KPMG to Lead UBS Investigation
The Financial Services Authority (FSA) has announced that KPMG will lead an independent regulatory investigation into the events at UBS which have seen the bank lose $2.3bn (£1.5bn) as a result of alleged rogue trades.
KPMG will work on behalf of the FSA and the Swiss regulator Finma. The terms of reference and timelines for the inquiry have yet to be worked out, but the firm will be looking at whether there was a failing in checks and controls at the bank which allowed alleged rogue trader Kweku Adoboli to create a series of fictitious trades to cover losses on unauthorised speculative trading in various stock market index futures.
The appointment, which comes contrary to reports suggesting Deloitte had won the work, is likely to cost millions. UBS, rather than the regulators, will pick up the bill.
Adoboli is currently in custody and is due in court next month to face fraud and false accounting charges dating back to 2008.
Following KPMG's appointment, UBS is expected to name its own independent investigator. As KPMG is now working for the regulators and Ernst & Young is the bank’s auditor, PwC and Deloitte have emerged as the favourites to take on this role.