment will take effect immidiately.

"The Board regrets Oswald Grübel's decision. Oswald Grübel feels that it is his duty to assume responsibility for the recent unauthorized trading incident. It is testimony to his uncompromising principles and integrity," said UBS Chairman Kaspar Villiger in the release.

He admit that during his tenure, Grübel already achieved an impressive turnaround and strengthened UBS fundamentally. According to Villiger, Grübel already helped make UBS one of the world’s best capitalized banks.

Grübel, who formerly ran Credit Suisse AG, was brought out of retirement by UBS in February 2009 to take over from his predecessor Marcel Rohner after the company posted the biggest annual loss in Swiss corporate history.

A former bond trader, Grübel doubled profit at Credit Suisse, the Switzerland second biggest bank, between 2004 and 2006. Grübel, 67, and Carsten Kengeter, 44, who runs the investment bank, have been trying to revive earnings at the division for two years.

Both executives hired more than 1,700 people across the investment bank and brought in new business heads to replace those that left or were fired. They’ve also increased risk- taking to improve earnings opportunities.

The investment bank last had a pretax loss in the third quarter of 2010 when what Grübel called “very low levels of client activity” and a charge related to the bank’s own debt hurt revenue at the division.

Kweku Adoboli, 31, one of UBS employee, arrested by Scotland Yard officer on September 15th. Adoboli’s LinkedIn page lists him as a director in ETF and Delta1 Trading at UBS investment bank in London. He previously held the position of trade support analyst at the investment bank, according to the LinkedIn profile.

Later, a University of Nottingham spokeswoman confirmed that Adoboli graduated from the school in July 2003, earning a degree in Computer Science.

The matter is still under investigation and the “current estimate of the loss on the trades is in the range of US$2 billion,” UBS said in a statement, back in September 15th, the third anniversary of the collapse of Lehman Brothers Holdings Inc. No client positions were affected, the company said.

UBS is owns three main division namely investment bank, asset management, and wealth management. The company's shares listed in Swiss Exchange and New York Stock Exchange, coded UBSN and UBS.

The bank was a merger result from the Switzerland second and third largest bank, Union Bank of Switzerland and Swiss Bank Corporation back in 1997. The merger formed the new company become the second largest bank in the world at the time, just after Bank of Tokyo-Mitsubishi.

In 2000, the company merge with US-based securities and investment management Paine Webber which made their wealth & asset management division carry the name of UBS PaineWebber until 2003.