UBS raises ROGUE EQUITY TRADE losses to $2.3 billion – Reuters
UBS raises rogue equity trade losses to $2.3 billion
By Emma Thomasson and Silke Koltrowitz
ZURICH | Sun Sep 18, 2011 12:55pm EDT
(Reuters) – Swiss bank UBS on Sunday increased the amount it said it had lost on rogue equity trades to $2.3 billion and alleged a trader concealed his risky deals by creating fictitious hedging positions in internal systems.
UBS stunned markets on Thursday when it announced unauthorised trades had lost it some $2 billion. London trader Kweku Adoboli was charged on Friday with fraud and false accounting dating back to 2008.
“The loss resulted from unauthorised speculative trading in various S&P 500, DAX, and EuroStoxx index futures over the last three months,” UBS said in a brief statement.
“The loss arising from this matter is $2.3 billion. As previously stated, no client positions were affected.”
Global stock markets have been extremely volatile in recent months, plunging on concerns over euro zone and U.S. debt crises and then rebounding on hopes for their resolution.
The loss is a disaster for the reputation of Switzerland’s biggest bank, which had just started to recover after it almost collapsed during the financial crisis and faced a damaging U.S. investigation into aiding wealthy Americans to dodge taxes.
“Loss even more. Reads like they’re making excuses,” said Helvea analyst Peter Thorne of the UBS statement.