UBS AG announced that CEO Oswald Gruebel has resigned and that Sergio Ermotti will assume the top spot at the Swiss bank on an interim basis.
The move comes in the wake of the firm losing more than $2.3 billion in a rogue trading incident.
“The board regrets Oswald Gruebel's decision,” UBS Chairman Kaspar Villiger said in a statement released Saturday morning. “Oswald Gruebel feels that it is his duty to assume responsibility for the recent unauthorized trading incident. It is testimony to his uncompromising principles and integrity.”
The decision comes after UBS’s executives and board met this week in Singapore. Gruebel decided to resign even though he was not asked to step down immediately, Villiger said in a conference call.
UBS’s board is “deeply disappointed” by the rogue trading incident, UBS’s statement said, and said it could lead it to a loss in its third quarter. The news emerged earlier this month when UBS discovered one of its traders had engaged in misconduct. That alleged trader, Kweku Adoboli, was arrested Sept. 15 and charged with fraud and false accounting in the United Kingdom.
Adoboli’s attorney, Patrick Gibbs, did not enter a plea during a court hearing Thursday in London, according to the New York Times. The next court hearing in the case will be Oct. 20.
From here, UBS plans to search for a permanent successor to Gruebel and fully back all the investigations into the rogue trading scandal to prevent it from happening again, its statement said.
The Swiss bank also added more detail to its plans for changes to its investment bank, while reaffirming its commitment to the wealth management side.
"We are committed to further expanding our already leading global wealth management franchise,” Villiger said. “The investment bank will continue to strengthen its alignment with UBS's wealth management businesses, in addition to serving its corporate, sovereign and other institutional clients. In the future, the investment bank will be less complex, carry less risk and use less capital to produce reliable returns and contribute more optimally to UBS’s overall objectives."