A FORMER computer systems administrator for UBS PaineWebber, the broker, was yesterday charged with securities fraud after allegedly using a “logic bomb” to cause more than $3 million (£1.9 million) of damage to the company’s computer systems.

Roger Duronio, 60, of Bogota, New Jersey, was indicted by a US federal grand jury, after prosecutors alleged that he had planted the device in 1,000 of UBS PaineWebber’s 1,500 networked computers in an attempt to disrupt trading and force down the share price of the broker’s parent company. Logic bombs are disruptive computer programs concealed within software.

The indictment said that Mr Duronio had bet on a fall in the share price of UBS, the Swiss bank that owns UBS PaineWebber, by buying $21,762 of derivatives contracts which would rise in value as UBS fell, before the program’s activation. He had access to all the company’s terminals as part of his job. He also had a link to the systems from his home computer.

Mr Duronio resigned from his job on February 22, after complaining about his salary and bonuses. The “logic bomb” was set off on March 4 when it began to delete company files.

UBS Paine Webber said no client had lost money as a result of Mr Duronio’s alleged activities. A spokesman said the company had activated redundant systems to enable trading to continue after the program was discovered. The share price is not thought to have been affected as a result of the alleged fraud.

Christopher Christie, US attorney-general for New Jersey, said: “Cybercrime against financial institutions is a significant issue. Although the damage was contained in this case, the potential for catastrophic damage in other cases is always there.”

Mr Duronio was also charged with computer fraud. The two offences carry penalties of up to 20 years in prison and fines of up to $1.25 million.