Man Arrested After 'Rogue Trader' Costs Swiss Banking Group UBS US$2bn
A 31-year-old man has been arrested in London in connection with an investigation into rogue trading at UBS, which has cost the Swiss banking group around US$2bn (£1.3bn).
The suspect, named in reports as Kweku Adoboli, who according to his LinkedIn profile worked as a director in European equity trading, was arrested at 03:30 on Thursday on suspicion of fraud by abuse of position. He remains in police custody.
The arrest came hours after the bank, which employs 6,000 people in the UK, announced it had made the loss "due to unauthorised trading by a trader".
The group said the matter was under investigation, but warned it could lead it to report an overall loss in its third-quarter figures to be released in October, the Financial Times reported.
"The matter is still being investigated, but UBS's current estimate of the loss on the trades is in the range of $2bn," it said in the statement.
According to the Press Association, Adoboli worked with a product called an Exchange Traded Fund (ETF), which is an investment fund traded on stock exchanges.
One markets analyst said that the alleged rogue trade may have involved a Swiss franc transaction that came undone after the Swiss National Bank lowered the value of its currency.
Louise Cooper, markets analyst at BGC Partners, said the arrest would raise questions about its risk management strategy and do damage to its reputation.
Shares in the bank dropped by 9.6 per cent in Switzerland over the news.