The British police arrested a 31-year-old “rogue trader” in London Thursday morning as Swiss banking giant UBS announced it had discovered a loss of around $2 billion due to unauthorised trading in its investment bank.
The man, identified as Ghanaian-origin Kweku Adoboli, was arrested at 3.30 am by the City of London police “on suspicion of fraud by abuse of position”. He is still in police custody.
Mr Adoboli worked as a director in European equity trading at UBS, according to his LinkedIn profile. He was earlier a student at the University of Nottingham.
The Geneva-headquartered bank said it discovered the fraud just a day before and warned “it is possible this could lead UBS to report a loss for the third quarter of 2011.”
In a statement to its 64,000-plus employees, the bank said: “While the news is distressing, it will not change the fundamental strength of our firm. We urge you to stay focused on your clients, who are counting on you to guide them through these uncertain times.” The bank employs 6,000 staff in the UK, and most of its investment bank operations are based in London and New York.
UBS last month announced plans to axe 3,500 jobs to save costs, but the fraud will come as huge blow. The bank, one of the first to be hit by sub-prime losses in early 2008, was rescued by the Swiss government later that year.