UBS AG

UBS AG (; ; ) is a financial services company, headquartered in Basel and Zürich, Switzerland. It also has a major presence in the New York metropolitan area with a large volume of offices located in Manhattan, Jersey City, New Jersey, Weehawken, New Jersey, and Stamford, Connecticut. It is a private banking, investment banking and securities firm. It is also a global asset manager and does retail and commercial banking in Switzerland. UBS has invested assets of 2.766 trillion Swiss francs (CHF), shareholders' equity of 47.850 billion CHF and market capitalization of 150.663 billion CHF. UBS AG is the world's largest wealth manager.

The AG in the company's name means Aktiengesellschaft, a type of publicly-traded company in Switzerland and other German-speaking countries.

History

UBS was formed through a merger of the Union Bank of Switzerland and the Swiss Bank Corporation in June 1998. The first chairman of the merged bank had to step back in October 1998 already due to the Long-Term Capital Management crisis, which affected the Union Bank of Switzerland. UBS is no longer an acronym but is the company's brand, like 3M or BP. In 2000 it acquired PaineWebber Group Inc. to become the world's largest wealth management firm for private clients. Invested assets in all wealth management businesses, including the U.S., total CHF 2.766 trillion.

UBS is present in all major financial centers worldwide, with offices in 50 countries. According to the UBS website, the bank had 70,210 employees on March 31, 2006. The 2006 Q1 report breaks these Financial Business permanent staff down by region as: 25,645 in Switzerland, 27,356 in the Americas, in 11,341 in Europe, the Middle East and Africa (not including Switzerland), and 5,868 in Asia and Australasia.

Management

Marcel Ospel is the Chairman of the Board of Directors. The Group Executive Board is the executive body of the company. (^*) Its members are:

Group CEO: Peter A. Wuffli
Deputy Group CEO, Chairman and CEO Global Wealth Management & Business Banking: Marcel Rohner
Chairman and CEO Global Asset Management: John A. Fraser
Chairman and CEO Investment Bank: Huw Jenkins
Group General Counsel: Peter Kurer
Group Chief Financial Officer: Clive Standish
Group Chief Risk Officer: Walter Stuerzinger
Chairman & CEO Americas: Mark B. Sutton
Chairman and CEO Asia Pacific: Rory Tapner
Head Wealth Management International: Raoul Weil

Businesses

See also Swiss banking and Zurich

UBS is organized in four business groups: Global Wealth Management & Business Banking, Investment Bank, Global Asset Management, Corporate Center.

Competition

Main competitors are Citigroup, Credit Suisse, Credit Agricole, BNP Paribas, Bank of America, Royal Bank of Scotland, Deutsche Bank, Goldman Sachs, HSBC Private Bank, JP Morgan, DrKW, Morgan Stanley, Merrill Lynch and RBC among others.

Workplace

Diversity

UBS was named one of the 100 Best Companies for Working Mothers living in the U.S. in 2004 by U.S. based Working Mothers magazine. It is a member of the Stonewall Diversity Champions scheme and has active Gay and Lesbian, ethnic minority, and women's networking groups.

Records

The UBS trading floor in Stamford, Connecticut holds the Guinness World Record as the largest securities trading floor in the world. The 103,000 square-foot operation has 40 foot arched ceiling freeing it of columns or walls. The size of two football fields and home to 1,400 traders and staff who handle about $1 trillion worth of transactions a day. It is roughly 227 wide by 410 feet long.

Financials

In full-year 2005, UBS reported net profit attributable to UBS shareholders (“attributable profit”) of CHF 14,029 million, with CHF 9,844 million from continuing operations and CHF 4,185 million from discontinued operations.

For the year ended December 31, 2004

Net profit CHF 8,089 million (8.089 billion Swiss francs).
Moody's long-term credit rating: Aa2
Employees: 65,929

Significant controversies

In January 1997, Christoph Meili, a night watchman at the Union Bank of Switzerland (as UBS was then known), found the bank historian destroying archives compiled by a subsidiary that had extensive dealings with Nazi Germany, in direct violation of a recent Swiss law (adopted on December 13, 1996) protecting such material. UBS acknowledged that it had "made a deplorable mistake", but maintained that the destroyed archives were unrelated to the Holocaust. Meili was suspended from his job at the security company that served UBS, following a criminal investigation into whether his whistleblowing had violated bank secrecy laws. ^*

In 2001, UBS was blamed for refusing to extend Swissair's line of credit, forcing a grounding of Swissair's planes on October 2, 2001. UBS Chairman Marcel Ospel was blamed by many for ostensibly evading the request for an extension of Swissair's line of credit, and the day after the grounding, thousands of demonstrators marching in front of the Swissair headquarters carried a banner reading "Bin Ospel".

In April 2005, UBS lost the high profile case Zubulake v. UBS Warburg, a discrimination and sexual harassment suit. The plaintiff Laura Zubulake, a former institutional equities saleswoman at the company's Stamford office, convinced the jury that her boss had denied her important accounts and mocked her appearance to co-workers. Also, she claimed that there were several sexist policies in place, such as entertaining clients at strip clubs that made it difficult for women to socialize and foster business contacts with clients. An important event in the case was the inability of UBS Warburg to produce several incriminating e-mails of which Zubulake could provide records. The plaintiff was able to prove that UBS had destroyed relevant e-mails after the litigation hold had been in place. Because of this, federal judge Shira Scheindlin gave the jury an "adverse inference" instruction, essentially stating that the jury had to assume that the missing e-mails provided damning evidence against the defendant. UBS was ordered to pay the defendant $9.1 million in compensatory damages (including back pay and professional damage), and $20.2 million in punitive damages. The case was seen as a landmark in the realms of e-discovery, document retention, computer forensics, and human resources, particularly because the defendant's inability to produce electronic documents shifted the burden of proof to the defendant.

The Securities and Exchange Board of India (SEBI) alleged that UBS had played a role in the 2004 Black Monday stock market crash which followed the National Democratic Alliance government’s defeat in the general elections. SEBI's ruling of May 17, 2005 barred UBS from issuing or renewing participatory notes for a period of one year. The ban was later lifted on appeal, as a result of a government tribunal ruling on September 9, 2005.

On October 18, 2005, three African-American employees filed a class action lawsuit against the company in the United States District Court for the Southern District of New York alleging racial discrimination in hiring, promotion and other employment practices. The three plaintiffs in Freddie H. Cook, Sylvester L. Flaming Jr. and Timothy J. Gandy v. UBS Financial Services, Inc., claim that segregation and discrimination in job assignments and compensation were widespread and the firm had done nothing to diversify its workforce. The lawsuit also claims offices operating in Largo, Maryland and Flushing, New York were illegally created to serve African-Americans and Asian-Americans respectively, and that the firm’s management frequently ridiculed the Largo branch office and its staff, referring to it as a “diversity” office. ^*^*

References

Nolmans, Erik (Nov. 14, 2005). "UBS Fastens its Seatbelts". Fortune, p. 20.
Vincent, Isabel. Pursuit of Justice. New York: Morrow, 1997.
Fiorilla, Diego. The Life and Times of Diego Fiorilla. 2006.

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