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UBS Admits Internal Fraud Controls Were Not Effective
From: InfoSec News <alerts () infosecnews org>
Date: Fri, 28 Oct 2011 00:32:34 -0500 (CDT)
http://www.csoonline.com/article/692528/ubs-admits-internal-fraud-controls-were-not-effective By Anh Nguyen CSO October 27, 2011UBS has admitted that certain internal controls were not in place at the time that rogue trader Kweku Adoboli allegedly ran up a $2 billion (1.3 billion) loss on the bank's derivatives desk.
This follows a memo that interim chief executive Sergio Ermotti sent to employees earlier this month saying that the bank was aware that its IT systems did detect the rogue activity but that "this was not sufficiently investigated nor was appropriate action taken to ensure existing controls were enforced".
In an update after a regulatory filing to the US Securities and Exchange Commission (SEC), UBS said: "Following the discovery of the unauthorised trading activities that UBS announced in September, management has determined that certain internal controls were not effective on December 31, 2010, but at the same time has reconfirmed the reliability of the financial statements included in UBS's 2010 annual report."
UBS has identified two monitoring controls that were lacking at the end of December 2010, when Adoboli allegedly placed the unauthorised trades.
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