BUSINESS
10/05/2011 02:39 EDT | Updated 12/05/2011 05:12 EST

UBS co-heads of global equities department resign over trading scandal

GENEVA - The co-heads of UBS's global equities department resigned on Wednesday, the latest high-profile departures following the trading scandal that cost the Swiss bank $2.3 billion.

Carsten Kengeter, chief executive of UBS Investment Bank, accepted the resignations of Francois Gouws and Yassine Bouhara, the bank said in a statement.

"Their resignations come as they assume overall responsibility for the effective management of the equities business," the statement said.

Kweku Adoboli, the 31-year-old trader who was arrested in London on Sept. 15 on charges of fraud linked with the unauthorized trades, worked within that department. It will now by headed by Mike Stewart, who joined UBS from Bank of America Merrill Lynch in July.

The bank said it expects to take disciplinary action against other individuals in the department as a result of the trading scandal.

The incident pushed then-CEO Oswald Gruebel to resign Sept. 24. It has also undone the bank's efforts to clean up its image after being involved in recent years in a U.S. tax evasion investigation and sustaining huge losses on subprime mortgages during the financial crisis.

Interim CEO Sergio Ermotti has recently described the trading scandal as a "severe setback" to the bank's efforts to regain clients' trust.

Despite the heavy loss, however, UBS still expects to make a modest profit in the third quarter. It is due to announce those figures Oct. 25.