UBS Turns Around A Profit Despite Mega Fraud By Rogue Trader

October 07 00:00 2011

New York, October 7 (RainbowNewsLine.com) – The United Bank Of Switzerland (UBS) has turned around and posted a modest profit in the same quarter it was shaken by a mega scam by internal rogue trader Kweku Adoboli. Kweku Adoboli as well as the lax internal control policies at UBS had cost them dearly with losses amounting to $2.3 billion. While the rogue trader has been arrested by London police and charged with false accounting and fraud, the shareholders were left to foot the bill.

There was a grave concern to UBS’s reputation worldwide. It had lost close to $50 billion in the 2008-2009 meltdown, has been facing a lawsuit from the German government regarding helping high profile customers evading taxes and launder money when the news of rogue trading became public. In case the people lose confidence in the Swiss bank, it could face problems. Most of its holdings are of high profile customers with huge sums of money. If they started pulling out, a run on the bank would be certain.

To prevent this, UBS may have invented profits out of mere book keeping entries to keep customer confidence high. The profits on bond disposals as well as accounting gain on the falling value of UBS’s own debt have contributed to the profit accrued on the Swiss banks’ balance sheet.

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