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Businesses Software The Almighty Buck IT

UBS: Our Risk Systems Did Detect $2bn Rogue Trader 151

A few weeks ago, UBS employee Kweku Adoboli (universally described as a "rogue trader") ran up a $2 billion loss for his employer; many readers wondered how it is the systems which allow trades to happen at all aren't better tuned to catch such massive cash flows without triggering alerts. Now, reader DMandPenfold submits a report from Computerworld UK in which the bank claims that such triggers were in place — they were simply not acted on. From the article: "UBS has insisted its IT systems did detect unusual and unauthorised trading activity, Interim chief executive Sergio Ermotti, who is running the company following Oswald Grubel's resignation last month, sent a memo to employees saying the bank is aware that its systems did detect the rogue activity. In the memo, Ermotti wrote: 'Our internal investigation indicates that risk and operational systems did detect unauthorised or unexplained activity but this was not sufficiently investigated nor was appropriate action taken to ensure existing controls were enforced.'"
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UBS: Our Risk Systems Did Detect $2bn Rogue Trader

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  • You must test (Score:4, Insightful)

    by TheSync ( 5291 ) on Thursday October 06, 2011 @02:22PM (#37629418) Journal

    Whenever you have a monitoring or backup solution, it must be regularly tested to ensure a responsive psychology (as well as proper device operation).

    They should have had 1 or 2 fake funny trades per month, and if the people who got the alert messages didn't respond, they should have been punished or fired.

  • Re:Called it (Score:4, Insightful)

    by ackthpt ( 218170 ) on Thursday October 06, 2011 @02:54PM (#37629936) Homepage Journal

    From my comment on the original article [slashdot.org] :

    "Let's face out out on the terrain no-one is holding these guys accountable. IT may set up the system, Risk Management may generate the reports and they'll be either modified to say what management wants to say or just plain ignored because like all gamblers these guys think they have a system which lets them keep on winning even as they are betting their house (or in this case our houses.)"

    This "blame IT" crap has gone on long enough. It's time we stood up for ourselves instead of allowing ourselves to be used as a convenient scapegoat all the time.

    How often have you seen an IT representative in front of the cameras say, "Well, we see this behaviour, the lights are flashing, the klaxons are going like a cat with its tail in a wringer, but the people who collect 7 figure salaries haven't been taking an interest so far."

    Should be criminal charges for management negligence -- and I don't mean just giving the the sack. Those protesters on Wall Street have a point, everyone gets hurt when the bank CEOs screw up, but those most responsible. Thanks to their stalwart defenders in the US Congress no stronger regulation get passed. If that's not sign that government is in the bank's pockets, I can't imagine what could be more clear.

  • by khasim ( 1285 ) <brandioch.conner@gmail.com> on Thursday October 06, 2011 @03:06PM (#37630184)

    Sorry for repeating a meme, but in this case it is extremely valid.

    First level contact was to ask the trader to recheck their transactions, then escalate to supervisors.

    IT should NEVER be involved at that level. The alerts should go to the manager (or the manager of managers) who SHOULD have more insight into the situation than IT.

    Having IT in the loop means one more failure point (and an additional delay).

  • Re:Called it (Score:5, Insightful)

    by Doc Ruby ( 173196 ) on Thursday October 06, 2011 @04:56PM (#37631938) Homepage Journal

    No, the logic of that post is perfectly clear. Someone says bank CEOs screwing up hurts everyone but those CEOs. Like people who have lost jobs, or can't get one, after bank CEO screwups destroyed the economy's growth, and the jobs with it. Herman Cain says it's the jobless person's own fault for not having a job - and even their own fault they're not rich. The contrast is that Cain says it isn't the bank CEO's fault people don't have jobs, it's their own fault.

    But that's obvious. Except perhaps to a Republican, er "Libertarian", like you. Who spent the entire Bush era telling us Chewbacca was on Endor whenever people complained that deregulation was killing us.

Nothing ever becomes real till it is experienced -- even a proverb is no proverb to you till your life has illustrated it. -- John Keats