Over the past year or so, a lot of people have chosen to voluntarily leave UBS, which may have something to do with the fact that people would like to get paid. While a handful of marquee names (within the industry) have been lured with big checks, many senior bankers have heard nary a peep re: bonuses in several years (the staff’s pay overall being nothing to write home about, either), and with morale taking a hit in the wake of suggested layoffs and someone losing the place $2.1 billion, employment with places where you’re robbed at knifepoint look good. The last time staffers inquired about compensation, investment-banking chief Carsten Kengeter told them to put a sock in it. So, some may be a bit gun-shy about bringing it up again. Happily, today brings exciting news. Some people are getting a raise! Read more »
Former UBS Director Sentenced To 33 Months In Jail Has Plans To Get Into The Culinary Industry Post-PrisonBy Bess Levin
Remember, back in April, when a bunch of UBS employees, were escorted out of the building and told not to come back, “pending an internal review into their conduct”? At the time we knew all four worked in operations and that they “were responsible for securities movements and payments,” and speculated that perhaps this was another RBS/Jim Glover-esque incident. Today, some other details have been filled in.
Reilly, 34, of Congers, N.Y., was sentenced today by Senior United States District Judge Warren W. Eginton in Bridgeport to 33 months of imprisonment, followed by three years of supervised release, for stealing more than $673,000 from UBS, his employer. According to court documents and statements made in court, from 1999 to April 2011, Reilly was employed at UBS in various positions. Most recently, Reilly worked at the Stamford office of UBS Securities, LLC, a wholly owned subsidiary of the parent company. From November 2007 through January 2010, Reilly held the position of director within the settlements group and, as such, was responsible for overseeing various activities, including managing and maintaining suspense accounts and making sure that accurate payments were made to and by UBS on a daily basis. From approximately February 2009 to April 2011, Reilly was responsible for approximately 84 fraudulent wire transfers that caused more than $673,000 of company funds to be transferred to his own personal accounts…Reilly used his position as a director in the settlements group to cause subordinates to make false journal entries and fraudulent wire transfers without them knowing that the entries were false and that the transfers were going to Reilly’s personal accounts. Today, Reilly was ordered to pay restitution in the amount of $673,447.47.
According to the sentencing memo, Reilly stole from the good people at UBS to feed a gambling addiction that often found him sports-betting on the job (by his own estimation, at the height of his problem Reilly would spend “8 hours gambling and 2 hours working”) and sometimes on cruise ships. Read more »
Occupy London campaigners have taken over a derelict building owned by investment bank UBS…The building they have taken over at Crown Place belongs to, but is not occupied by, UBS and no business transactions take place there. The activists plan to set up a “bank of ideas” there tomorrow and open the disused offices and meeting rooms to “those who have lost their nurseries, community centres and youth clubs due to savage Government spending cuts”. [Telegraph]
As you may have heard, the last 6 to 12 to 36 months months have been somewhat trying for UBS investment bank chief Carsten Kengeter. Profits haven’t been exactly what he’d hoped for, the people of Stamford have (more or less) vowed to beat him with a sack of reeds should the Swiss so much as entertain the idea of leaving Connecticut, employees won’t stop jumping down his throat for one second about getting paid, there was the somewhat unfortunate matter of a $2 billion fraud coming to light, no one will give his team credit for their legitimate months and, to top it all off, it looks like he might not get that promotion he’s been gunning for and was hinted he was in the running for in his last annual review. Most recently, he’s been tasked with firing a whole bunch of employees, a sore point for those not thrilled about potentially loosing their jobs or seeing their colleagues let go. And so, despite all the stress he’s been going through, despite the higher-ups in Zurich riding him like Zorro, and despite things really not going his way, Kengeter dug deep and summoned the troops for a morale boosting session, the message of which he thought would’ve been a big hit. Read more »
Poor Sergio Ermotti was having a pretty good day today, with UBS’s stock up and clients more or less happy with the new business plan of “make 180% of your income on DVA and spend 140% of it on comp.” And then this went and happened:
UBS agreed to pay $12 million on Tuesday to settle accusations that it failed to oversee millions of short-sale trades over the last five years.
The Financial Industry Regulatory Authority, or Finra, accused the embattled Swiss bank of a “systemic supervisory failure.” The fine is among the stiffer penalties recently paid to Finra, Wall Street’s self regulator.
“The fine reflected broad gaps in their compliance system,” J. Bradley Bennett, Finra’s enforcement chief, said in an interview. “I think it’s very significant.”
Ordinarily it would be hard to get all that worked up about violations of Regulation SHO, the U.S.’s semi-prohibition on naked short selling. And that’s all this is, Reg SHO violations: UBS basically did a lot of shorting without properly locating borrowable stock, leaving them with naked shorts and settlement fails. Not great, but relatively benign for this week (or last week!).
So far, the trading scandal doesn’t appear to have significantly hurt the confidence of UBS’s wealthy clients, who had pulled hundreds of millions of francs from the bank in 2008 and 2009 after Swiss authorities had to bail out UBS following about $50 billion in securities write-downs. A bruising tax evasion battle with the U.S. also drove clients away. UBS only managed to stem the exodus of clients late last year. [WSJ]
Sources believe that Europe’s banking giants, including Deutsche Bank, UBS and Credit Suisse, along with Societe Generale and Dexia, are preparing to wield the ax in a way not witnessed since the depths of the financial crisis in 2008. “People will be fired everywhere,” said Dick Bove, an outspoken bank analyst at Rochdale Securities. [NYP]
The slow implosion of UBS investment banking is of interest at Dealbreaker not only because of our sympathy for the good men and women who sell “a whole lot of brown-bagged bottles of liquor to UBS employees every evening,” but also because of UBS management’s constantly repeated theme that the investment bank is just a helpful service provider for their real business, which in the Swiss tradition consists of managing rich people’s
tax liabilityprivate wealth.
The question is whether UBS can shrink the investment banking business enough to satisfy investors and Swiss regulators without disrupting its other operations, losing lucrative clients or costing too much. With a smaller investment bank, UBS expects earnings growth to come from attracting high-net-worth clients with services and products created by linking investment banking and wealth management closer together, especially in Asia. For example, UBS would help a family-owned business in Hong Kong sell shares on the stock market and then offer advice on how to manage the proceeds.
“The increasingly close relationship we enjoy with wealth management allows its clients to more actively benefit from the full capabilities the investment bank offers,” Mr. Kengeter said in an interview this month. “In today’s market and regulatory environment, that proposition has never been more compelling.”
Now, this is sort of self-serving and ridiculous. If my family owned a Hong Kong IPO-candidate business, I would want the best capital markets bank to take it public, and then I’d want the best private wealth bank to manage my loot. If those two banks were the same, great, but I’m not going to give that IPO business to a bunch of incompetents just because they work for the same legal entity as a guy who’s the best in the world at getting Knicks tickets and investing all of my money in phantom swaps with Kweku Adoboli.
Read more »
If your employment with the Swiss bank falls in the investment bank, consider getting to keep your job this year’s bonus. Read more »
As you may have heard, around 100,000 financial services employees are set to be laid off by the end of the year (with the cuts already beginning for some). How will those made redundant attempt to get back in the game? Some will hire headhunters. Others will reach out to friends in the industry. Yet others will post their resumes on employment websites, hoping to catch a nibble. And a small but apparently growing group of people will take the less traditional path of driving a New York City cab, which offers the dual-function of an income and a captive audience for your pitch.
Tough times have prompted more New Yorkers to seek financial relief and upward mobility in the taxi trade. The number of licensed city cabbies has risen by 10 percent since the stock market began its decline in late 2007, according to the Taxi and Limousine Commission. License renewals are up, too, officials said, suggesting that drivers who used to move on to higher-paying jobs are sticking with the hack trade for now. At Master Cabbie Taxi Academy in Long Island City, Queens, instructors have noticed an increase in former financial workers since the recession began. “As they lay off, people come through,” the owner, Terry Gelber, said.
Scott Curtis, for instance, worked on Wall Street for 25 years until he was made a casualty of the recession. When he first lost his job, he got in touch with a few recruiters and signed up with Monster, though neither helped him land a position with a hedge fund, where he’s hoping to end up.
“There are 20 million other people on Monster.com,” said Mr. Curtis, who chats up his fares in case a chief executive or headhunter has stumbled in. “I thought people would see this, and think, ‘He’ll go the extra yard to go and get a job.’ ” Passengers who climb into Mr. Curtis’s cab are greeted by a laminated sheet of paper reading: “Ask to see my résumé. You won’t be sorry!” It has led to three interviews, one with a major British bank, though none has yet resulted in a job offer. Mr. Curtis, who is hoping to land a hedge-fund position, said he decided to become a cabby after having little luck with traditional headhunters and job Web sites. “I just figured the best way to market myself was to be driving around town with a sign that said: ‘Hey, help me! I need a job!’ ” he said.
While cab-driving offers the laid-off a unique opportunity to get their names out there, “exploit the inefficiencies of the market” (“Herb Reyes heads to the usually deserted Avenue of the Americas in Midtown rather than the Meatpacking District, where he knows bankers who work the Asian markets will be looking for rides”), and earn “all-cash wages” as opposed to 90% stock/10% cash deferred over 12 years, it does come with some downsides, like ferrying around idiot first-years who you’re pretty sure don’t know dick about finance. Read more »
The company said it plans to take “appropriate disciplinary action” against other individuals in the Equities business” as a result of the trading incident. UBS said it also expects to take disciplinary action “against responsible staff in other functions.” [WSJ]