UBS Preserves Street Cred With Music Money

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Despite the minor matter of losing twelve billion dollars in the first quarter, UBS has pledged to continue sponsoring the London Symphony Orchestra until 2010. Said non-executive chairman Richrd Hardie: “To pull out at a time like this would be terribly easy, but I would say that if we did that, our reputation would be shot.” He’s right, you know. Had UBS pulled their money from the symphony, its time honored legacy of forthright behavior and “doing the right thing” would have been summarily shot to shit. As a refresher course, let’s revisit some of the bank’s reputation-building acts of courage over the last ten (ish) years:


-January 1997: A night watchman at the Union Bank of Switzerland (as UBS was then known), found the bank historian destroying archives compiled by a subsidiary that had extensive dealings with Nazi Germany, in direct violation of a recent Swiss law protecting such material. UBS acknowledged that it had "made a deplorable mistake," but maintained that the destroyed archives were unrelated to the Holocaust.
-May 10, 2004: UBS fined $100 million by the U.S.Federal Reserve for illegally transferring funds from an account set up by the Federal Reserve at UBS to Iran, Cuba and other countries presently under a U.S. trade embargo.
-April 2005: UBS losesZubulake v. UBS Warburg, a discrimination and sexual harassment suit. Case was seen as a landmark in the realms of e-discovery, document retention, computer forensics, and human resources (UBS had destroyed relevant e-mails after the litigation hold had been in place.)
-May 17, 2005: The Securities and Exchange Board of India (SEBI) alleged that UBS had played a role in the 2004 Black Monday stock market crash which followed the National Democratic Alliance government’s defeat in the general elections. SEBI's ruling barred UBS from issuing or renewing participatory notes for a period of one year.
-October 18, 2005: Three African-American employees filed a class action lawsuit against the company in the United States District Court for the Southern District of New York alleging racial discrimination in hiring, promotion and other employment practices. The three plaintiffs in Freddie H. Cook, Sylvester L. Flaming Jr. and Timothy J. Gandy v. UBS Financial Services, Inc., claim that segregation and discrimination in job assignments and compensation were widespread and the firm had done nothing to diversify its workforce. The lawsuit also claims offices operating in Largo, Maryland and Flushing, New York were illegally created to serve African-Americans and Asian-Americans respectively, and that the firm’s management frequently ridiculed the Largo branch office and its staff, referring to it as a “diversity” office.
-March 1, 2007: Mitchel S.Guttenberg, an executive director in the firm's equity research department, is charged along with 13 other individuals from various firms with insider-trading fraud of more than $15 million.
UBS to Keep Backing London Symphony Orchestra, Even After Loss [Bloomberg]

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UBS Concerned With The Company Some Of Its Employees Keep

The following is a (not at all comprehensive) list of things that UBS could legitimately be embarrassed about: - Losing so much money that a rogue trader's $2billion loss barely registered above 'meh' on the Do We Care scale - Awarding 4-figure bonuses to managing directors - Employing a guy who "implored bankers to make a more concerted effort to streamline the firm and likened the strategy to slashing expenses like a 'Jewish shopkeeper'" - Having their entire healthcare team decide Jeffereies is a better place to work - Being scammed by a bunch of ops guys - Pulling a reverse Field of Dreams and spending all the money it didn't have to build a 103,000-square-foot trading floor, in a 700,000-square-foot building, that no one wants to work on - Getting no respect from the people of Stamford, who'd prefer "a nice big Costco" move into the space - Having to distribute a step-by-step guide re: how to tie a tie And yet, rather than feel some measure of humiliation about, for instance, the PowerPoint admission that their grown men employees don't know how to dress themselves or taking the time to send out a memo that reads "Subject: Hey, Body: Stop losing so much fucking money!", the bank's execs are going with this: ...Robert Wolf, a top UBS executive in New York, is among President Obama’s leading fund-raisers, building more than $500,000 for his re-election so far this year. A regular presence at big campaign fund-raisers, Mr. Wolf, who is 50, golfs and vacations with Mr. Obama and is known for e-mailing friends photos of himself with the president. While such a close relationship might have been envied by other bankers in 2008, when much of Wall Street was infatuated with Mr. Obama and donated heavily to his presidential bid, it has been making other UBS executives uneasy of late...With media reports pointing out that one of the bank’s top executives is also one of the Obama campaign’s top bundlers — a word that one UBS executive said “makes people’s hair stand on end” inside the bank — the Swiss banking giant has decided to take an unusual step. The bank’s powerful group executive board in Zurich recently presented Mr. Wolf with an edict directing him to report all his media inquiries to the firm’s press office. Since then, most of the requests to speak to Mr. Wolf have been rejected, according to people briefed on the situation, resulting in a much dimmer limelight for Mr. Wolf...“You will clear any and all communications with the press as far in advance as possible,” the directive to Mr. Wolf read. “With respect to activities outside UBS you will, on a best-efforts basis, keep corporate communications informed.” Bosses Reign In Banker Who Golfs With Obama [Dealbook]