UBS writes down $19 billion as chairman quits

Swiss bank UBS AG said it is writing down $19 billion in assets tied to the U.S. subprime mortgage mess, leading to a likely $12 billion loss this quarter and the departure of chairman Marcel Ospel. (MarketWatch) UBS also said it will seek shareholder approval to raise $15.1 billion in emergency capital through a rights issue. The bank will create a new unit to hold toxic mortgage-related assets. (Reuters) Ospel will be replaced by UBS general counsel Peter Kurer. UBS shares rose this morning in Zurich. “Behind closed doors they have been cleaning up very swiftly, and the capital increase will put them back onto a solid foundation,” said Joerg de Vries-Hippen at Allianz Global Investors. (Bloomberg)

Deutsche Bank takes $3.9 billion hit

Deutsche Bank said it will write down a record $3.9 billion in loans and asset-backed securities this quarter, citing weakness in the leveraged-loan and U.S. commercial and residential mortgage sectors. (MarketWatch) The mortgage losses are mostly on Alt-A loans, which are rated between prime and subprime mortgages. “The subprime crisis is catching up to Deutsche Bank,” said analyst Konrad Becker at Merck Finck & Co. in Munich. (Bloomberg) Separately, Lehman Brothers said it raised $3 billion in capital yesterday by selling convertible shares to U.S. investors, in a move to shore up confidence in the investment bank. (The New York Times, free registration)

IBM suspended from U.S. contract bids

International Business Machines has been temporarily banned from bidding for U.S. government contracts after the Environmental Protection Agency accused it of irregularities tied to a 2006 contract bid. IBM also said it and some of its employees had been served with subpoenas in a related federal grand jury probe. (AP in The Washington Post) IBM did about $1.4 billion in business with the federal government in 2007. (MarketWatch) The 2006 bid, worth $80 million, was to modernize the EPA’s computer system. IBM can continue working on its current contracts during the probe. Its shares dropped 1.5 percent in extended trading. (Reuters)

Hacking for the home team

As businesses face growing threats from computer hackers, more of them are training their employees to become hackers. The IT networks and computers of large U.S. companies were attacked an average of 150,000 times in 2007, with the hackers often looking to steal intellectual property or personal data. To counter these attacks, companies pay about $3,800 a head to send their IT staff to week-long “hacker boot camps,” where the employees learn how to think like hackers to better protect against them. “There used to be a big debate about whether anyone should even learn these skills,” says hacker-school instructor Jack Koziol. “Now it’s more accepted.” (The Wall Street Journal)