Saving Grace
3日前
UBS's auditor warns over bank's financial reporting controls
📰 News
Summary
Bank's auditors expressed "adverse opinion"
UBS mentions "increased complexity" of internal accounting
Credit Suisse had material weakness before it imploded
LONDON, March 17 (Reuters) - UBS's (UBSG.S), opens new tab auditors have expressed an "adverse opinion" on the bank's internal controls over its financial reporting for 2024 after it failed to resolve issues related to misstatements inherited from Credit Suisse, the Swiss lender said on Monday.
An adverse opinion - a rare rebuke for a global bank - is generally understood to be a warning to investors that indicates that a company's financial statements could be misrepresented, misstated, and do not accurately reflect its financial performance and health.
UBS has been working to resolve issues in Credit Suisse's internal controls and said last year it was still reviewing potential misstatements after acquiring the lender in a government-orchestrated rescue in 2023.
In its annual report published on Monday, UBS said that following the merger of the two banks last year, it could no longer exclude Credit Suisse from its assessment and that it needed more time to resolve the problem.
"As of 31 December 2024, UBS's internal control over financial reporting was not effective because of the material weakness" related to the Credit Suisse business, the Zurich-based bank said.
Ernst & Young, re-elected as UBS's auditor last year, said in its assessment on Monday that because of the effects of this weakness, it had concluded that UBS had "not maintained effective internal control over financial reporting" as of end-2024.
"It's one of the many legacy issues from the Credit Suisse takeover that need to be addressed," said Vontobel analyst Andreas Venditti. The auditor's warning and UBS' financial reporting issues highlight the enormous challenges the bank faces in integrating Credit Suisse - the biggest banking merger since the 2008 global financial crisis.
Earlier in January, it came close to losing a licence to continue managing U.S. retirement plans over a paperwork error linked to the Credit Suisse integration.
PENDING ISSUES
UBS said it had concluded there was material weakness due to "the increased complexity of the internal accounting and control environment", as well as its ongoing migration efforts and the limited time to show its post-merger integrated control environment was working as it should.
The bank added that since the acquisition, it has executed a remediation program to address the weaknesses and has implemented additional controls and procedures.
It said the remaining material weakness relates to the risk assessment of internal controls. It did not elaborate further on when it aims to fully remediate the issues and any related costs.
A spokesperson for the bank declined to comment further. A representative for the Swiss Financial Market Authority (FINMA) declined to comment on the auditor's warning and said it is in "intense contact" with UBS over the integration with Credit Suisse.
Before its rescue, Credit Suisse and U.S. authorities had engaged in a months-long debate over the severity of the bank's reporting deficiencies.
In 2022 the U.S. Securities and Exchange Commission was questioning how Credit Suisse had booked a series of cash flows under its former Chief Financial Officer David Mathers, including share-based compensation, and whether the issues needed to be further escalated.
In mid-March 2023 its finance director Dixit Joshi, who succeeded Mathers in late 2022, told U.S. regulators that Credit Suisse's control deficiencies had "remained un-remediated for several years" and that the bank was reassessing the issues.
A week later the bank imploded, and the issues landed on the desk of UBS's CFO Todd Tuckner.
Credit Suisse's 2022 annual report contained explicit warnings from its auditor PwC on the effectiveness of the bank’s internal controls over financial reporting for that year.
Original source: Reuters
See also:
Why the Situation of UBS is very dangerous
DTCC a9569
As a result, effective March 21, 2025, UBS Securities LLC (#0642) will assume all open contracts for Credit Suisse Securities (USA) LLC (#0355), which are to be cleared or settled through or by National Securities Clearing Corporation.
Saving Grace
2年前
There may be hope, for USB and CS
Top Brass from Central Banks have been being removed
by White Hat Worldwide Alliance shake-up. Banks are
keeping their mouth shut while restructuring.
Gold is the standard again and the wise guys are cleared out.
Gold price is weights and measures with demand. Fiat Manipulation is over!
Certificate notes will only be printed based on registered and vaulted supply.
Gold and Silver will rocket especially Silver as there is no substitute for Silver
and it's used in just about everything now days from cars to computers.
"NEW YORK, Aug 4 (Reuters) - UBS Group AG (UBSG.S) is poised to make sweeping changes to the senior ranks of its investment banking division globally as soon as Monday, marking a new milestone in the process of integrating Credit Suisse, people familiar with the matter said.
The changes are aimed at producing unified teams following the completion of UBS's emergency takeover in June of Credit Suisse.
The changes are broad and involve several dealmaking groups, including healthcare, consumer/retail, financial sponsors and equity capital markets, the sources said.
Under the shake-up some Credit Suisse bankers will take on bigger roles in the combined company while some others leave, the sources said. Some UBS bankers will leave the firm as a result of the reshuffling, the sources said.
The restructuring is the latest move by CEO Sergio Ermotti to integrate UBS and Credit Suisse in a process that the bank has said would be painful, with tens of thousands of jobs hanging in the balance."
Logos of Swiss banks UBS and Credit Suisse are seen on an office building in Zurich, Switzerland March 19, 2023. REUTERS/Denis Balibouse
One of the team heads who is in discussions about potentially exiting is UBS's global head of consumer products and retail deals, Jeff Rose, two of the sources said. Jon Levin, who has served as Credit Suisse's head of retail investment banking, is in talks to replace him, the sources added.
Matt Eilers, UBS's global head of financial sponsors, is also in talks about possibly leaving, two of the sources said. Rob DiGia, UBS's global head of healthcare, will remain with the bank and is in talks about assuming a chairman-level role, according to two separate sources among those familiar with the matter.
The sources cautioned that the changes have not been finalized and details of restructuring remained in flux. They asked not to be identified ahead of an official announcement. Rose, Levin, Eilers and DiGia did not respond to requests for comment. A UBS spokeswoman declined to comment.
Reuters reported earlier on Friday on the reshuffling of one of the teams, UBS's technology, media and telecommunications (TMT) group. The bank is in talks to name Laurence Braham, who joined the Swiss bank from Barclays Plc (BARC.L) earlier this year, as global co-head of technology, people familiar with the matter said.
His co-head would be Christian Lesueur, who has been global head of TMT investment banking, the sources added. Steve Pettigrew, who just joined UBS from Bank of America Corp (BAC.N), would be leading software M&A under Braham, according to the sources. Neil Meyer, who worked alongside Braham at Barclays and followed him to UBS, would co-lead media and communications dealmaking globally alongside Lesueur, the sources said.
UBS has been trying to regain dealmaking market share. It ranked eighth in Refinitiv's global mergers and acquisitions league table in the first half of 2023, down from sixth a year earlier. In the Americas, UBS was 14th in the first half, down from seventh a year earlier.
UBS's savings targets and indications from insiders and analysts suggest it might be looking at cutting about a third of the combined group's global workforce, or some 30,000-35,000 jobs, Reuters reported on Thursday.
Reporting by Abigail Summerville, Milana Vinn and David Carnevali in New York; Editing by Leslie Adler
https://www.reuters.com/business/finance/ubs-nears-major-investment-bank-restructuring-sources-2023-08-04/
ITMS
7年前
Know This Trade Level For This Leading Regional Bank Stock
Since the start of November, leading regional bank stock, U.S. Bancorp (NYSE:USB), has been pulling back on the charts. On November 2, 2017, USB stock traded as high as $55.08 a share, today the stock is trading at $52.02 a share. The one negative for the stock is that it is trading below its 50 and 200-day moving averages. This chart formation tells us that the stock is vulnerable to lower prices in the coming weeks.
Traders must now watch the $49.00 area as the next major chart support level. This level was defended in September 2017 by the institutional money and it should be defended again when it is retested. It is always important for traders to know where they are wrong, so I would place a stop-loss below the $47.00 level using a weekly chart close. The upside targets for USB stock would be $55.00 as a first target and ultimately $60.00 a share as the final target.
Nicholas Santiago
InTheMoneyStocks
XenaLives
12年前
Does UBS FACILITATE rather than REGULATE?
A 2011 article:
Dec. 14 (Bloomberg) -- UBS AG’s wealth-management unit in London had no controls to prevent unauthorized trading in client accounts, according to a lawyer for a former trading desk head challenging a 1.25 million-pound ($1.93 million) fine.
UBS “was to some extent complicit” in Sachin Karpe’s unauthorized trades because “senior managers” were copied on e-mails about some client accounts, Karpe’s lawyer, Michael Blair, said at a court hearing in London this week. An external auditor’s review, commissioned by the bank, determined there were no controls to prevent internal unauthorized transfers or loans between clients of the bank unit, Blair said.
“He did not circumvent controls because there were none in place,” Blair said. “If there were no rules, he could not have been proved to be doing anything wrong.”
The case is one of three challenges by individual UBS bankers to Financial Services Authority enforcement actions stemming from the unauthorized trades. Zurich-based UBS in 2009 paid an 8 million pound-fine and agreed to reimburse customers $42.4 million.
Karpe, who is also accused of moving money between client accounts to hide losses from unauthorized foreign-exchange trades and helping a client use an offshore investment fund in violation of Indian law, is challenging the FSA fine at a court hearing that began Dec. 12.
Asia-2 Desk
Karpe, who was fired from his post overseeing Indian clients on the Asia-2 desk, accepts that he deserves a lifetime ban from working in Britain’s financial services industry, Blair said.
“That’s quite a considerable scalp for the FSA and it’s not being challenged,” Blair said. The fine isn’t an “appropriate penalty” because it would bankrupt Karpe, he said.
Karpe and his desk made as many as 50 unauthorized trades a day over a two-year period, according to the FSA. Over a one- year period from 2006 to 2007, he placed 1,404 foreign-exchange trades with values of $11.3 billion, 4.3 billion pounds, 1.9 billion euros ($2.5 billion), 109 billion Japanese yen ($1.4 billion), and 1.1 billion Swiss franc ($1.1 billion), the regulator said in court documents.
The trades were discovered after a UBS whistle-blower reported a $5,000 transfer from a customer account to Karpe’s personal bank account in 2007, the FSA said. The bank began a review that led to Karpe being fired in early 2008.
Certain Weaknesses
A UBS spokesman said the bank has “acknowledged that there were weaknesses in certain aspects of Wealth Management U.K.’s control environment.”
Karpe is also accused of using one of the bank’s accounts “to route internal transfers between client accounts to conceal the identity of the transferor and transferee accounts.”
There was “a defective system within the bank” that gave Karpe the ability to use the account “without much difficulty,” Blair said.
Laila Karan, a former client adviser on the desk who was fired for gross misconduct, is also a defendant in the case. The FSA is seeking to fine her 90,000 pounds and ban her from working in the industry for not notifying the bank about Karpe’s actions.
‘Escalated’
“Karan was never an insider on Mr. Karpe’s activity,” her lawyer, Hodge Malek, told the tribunal. “She accepts that the little she did know she should have escalated.”
Another defendant who worked on the desk, Jaspreet Ahuja, will settle with the FSA, said Jonathan Crow, the regulator’s lawyer.
The regulator is also attempting to fine John Pottage, the former chief executive officer of the wealth management unit, 100,000 pounds ($156,000) for failing to prevent the unauthorized trades. Pottage, who is now a senior executive at the bank’s headquarters in Zurich, went to trial last month to challenge the regulator.
The case is an instance of risk-management failures at the bank, several years before Kweku Adoboli, a former trader in UBS’s investment bank, was charged with causing $2.3 billion in losses through unauthorized trading. Adoboli, who was charged with fraud and false accounting tied to the loss, may enter a plea at a London criminal court next week.
--Editors: Anthony Aarons, Christopher Scinta
To contact the reporter on this story: Lindsay Fortado in London at lfortado@bloomberg.net.
To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.
http://www.businessweek.com/news/2011-12-15/ex-ubs-trader-says-bank-had-no-unauthorized-trading-controls.html
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