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The UBS Response

Monday Sept 19, 2011

UBS has responded that there is nothing one can do to stop someone with criminal intent. 

Please read this response posted on Business Insider.

The comment that one should not put someone from the back office,the area that processes trades, into the front office, the area that executes trades. As noted this was true of most rogue traders. 

And in talks before the SA Institute of Internal Auditors, I have noted the same thing about Bernie Madoff. As a Principal at the NASD he knew what the NASD auditors looked for, and what they ignored. 

Structuring an internal control systems for a brokerage firm amid the derivative trading of today is beyond the limits of this blog post. We study internal control in financial accounting and audit. Perhaps this would make an excellent case study!  

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3 responses to “The UBS Response”

  1. Luis Martinez Avatar
    Luis Martinez

    It is stunning that the UBS CEO would say such criminal activity can’t be stopped. He must have been misquoted! Either that, or he’s an idiot. More than 2 billion dollars are gone. I would accept a fraction of that as a fee for setting up systems to catch crooks like that (and, of course, I would not be averse to accepting the whole amount, too). Ha ha!

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  2. Laura Dorantes Avatar
    Laura Dorantes

    The article criticizes Oswald Grievel (UBS’ CEO) for not having “build systems that are as robust as possible to human nature,” therefore he failed in his job.” Grievel said there was nothing he could do to prevent people to steal, but he is wrong because as CEO he is supposed to look for the best of the company. This company is in urged need of internal control in order to avoid such losses. Internal controls are supposed to protect the company against such losses; it should provide protection to the assets and follow laws and regulations.

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  3. Clayton Thayer Avatar
    Clayton Thayer

    I agree with Laura. Being that big of a company, there is no excuse why there is no internal control to prevent theft like this. Grievel should be held responsible for being so casual with many peoples money and acting like it is not a big deal.

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