“Rogue Trader” Takes Down UBS for $2 Billion

Talk about a major screw up! How is that if you are $.25 overdrawn the bank jumps all over your case…

And a 31 Year Old Trader with less than 5 years experience gets to play with billions of dollars unchecked?

It doesn’t appear (at least in what has been announced publicly so far) that this guy stole money – it may well be that he got nailed chasing a bad investment loss with increasingly risky (and thus higher paying) investments which didn’t work.

Rogue trades cost UBS $2bn

kweku adoboli

Kweku Adoboli

LONDON police have arrested Kweku Adoboli over alleged rogue trading that has cost Swiss banking giant UBS an estimated $US2 billion ($A1.95 billion).

Mr Adoboli, 31, worked in the bank’s exchange-traded funds business and was arrested yesterday.

Police, who declined to confirm the trader’s identity, said: ”A 31-year-old man was arrested at 3.30am in central London on suspicion of fraud by abuse of position. He remains in custody.”

Records from the City regulator suggest Mr Adoboli joined UBS as a trainee in March 2006. He was hired after studying at the University of Nottingham.

The Zurich-based bank suffered a near-10 per cent share-price fall after it revealed the loss could push it into the red this quarter. UBS, which dominates the Australian investment banking market, announced the loss just before the Swiss stock exchange opened.

UBS said it was still trying to get to the bottom of the matter, which was announced on the third anniversary of the collapse of Lehman Brothers.

It refused to elaborate but in an internal memo to staff, the executive committee of UBS revealed it only uncovered the incident on Wednesday.

”The matter is still being investigated, but UBS’s current estimate of the loss on the trades is in the range of $US2 billion,” UBS said.

”It is possible that this could lead UBS to report a loss for the third quarter of 2011.”

 

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