Rogue trader suspected in $2 billion loss at UBS BANK – Yahoo! News
AP – FILE – The Oct. 7, 2010 file photo shows workers repairing a lamp at the UBS bank in Zurich, Switzerland. …
Rogue trader suspected in $2 billion loss at UBS
By FRANK JORDANS and PAISLEY DODDS, Associated Press – 2 hrs 1 min ago
LONDON – Swiss banking giant UBS said Thursday that a rogue trader has caused it an estimated loss of $2 billion, stunning a beleaguered banking industry that has proven vulnerable to unauthorized trades.
Police in London said they arrested a 31-year-old UBS trader, Kweku Adoboli, in the alleged fraud. UBS declined to confirm his name.
Switzerland’s largest bank warned that it could report a loss for the entire third quarter as a result of the rogue trade, while shares in UBS AG plummeted 8.7 percent to 9.98 francs ($11.41) on the Zurich exchange by mid afternoon.
The case immediately evoked memories of Jerome Kerviel, the trader at French bank Societe Generale who secretly gambled away euro4.9 billion ($6.7 billion). The scale of that fraud rocked the global financial industry and prompted banks to tighten oversight rules to ensure such large sums couldn’t be traded unnoticed.
The Swiss banking regulator Finma said it was in contact with UBS about the incident, which was discovered late Wednesday.
“From the scale of this case you can be sure that it’s the biggest we’ve ever seen for a Swiss bank,” Finma spokesman Tobias Lux told The Associated Press.