Rogue Trader Cost UBS $2 Billion
September 15th, 2011If UBS lost $2 billion, who wound up with it?
Via: Reuters:
Swiss bank UBS said a trader had lost it around $2 billion in unauthorized deals, and police in London arrested 31-year-old Kweku Adoboli in connection with the case.
Adoboli — a director of exchange traded funds and “Delta 1” working in the bank’s London office, according to his profile on networking site LinkedIn — was arrested on suspicion of fraud, sources told Reuters.
“I can confirm that an employee of the bank was arrested in London in connection with the statement,” a UBS spokesman said.
UBS said it might post a third-quarter loss after the rogue trades, a huge blow as it struggles to rebuild its credibility after years of crises.
The loss effectively cancels out the 2 billion-franc saving that the bank had hoped to make in a cost-cutting program announced last month in which it will axe 3,500 jobs.
It also threatens the future of UBS’s investment bank, which is being reviewed by chief executive Oswald Gruebel as part of a wide-ranging restructuring following heavy losses in the credit crisis and a damaging scandal over bankers helping rich U.S. clients dodge taxes.
UBS, which said no client positions were affected, is scheduled to hold an investor day on November 17 at which it was expected to announce major restructuring of the investment bank.
“The matter is still being investigated, but UBS’s current estimate of the loss on the trades is in the range of $2 billion,” the bank said in a statement.
