Rogue trader could cost UBS $2 billion in losses
Global investment bank UBS stands to lose $2 billion on unauthorized trades steered by a rogue trader. The significant amount of money in play could result in a third-quarter loss for the investment bank, UBS said Wednesday. The bank assured the public "no client positions were affected," in a email early Thursday. The news will be another blow to flagging European bank confidence. Fund managers surveyed by Bank of America Merrill Lynch (BAC) already believe Europe will slide into a recession in the coming months. So it doesn't help that a Swiss investment bank now appears unable to reign in rogue trading. Fox Business News is reporting British police have arrested a 31-year-old man in connection with the fraud investigation. The news site quoted Swiss newspaper NZZ as saying the trader worked in the London equities division. The Wall Street Journal claims the person of interest is Kweku Adoboli, a London-based trader working on UBS's exchange-traded-fund desk in London. The trader at the center of the investigation becomes the latest in a recent line of traders who have captured headlines by spearheading billions of dollars in tainted trades. One of the more recent examples is Jerome Kerviel who was accused of creating a $6.6 billion trading loss in a scandal that threatened the solvency of Société Générale. Write to Kerri Panchuk.