A rogue City trader who gambled away 1.4 billion pounds ($2.2 billion) in bad deals at UBS has been found guilty of fraud. The 32-year-old Ghanaian-born Kweku Adoboli exceeded his multimillion-pound trading limits and failed to hedge trades, allegedly faking records to cover his tracks at the Swiss institutions London office. At one point, Adoboli risked running losses of up to $12 billion. Adoboli admitted to the losses, but said he was pressured by staff to take risks. Jurors at Londons Southwark Crown Court are still deliberating over a second count of fraud and four counts of false accounting.
Spain raises $6.4 billion in easy bond sale
Spain has raised nearly 5 billion euro ($6.4 billion) in a successful debt auction that saw strong demand as the country holds off on seeking international help to manage its finances. The Treasury sold 4.2 billion euro in 12-month bills at an average interest rate of 2.79%, down slightly 2.82% in the last such auction October 16. It sold (euro) 712 million in 18-month bills at a rate of 3.03%, up from 3.02%. Demand on Tuesday was more than double the amount offered for the shorter bills and nearly six times for the longer bills. Spain, which already has been offered 100 billion euro to help refinance its struggling banks, says it wants to know all the conditions that might come attached to any rescue package before deciding to apply for further international assistance.
Credit Suisse shakes up executives, bank divisions
Credit Suisse Group says it is overhauling its investment banking division and merging its private banking and wealth management arms to cut costs and satisfy regulators. Switzerlands second-largest bank, which has been shedding thousands of jobs to counter falling profits, announced the shakeups Tuesday to take effect at the end of November. Chief Executive Brady Dougan said: We have restructured our investment banking model resulting in a high returning, lower risk, client-oriented business. Our private banking model is highly scalable and suited for the new regulatory environment. And we have sharpened the focus of our asset management business. Last month, the Zurich-based bank said it would boost cost-cutting as it posted a 63% fall in third-quarter profit following an accounting charge on its debt.
Glencore shareholders back Xstrata merger
Shareholders in Glencore International PLC, one of the worlds biggest commodity traders, have voted to approve a merger with Anglo-Swiss mining company Xstrata PLC. The company says the deal won approval from 99% of Glencores investors. Xstrata shareholders will vote later Tuesday. However the merged company, which would have a $70 billion market capitalisation, still requires antitrust approval from regulators in the European Union and China. Glencore already is the largest shareholder in Xstrata, with a 34% stake. The next biggest shareholder is the sovereign-wealth fund Qatar Holding LLC, with a 12% stake. Glencore is based in the Swiss town of Baar but has its main stock listing in London. Xstrata is based in the neighbouring city of Zug.
HP says acquired company lied about finances
Hewlett-Packard Co. said Tuesday that a British company it bought for $10 billion last year lied about its finances, resulting in a massive write-down of the value of the business. HP is avoiding calling it a fraud, but it said there were serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy Corporation PLC. HP is taking an $8.8 billion charge in its latest quarter to align the accounting value of Autonomy with its real value. It said most of that charge was due to the fictional bookkeeping at Autonomy.