Regulators step up UBS probe

UBS trader Kweku Adoboli leaves City of London Magistrates Court in London September 16, 2011. Adoboli appeared in a London court on Friday charged with fraud after Swiss bank UBS said it had lost about $2 billion (1.27 billion pounds) in unauthorised trades.

UBS trader Kweku Adoboli leaves City of London Magistrates Court in London September 16, 2011. Adoboli appeared in a London court on Friday charged with fraud after Swiss bank UBS said it had lost about $2 billion (1.27 billion pounds) in unauthorised trades.

Published Feb 3, 2012

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British and Swiss regulators have stepped up their investigation into a $2.3 billion trading loss at UBS's London arm last September with the launch of a formal probe.

The Financial Services Authority (FSA) and the Swiss Financial Market Supervisory Authority (FINMA) launched an initial joint investigation on September 16, a day after UBS unveiled the huge loss, which it blamed on a rogue trader.

FINMA said on Friday they had started formal administrative enforcement proceedings against UBS under Swiss law, as well as launching a deeper investigation alongside Britain's FSA.

“FINMA will assess and rule upon the adequacy of the controls that were in place to prevent and detect unauthorised trading within the investment bank,” the regulator said.

UBS said on Friday it would cooperate fully with its regulators.

The Swiss bank said that its ability to disclose further details about what it calls an unauthorised trading incident was limited by ongoing criminal proceedings and the regulatory investigations, but that it was still making internal changes in response to the losses.

“This does not prevent us from taking further decisive action to improve our operational risk controls,” UBS said.

Former UBS trader Kweku Adoboli pleaded not guilty earlier this week to charges related to the losses, and his trial in London is now due to start on September 3.

The enforcement investigations could also take several months. - Reuters

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