UBS 'rogue trader': Loss estimate raised to $2.3bn

UBS has raised its estimated losses due to alleged unauthorised trading to $2.3bn (£1.5bn) from an initial $2bn. The bank also said the alleged activity by trader Kweku Adoboli was uncovered after UBS began making inquiries. That prompted Mr Adoboli to admit the losses on Wednesday, UBS said. The trader was charged with fraud and false accounting at a London court on Friday. The bank's statement comes as UBS boss Oswald Gruebel insisted he would not resign over the incident. "I'm responsible for everything that happens at the bank," Mr Gruebel told Swiss Sunday newspaper, der Sonntag. "if you ask me whether I feel guilty, then I would say no." 'Fictitious' hedges Mr Adoboli has been remanded in custody until a committal hearing on 22 September. According to the charges, the fraud took place between January and September this year. The charges add that Mr Adoboli filed false accounts between October 2008 and December 2009, and from January to September 2011. However, UBS latest statement said the losses only related to trading positions taken on in the last three months. The 31-year-old worked for UBS's global synthetic equities division, buying and selling exchange traded funds, which track different types of stocks or commodities such as precious metals. Prosecutors say Mr Adoboli "dishonestly abused that position intending thereby to make a gain for yourself, causing losses to UBS or to expose UBS to risk of loss". The UBS statement claimed Mr Adoboli had conducted legitimate derivative transactions, giving the bank heavy exposure to various stock market indexes. But he had then entered "fictitious" hedges against these positions into UBS' risk management system, while in reality he had no hedge in place and was breaching the risk limits that the bank required him to work within.