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September 18, 2011

Deloitte appointed to investigate $2bn UBS fraud

The UK Financial Services Authority and Swiss Financial Market Supervisory Authority have appointed Deloitte to investigate the events that lead to rogue trader Kweku Adoboli losing $2bn in unauthorised trading at the Swiss investment bank UBS, according to the Financial Times.

In a joint statement, the regulators said ‘a third party’ will investigate the details of the unauthorised trading and the control failures which permitted the activity to remain undetected.

The investigation will also assess the overall strength of UBS’s controls to prevent unauthorised or fraudulent trading activity in its investment bank.

On Friday at London magistrate court, Adoboli was charged for false accounting and fraud, dating back to October 2008.

Adoboli worked for the investment bank’s Delta One trading desk until his arrest in the early hours of Thursday morning.

UBS’s board of directors set up a committee that will conduct an independent internal investigation into the unauthorised trading activities.

The committee will be chaired by the former chief financial officer of JP Morgan David Sidwell, who will report to the UBS board.

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