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CEO of loss-hit UBS bank resigns

Story highlights

  • The board at UBS has accepted Gruebel's resignation
  • It follows the recent revelation by UBS of a $2.3 billion loss in unauthorized trading
  • A UBS trader faces charges in connection with the losses

The head of Swiss banking giant UBS has resigned in the wake of a $2.3 billion loss in unauthorized trading, the bank announced Saturday.

Chief executive Oswald J. Gruebel is stepping down immediately, and an interim CEO has been appointed, the bank said in a statement.

A UBS trader, Kwaku Adoboli, has been charged in London with counts of fraud and false accounting in connection with the losses. He has not yet pleaded to the charges.

UBS chairman Kaspar Villiger was quoted in the UBS statement as saying the bank regretted Gruebel's decision.

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Gruebel "feels that it is his duty to assume responsibility for the recent unauthorized trading incident. It is testimony to his uncompromising principles and integrity," Villiger said.

"During his tenure, he achieved an impressive turnaround and strengthened UBS fundamentally. He steps down having helped make UBS one of the world's best capitalized banks."

    Sergio P. Ermotti will take over at the helm of UBS while the board of directors looks for a permanent successor.

    The board is "deeply disappointed" by the loss in unauthorized trading and will do all it can to assist an independent investigation into what happened and put measures in place to prevent a recurrence, the statement said.

    Revealing the $2.3 billion loss a week ago, UBS said no client positions were affected.

    But the "unauthorized trading by a trader in its investment bank" could cause UBS to post a loss in the third quarter of this year, it said.

    The loss would potentially be among the largest ever to a bank in unauthorized trading.

    UBS made a pre-tax profit of about $1.9 billion in the second quarter of this year, it announced in July, down from about $2.5 billion the quarter before that.