Swiss Bank UBS Says Rogue Trader Caused $2 Billion Loss
"Unauthorized trading" by one of its traders has led to a loss "in the range of $2 billion," Swiss banking giant UBS announced this morning.
He reportedly worked in the bank's London equities division, Larry Miller reports for NPR, and was arrested by authorities there early today "on suspicion of using his position to commit fraud."
According to UBS, none of its clients were affected by the loss.
The Financial Times, which has identified the 31-year-old suspect, says the news "will inevitably recall the $6.8 billion hit caused to Societe Generale [in 2008] by Jerome Kerviel, a relatively junior trader in its investment bank, which caused the French group to wobble, and the actions of 'rogue trader' Nick Leeson which led to the collapse of Barings in 1995."
The Associated Press says that "in a letter sent to its employees, [UBS] said it regretted that the incident came at a difficult time. 'Although the news is regrettable, the fundamental strengths of the company won't be affected by this,' the note said. 'We ask that you continue concentrating on your customers. In these uncertain times they are counting on your support.' "
The bank's stock is down sharply in European trading today.
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