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Things are not always as dumb as they seem, which, in case you were wondering, was the reason why
UBS(UBS) did not top our list last week after news hit about a rogue trader allegedly racking up $2 billion in losses at the Swiss bank. You see, before we can officially label something as "dumb," we need all the facts and when the UBS story broke there were still too many holes in it for our comfort.
For example, we didn't know whether the alleged rogue trader Kweku Adoboli acted alone or if he had help. We also didn't know whether it was an "honest" mistake. (Hey, we've all heard about fat finger trades. Maybe this guy had a huge freaking finger.) And in the end, we felt it best to wait until more specifics about this massive screw-up were revealed.
Now that a week has passed and more pieces have been added to the puzzle, we feel even more confident that our decision to hold off was the right one.
Yes, it is true that things are not always as dumb as they seem, because in this case they were $300 million dollars dumber! In the week since the scandal first broke, the Swiss banking giant has raised its estimated loss to $2.3 billion. Apparently, a $2 billion loss was not embarrassing enough for UBS so they topped it off.
And what is even more humiliating for the bank is that Oswald Gruebel, the chief executive of UBS, has dismissed calls for his resignation as politically motivated. Gruebel told a Swiss newspaper, "I'm responsible for everything that happens at the bank. But if you ask me whether I feel guilty, then I would say no."
Oswald, you have got to be kidding us! Politics are not the reason why you should consider stepping aside. You should consider resigning because you have no clue what's going on in your bank.
On your watch, some back office
nebbish-turned-ETF trader lost 2 billion, sorry, 2.3 billion bucks! We're not blaming you for the bad trades, but come on! You've got to feel a little guilty about something, especially after you told analysts back in June that "we have no undue risk in our positions... I'm pretty convinced that we have one of the best risk managements in the industry."
And what we've also learned since last week is that the London-based Adoboli has been falsifying trades for more than three years. That means this funny business has been going on since Gruebel came out of retirement in 2009 to stamp out risky business practices at the bank after it was forced to take a $60 billion bailout from the Swiss government in the wake of the financial crisis.
In other words, the majority of this massive trading oversight has come on Gruebel's watch, so he's linked to this scandal -- and our Dumbest list -- whether he likes it or not.
Written by Gregg Greenberg in New York.