2 More Executives Quit UBS Over Trading Loss

Kweku M. Adoboli, the former UBS trader Sang Tan/Associated PressKweku M. Adoboli, the former UBS trader accused of costing the bank $2.3 billion in losses, at the City of London Magistrates Court last month.

7:51 p.m. | Updated

LONDON — UBS said Wednesday that its co-chiefs of global equities had resigned after last month’s revelation of a $2.3 billion loss from unauthorized trading.

The trading occurred in the equities division. François Gouws and Yassine Bouhara handed in their resignations because “they assume overall responsibility for the effective management of the equities business,” the bank said. Another eight individuals from the equity unit, including the chief operating officers, were suspended as a result of an internal investigation.

UBS, Switzerland’s largest bank, “will also be taking appropriate disciplinary measures against responsible individuals in our operations and control functions in the coming weeks,” Carsten Kengeter, head of the investment banking division, wrote in an internal memo to employees on Wednesday.

Related Links

The departures and suspensions came three weeks after a London trader, Kweku M. Adoboli, was arrested and charged with fraud and false accounting, forcing UBS to announce a $2.3 billion trading loss. Mr. Adoboli, who remains in police custody and has yet to enter a plea, said through his lawyer last month that he was “sorry beyond words” for what had happened.

The scandal has already prompted the resignation of Oswald J. Grübel as chief executive and an internal investigation into how a midlevel trader was able to circumvent the bank’s risk controls and pile up such a loss.

Sergio P. Ermotti, the interim chief executive, wrote in a memo to employees on Wednesday that the internal review indicated that the bank’s risk controls “did detect unauthorized or unexplained activity, but this was not sufficiently investigated nor was appropriate action taken to ensure existing controls were enforced.”

“We have to be straight with ourselves,” he added. “In no circumstances should something like this ever occur.”

UBS has already taken “specific steps to address the failures identified,” Mr. Ermotti wrote.

UBS has said that the trader probably acted alone and that it expected to complete its internal inquiry in the coming weeks.

The bank named Mike Stewart, who was hired in July from Bank of America Merrill Lynch, to be chief of global equities. Mr. Stewart, 43, was to have joined Mr. Gouws as co-head of the equities business this month, succeeding Mr. Bouhara, who was to become chief of emerging markets for the investment banking division.

Now Mr. Stewart will run the unit alone from the United States and report to Mr. Kengeter.