NEW YORK—Oswald Gruebel, the German CEO of investment and corporate banking giant UBS AG, has resigned from his post at the Swiss bank.
The decision was made after UBS, Switzerland’s largest banking firm, lost $2.3 billion from authorized trading from a trader based in London.
Gruebel resigned from the firm after a board of directors meeting which took place in Singapore last week. Gruebel, who spent most of his career at rival Credit Suisse Group, became CEO of UBS in February 2009.
“Oswald Gruebel feels that it is his duty to assume responsibility for the recent unauthorized trading incident,” UBS Chairman Kaspar Villiger said in a company statement.
“During his tenure, he achieved an impressive turnaround and strengthened UBS fundamentally.”
UBS’s current head of Europe, Middle East, and Africa Sergio P. Ermotti will assume the CEO role on an interim basis until a replacement could be found, the company’s board said.
The large losses, caused by London-based trader Kweku Adoboli, could impact the company’s third quarter financial results.
The 31-year old Adoboli was arrested last week on charges of financial and accounting fraud. A hearing will occur in October. Adoboli has retained the law firm Kingsley Napley, the defense team of Nick Leeson, the rogue trader who brought down the financial firm of Barings Bank in 1995.
Adoboli worked at the bank’s “Delta One” desk, which trades in equity ETFs (baskets of securities in an index). The main strategies of the desk involve buying and selling ETFs, along with their respective individual component shares to take advantage of small pricing inconsistencies.