In the wake of the $2.3 billion alleged rogue trading scandal that has rocked UBS, it appears the dirt on the already embattled Swiss bank is starting to come out of the woodwork.
“Now that the machine has got going, every single bad thing is going to come out,” Fred Ponzo, a capital markets adviser at Greyspark Partners in London, told Bloomberg BusinessWeek.
BusinessWeek has already dug up one dirty secret involving the former CEO of UBS’s wealth management division in London.
John Pottage, the ex-CEO of UBS’s wealth management division in London, was stripped of his leadership role in August 2008.
At the time it wasn’t clear why he was ousted, but it may have been due to his failure to ensure proper risk management. Eventually everyone forgot about it, but now it’s coming back to haunt the firm again.
Pottage, who was authorised by the Financial Services Authority until December 2008, is planning to challenge the U.K. financial regulatory body at a court hearing in November over a fine from the agency for not making sure his division had risk controls to prevent unauthorised trades dating back to 2006, the report said.
The FSA fined UBS 8 million pounds ($12.5 million) in 2009, at the time the third-largest penalty imposed by the regulator, for failing to prevent employees in the international wealth- management business from making as many as 50 unauthorised trades a day with funds from at least 39 customer accounts. The case is an example of UBS failing to police errant trading in London years before the bank said this week it lost $2.3 billion from unauthorised trades.
Interesting: Pottage now works in risk management for UBS in Zurich, the report said.
Don’t miss: Oswald Gruebel is going to regret saying this…