Rogue Trader Costs UBS $2 Billion in Unauthorized Deals

Police in London took Kweku Adoboli into custody on charges that he lost approximately $2 Billion in unauthorized deals.  From the article:

Adoboli — a director of exchange traded funds and “Delta 1” working in the bank’s London office, according to his profile on networking site LinkedIn — was arrested on suspicion of fraud, sources told Reuters.

“I can confirm that an employee of the bank was arrested in London in connection with the statement,” a UBS spokesman said.

UBS said it might post a third-quarter loss after the rogue trades, a huge blow as it struggles to rebuild its credibility after years of crises.

The loss effectively cancels out the 2 billion-franc saving that the bank had hoped to make in a cost-cutting program announced last month in which it will axe 3,500 jobs.

It also threatens the future of UBS’s investment bank, which is being reviewed by chief executive Oswald Gruebel as part of a wide-ranging restructuring following heavy losses in the credit crisis and a damaging scandal over bankers helping rich U.S. clients dodge taxes.

You can read the full article and see accompanying video here on the Reuters website.

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