UBS reported a second-quarter loss of 358 million francs ($331 million) and announced a separation of its investment banking and wealth management units.

Last Thursday, Massachusetts regulators filed a lawsuit against UBS alleging that the bank gave conflicted advice to customers in the auction-rate securities market.

UBS is scheduled to take more losses on its mortgage holdings, as prices for these securities have worsened dramatically in the past few weeks.

Fannie Mae posted a $2.19 billion loss, forcing the company to cut its dividend and seek a $6 billion capital infusion.

UBS posted a $11 billion first quarter loss after taking a whopping $19 billion in mortgage-related losses. The company will cut 5,500 jobs in a restructuring effort to save the banking giant.

UBS reports net profit attributable to shareholders of CHF 5,622 million in second quarter 2007.

The Board of Directors has appointed Marcel Rohner as UBS's Group Chief Executive Officer, effective July 6th. He succeeds Peter Wuffli, who relinquishes all of his functions at UBS.