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Subject: [ISN] UBS Admits Internal Fraud Controls Were Not Effective
From: InfoSec News <alerts () infosecnews ! org>
Date: 2011-10-28 5:32:34
Message-ID: alpine.DEB.2.02.1110280032250.4065 () infosecnews ! org
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http://www.csoonline.com/article/692528/ubs-admits-internal-fraud-controls-were-not-effective
By Anh Nguyen
CSO
October 27, 2011
UBS 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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