==Wealthfront to be acquired by UBS for $1.4 bln

ZURICH, Jan 26 (Reuters) - Swiss bank UBS has agreed to buy U.S.-focused automated wealth management provider Wealthfront, which has more than $27 billion in assets under management, in an all-cash deal the two companies said was worth $1.4 billion.

Wealthfront was founded by Benchmark co-founder Andy Rachleff and Dan Carroll in 2008 as kaChing, a mutual fund analysis company, before pivoting into wealth management.

• Assets under management: 25 billion USD
• CEO: Andy Rachleff (Oct 31, 2016–)
• Founder: Andy Rachleff
• Founded: 2008, Palo Alto, CA
• https://www.wealthfront.com/

With over $27 billion in assets under management and more than 470,000 clients in the US, Wealthfront's award-winning, state-of-the-art platform helps clients easily manage their wealth by providing access to financial planning capabilities, banking services and investment management solutions. Following the transaction, Wealthfront and its clients will benefit from access to UBS's leading wealth management capabilities, including the UBS Chief Investment Office's best-in-class thought leadership, an unrivaled global footprint, and deep products and services shelf.

"Adding Wealthfront's capabilities and client base to our global investment ecosystem will significantly boost our ability to grow our business in the US," said Ralph Hamers, Group Chief Executive Officer of UBS. "Wealthfront complements our core business in the US providing wealth management to high net worth and ultra high net worth investors through trusted relationships with financial advisors, and will enhance our long-term ambition to deliver a scalable, digital-led wealth management solution to affluent investors."

Wealthfront's primary focus is on millennial and Gen Z investors, a client segment with significant domestic growth potential. With more than 130 million investors in the US alone, millennials and the Gen Z population together comprise a high growth segment that will own an increasing share of the world's wealth. As UBS looks to establish and grow relationships with additional affluent clients, Wealthfront's capabilities will become the foundation of its new digital offering which will also include access to remote human advice. In addition, Wealthfront will expand UBS's existing offering through the firm's Wealth Advice Center, which focuses on serving core affluent clients, and its Workplace Wealth Solutions business, which works with employees of corporate clients on equity plan participation, financial education and retirement programs.

"Partnering with UBS will allow Wealthfront to offer our clients additional value-added services and best in class research that will help accelerate our vision to make growing wealth delightfully easy," said David Fortunato, Chief Executive Officer of Wealthfront. "We couldn't be more excited to have found a strategic partner who has the same view on the power of technology as we do. We look forward to providing our service to even more millennial and Gen Z investors."

Wealthfront's existing clients will see no immediate change to their experience and can look forward to benefiting from UBS's breadth of products, services, and intellectual capital. Clients will continue to have access to automated investing and personalized financial planning, which provides the ability to link and view outside accounts to better tailor services to each individual client. In addition to investing services, clients will also continue to have access to Wealthfront's banking services, including securities backed loans, instant transfers to investment accounts, direct deposit, bill pay, and transfer services.

Wealthfront will become a wholly owned subsidiary of UBS and will operate as a business within UBS Global Wealth Management Americas. The transaction is currently expected to close in the second half of 2022, subject to closing conditions including regulatory approvals.

UBS Investment Bank is serving as financial advisor to UBS and Sullivan & Cromwell is acting as legal counsel. Qatalyst Partners is serving as Wealthfront's exclusive financial advisor and Fenwick & West is acting as legal counsel.

UBS Reports a $2 Billion Loss by a Rogue Equities Trader

Kweku Adoboli, a 31-year-old trader at UBS (UBS), was arrested in London. Adoboli was accused of costing UBS $2.3 billion by making unauthorized trades. An Oct. 20 Bloomberg story noted that "the trading losses prosecutors claim he was responsible for led to the departures of Chief Executive Officer Oswald Gruebel and the co-heads of the Swiss bank's global equities business."

A 31-year-old man who works for Switzerland’s largest bank was arrested Thursday in London on suspicion of fraud.

UBS said on Thursday that a rogue trader in its investment bank had lost $2 billion, delivering a fresh blow to the beleaguered Swiss bank.

The police in London have arrested a European equities trader, Kweku Adoboli (left), in connection with the case, according to a person with direct knowledge of the situation who was not authorized to speak publicly.

The incident raises questions about the bank’s management and risk policies at time when it is trying to rebuild its operations and bolster its flagging client base. The case could also bolster the efforts of regulators who have been pushing in some countries to separate trading from private banking and other less risky businesses.

The revelation about the rogue trader comes as the bank tries to regain its financial footing. Last month, UBS announced it would shed 3,500 jobs, following poor second-quarter results. In an internal memo, the bank said the unauthorized trading could drag down earnings in the third quarter to a loss, adding that “no client positions” were involved in the “unauthorized trading.”

UBS goes under cover in clothing

Swiss banking giant UBS has issued a strict dress code for employees, calling on them to wear "skin-coloured" lingerie and to ditch "fancy and coloured" artificial fingernails.

In a document of over 40 pages, UBS underlined details from head to toe, including permissible hairstyles, what cut of skirt and which type of socks to wear.

Women should not wear "flashy" jewellery or skirts that are "too tight behind."

Underwear must not be "visible against clothing or spilling out of clothing. "Rather, they should be "skin-coloured under white shirts."

Employees should ensure that natural roots are not showing if they have coloured their hair.

Men should wear a "straight-cut two button jacket and pants that make up part of a classic professional suit."

They should not wear ties that do not match the "morphology of the face" nor socks with cartoon motifs.

"The reputation of UBS makes up our most precious asset. Adopting an irreproachable behaviour implies having an impeccable presentation," said the bank, which has been trying to rebuild its reputation since it was embroiled in a evasion scandal that lead to UBS paying the U.S. government $780 million in fines.

The move is part of a test UBS is carrying out in Switzerland across five pilot branches in an attempt aimed at re-establishing confidence in the Swiss bank's brand and mending relations with clients according to the Wall Street Journal.

Global head of equities at UBS quits

Daniel Coleman, the global head of equities for UBS, has resigned from his post after 24 years with the Swiss bank, it has been reported.

News of his departure was circulated via an internal memo at UBS, which was then leaked to the media.

While Mr Coleman is to stay on at the bank "for the next few months" in an advisory capacity, his chief duties have been handed over to Neal Shear, global head of securities at UBS.

One unnamed executive at the Swiss firm told the Financial Times: "Clearly it is sad that Daniel is leaving but after such a long time it is understandable that he would like to move on."

Last year was a difficult one for the company, in which it cut staff levels by 16 per cent in an attempt to return to profitability.

The job cuts eventually paid off, with UBS reporting a $1.1 billion profit in the final quarter of 2009.

UBS to launch new electronic trading facility in Europe

Financial services provider UBS is to launch a “dark pool” Multilateral Trading Facility (MTF) to allow cross trading in Europe.

According to the firm, UBS MTF will work alongside the existing UBS Price Improvement Network (UBS PIN) by offering a wider array of liquidity to its members.

The MTF is still awaiting regulatory approval and will be based on a Central Counterparty (CCP) model, which will allow investors to mitigate certain amounts of risk.

Dr Robert Barnes, head of Market Structures at UBS Investment Bank, said: "As we developed the architecture and interactivity model for UBS MTF, we were committed to greater simplicity, lower transaction costs and reduced market impact.

“As a global bank and one of the top equities trading firms, we aim to leverage our broad and deep market experience to help us to bring innovation, quality liquidity and a unique value proposition to our clients.”

All completed transactions will be reported in real-time to Markit Boat following the trade.

Previously, global investment bank Nomura announced the launch of NX MTF in December 2009, the first broker-owned dark pool MTF of its kind.

UBS imposes executive travel ban

UBS executives who deal with foreign clients have been banned from travelling abroad by the bank amid an ongoing US investigation into its role in suspected tax evasion and fraud. 

The bank said the restrictions have been imposed while it conducts a review of its international wealth management operations and would apply to all foreign client managers. 

According to Reuters, the Swiss newspaper Sonntags Blick said over 1,000 employees will be affected by the ban. 

UBS has denied introducing the measure to ensure that senior staff are not detained by US authorities investigating the tax fraud allegations, the BBC reports. 

The bank is accused of helping thousands of American clients hide their assets from the Internal Revenue Service (IRS). 

It had previously supplied US authorities with the names of 300 clients it had advised but subsequently refused to comply with a 'John Doe' order from the IRS demanding the details of 52,000 other customers. 

In February, the bank vowed to "vigorously contest" a civil case brought by the IRS seeking judicial enforcement of the order.