Rogue trader costs Swiss bank $2 billion
Police in London arrested on Thursday a 31-year-old man alleged to have lost Swiss banking giant UBS $2billion through unauthorised trading.business Updated: Sep 15, 2011 23:31 IST
Police in London arrested on Thursday a 31-year-old man alleged to have lost Swiss banking giant UBS $2billion through unauthorised trading.
The man, arrested before dawn in central London on “suspicion of fraud by abuse of position,” is in police custody.
Two minutes before trading began on the Swiss stock exchange, the bank issued a statement that it “has discovered a loss due to unauthorised trading by a trader in its Investment Bank.”
The announcement is a severe blow to the bank’s retrieved reputation after the financial crisis which tarnished the standing of Swiss banking, as well as to its profit outlook and puts a question mark over the investment banking division.
UBS said: “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 added that it may also be forced to report a loss for the third quarter due to the unauthorised trade.
The news sent shares in the bank nosediving. At mid-day, it was down 7.50% at 10.11 francs.
The bank assured clients however that their positions were not affected.
When contacted, UBS would not give further details.