Last Friday, the second circuit dismissed a potential shareholder class action that sought to hold Union Bank of Switzerland (UBS) responsible for losses that occurred when a rogue trader went of the reservation and created approximately $2.3 billion in losses. The court reasoned the plaintiffs hadn't’t shown the bank intended to hide the losses from its shareholders. The court also held the plaintiff had not shown the bank or its officers benefited in anyway from the alleged cover up. The basis for the suit was the lack of risk management on the part of UBS which allowed the trader to create such massive losses in the firm trading accounts.
The trader Kweku M. Adoboli’s highly leveraged bets hurt the UBS bottom line in 2011 and shook shareholder and trading partner confidence. For his actions, he received
seven years in prison after a jury convicted him on two counts of fraud in 2012.
Although, this was good news for UBS, the massive Swiss Bank and Brokerage still has a number of unresolved issues including the Puerto Rican closed-end bond fund scandal and U.S. Department of Justice inquiries into tax evasion allegations.
If you have lost money with UBS related to broker negligence, misrepresentation or fraud, please contact the experienced securities fraud attorneys at Colling Gilbert Wright & Carter for a free case evaluation. You may be entitled to damages for your losses.