UBS AG
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WATCH: How the Presidential Election Impacts Dodd-Frank: UBS Lobbyist John Savercool Interview on MarketsWiki.tv (October 2012) |
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| UBS AG | |
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| Founded | 1872 |
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| Headquarters | Zurich, Switzerland |
| Key People | Chairman Peter Kurer |
| Employees | 80,000 |
| Products | Capital-markets investment products and services; UBS PIN ATS |
| Corporate Website | www.ubs.com |
Century-old UBS, formerly Union Bank of Switzerland, has become a global financial-markets giant with CHF 3.2 trillion in invested assets. UBS has a worldwide business serving mostly wealthy customers and their corporations through acquisitions at home and abroad. UBS has been particularly hard hit by the U.S. sub-prime mortgage market meltdown and took a big loss on its 2007 results.
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Background
UBS is divided into three business segments: UBS Global Asset Management, UBS Global Wealth Management, and UBS Investment and Business Banking.[1] The Investment Banking unit has been largely to blame for UBS's approximately $50 billion in credit-investment writedowns in 2007-08 and has recently seen its management shaken up.[2] Jerker Johansson, the head of the unit, stepped down on April 27, 2009 -- the fourth time the business had changed bosses in the past 18 months.[3]
History
Union Bank of Switzerland was formed originally in 1912 by the merger of two Swiss regional banks. The modern-day version was formed in 1998 when the original UBS merged with arch-rival Swiss Bank Corporation (SBC) to form UBS AG, which two years later acquired U.S. brokerage PaineWebber. Today it employs more than 80,000 people in over 50 countries.[4]
In August of 2009 the U.S. Internal Revenue Service lodged a request to its Swiss counterpart for data from UBS, stemming from a settlement to a suit between the IRS and UBS. The request began an administrative process aimed at getting information on more than 4,000 UBS clients.[5] UBS paid $780 million in 2009 to settle a criminal tax probe.
In 2012, the U.S. Commodity Futures Trading Commission (CFTC) announced an order against UBS AG and UBS Securities Japan Co., Ltd., bringing and settling charges of manipulation, attempted manipulation and false reporting of certain global benchmark interest rates.[6] The Order required UBS to pay a $700 million civil monetary penalty, cease and desist from further violations as charged, and take specified steps to ensure the integrity and reliability of its LIBOR and other benchmark interest rate submissions and improve related internal controls. In summary, CFTC’s Order found that or at least six years UBS regularly tried to manipulate multiple benchmark interest rates for profit, and at times succeeded in manipulating the official fixing of Yen LIBOR. The CFTC's order also found that more than 2,000 instances of unlawful conduct involving dozens of UBS employees, colluding with other panel banks, and inducing interdealer brokers to spread false information and influence other banks; and the CFTC order found UBS made false U.S. Dollar LIBOR and other submissions to protect its reputation during the global financial crisis.
Bad Year
After several years of double-digit profit growth, UBS suffered a loss of over $5.5 billion in 2007 and another loss of $12 billion just for the first quarter of 2008,[7] largely due to its failed subprime mortgage-backed investments. In April 2008 UBS announced another writedown of $19 billion on subprime mortgage-backed securities,[8] making UBS officially that market's biggest victim so far. UBS began building its mortgage-backed securities portfolio in 2005 that would eventually top $100 million in value.
News
2012
In the fall of 2012 it was announced that UBS would begin notifying employees of a round of job cuts totaling roughly 400. It was anticipated that additional job losses that could run into the thousands could follow.[9]
2011
In November 2011, the U.S. Securities and Exchange Commission (SEC) filed formal charges against UBS for inaccurate recordkeeping related to short sales. UBS agreed to pay $8 million and to hire an independent adviser in order to settle the charges. This followed a $12 million penalty paid in October 2011 to the Financial Industry Regulatory Authority (FINRA) for related charges.
UBS cut about 2,000 investment-banking jobs in 2011. It had 16,432 employees in investment banking at the end of the second quarter, down from a peak of roughly 24,000 in 2007.
2010
In early August 2010, UBS was ordered to reimburse Maryland-based Kajeet Inc., which markets cellphones for kids, $80.8 million for damage to its business when Kajeet's cash was frozen in auction-rate securities in early 2008. Kajeet had invested only $8 million in the securities through UBS, according to people familiar with the case, the Wall Street Journal reported. UBS disagreed with the arbitration panel's decision and planned to file a motion to overturn it.[10]
On July 28, 2010, UBS reported quarterly earnings that were better than expected. In the third consecutive quarter in profit, net group earnings amounted to SFr2.01 billion which was a turnaround from the SFr1.4 billion loss it suffered in the same quarter last year. [11]
Also in July 2010, UBS Wealth Management Americas hired a team that generated $3 million in annual fees and commissions while most recently working for Goldman Sachs' corporate executive-focused division Ayco. The Dallas-based team of Trevor Fahr, David Folmnsbee, Andrew Noone and Ryan Anderson previously oversaw $558 million in client assets.[12]
Key People
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Marcel Rohner | Member of Board |
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Peter Kurer | Chairman |
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Oswald Gruebel | CEO and Board Member |
The recent financial turmoil at UBS toppled both top office-holders inside 12 months: Chief Executive Peter Wuffli in July 2007 and Chairman Marcel Ospel in April 2008. New UBS CEO Marcel Rohner has been a member of the UBS Group executive board since 2002 and had been Wuffli's deputy since January 2006.[13] He was also appointed CEO of Investment Banking in October 2007 after previously serving as CEO of UBS's Wealth Management & Business Banking unit. He joined UBS AG predecessor SBC in 1992 and since 1999 has served as group chief risk officer.
New UBS Chairman Peter Kurer served his seventh year as group general counsel until April of 2008[14] when he received the call following previous Chairman Ospel's sudden departure after another bad earnings month. The sudden appointment of 58-year-old Kurer, a company insider with no experience as a banker, to the UBS chair has been sharply criticized by some shareholders.[15] Kurer joined UBS as group general counsel in 2001 after 10 years as a partner at Zurich law firm Homburger and another 10 years at Baker & McKenzie, also in Zurich.
Oswald Gruebel is the current CEO of UBS AG, effective in February 2009. He is also a member of the UBS Group Executive Board (GEB).[16]Gruebel made the news in July 2011 when analysts began doubting his UBS pretax profit estimate of 15 billion Swiss francs ($18.3 billion). News reports predicted that this figure would have to drop by as much as 20 percent in 2014 due to troubled markets.[17]
John Savercool John Lothian Newsletter Interview
How the Presidential Election Impacts Dodd-Frank: UBS Lobbyist John Savercool Interview
John Savercool, senior lobbyist and managing director of UBS Americas knows his politics. A 23-year veteran of Capitol Hill, Savercool recently spoke at the CTA EXPO in Chicago about the presidential election and prospects for Mitt Romney and President Obama next month. Savercool sat down with JLN editor-in-chief Jim Kharouf and spoke about the impact the presidential election will have on financial markets and Dodd-Frank, his expectations for coming Dodd-Frank rules, and what legislation is on his radar for next year. [18] Watch at MarketsWiki.tv
Registration
- UBS FINANCIAL SERVICES INC - NFA ID: 0001366
References
- ↑ Our company. UBS.
- ↑ UBS Shuffles European Mergers Team. Wall Street Journal.
- ↑ Head of UBS Investment Bank Unit Steps Down. New York Times Dealbook.
- ↑ UBS AG: a short history. UBS.
- ↑ U.S. Makes Formal Request for UBS Data. The Wall Street Journal.
- ↑ Press Release. CFTC.
- ↑ Key facts. UBS.
- ↑ UBS to Write Down Another $19 Billion. New York Times.
- ↑ UBS Plans More Job Cuts. WSJ.com.
- ↑ UBS to Pay $81 Million in Auction-Rate Case. Wall Street Journal.
- ↑ UBS builds on resilient core. FT.
- ↑ UBS adds $3 million team from Goldman. Reuters.
- ↑ Marcel Rohner. BusinessWeek.
- ↑ Peter Kurer. Forbes.
- ↑ Kurer replaces Ospel as UBS chairman. SwissInfo.com.
- ↑ Oswald J. Grübel. UBS.
- ↑ Gruebel’s Goals Obsolete as Capital Demands, Markets Weigh on UBS Profit. Bloomberg.
- ↑ How the Presidential Election Impacts Dodd-Frank: UBS Lobbyist John Savercool Interview. MarketsWiki.tv.
