Trader Lost Billions for Swiss Bank
Swiss banking giant UBS said Thursday that a rogue trader had cost it approximately $2 billion in unauthorized trades.
London police arrested UBS trader Kweku Adoboli, 31, in connection with the alleged fraud, though the bank did not confirm his identity.
UBS said it may have to report a loss for the entire quarter because of the rogue trading. Its shares plunged about 9 percent on the news. –BF
The Associated Press in Forbes:
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.
UBS provided little specific information, saying the incident was still under investigation and no client money was involved. The unauthorized transactions could cost UBS almost as much as the 2 billion Swiss francs ($2.28 billion) the bank hopes to save by cutting 3,500 jobs over the next two years.
It comes as UBS is struggling to restore its reputation after heavy subprime losses during the financial crisis that resulted in a government bailout, and an embarrassing U.S. tax evasion case that blew a hole in Switzerland’s storied tradition of banking secrecy.