16 Sep 2011

Rogue trading reported by UBS

7:37 am on 16 September 2011

UBS says it unauthorised trading by one of its traders has cost it an estimated $US2 billion.

Shares in UBS fell 8% after an announcement was made that it was investigating rogue trades.

The Swiss bank says no client's money is affected, but a letter to its 65,000 employees warns that profits could be hit.

Police in London have arrested a man in connection with the loss. Kweku Adoboli, 31, is still in custody after being detained early on Thursday.

The Financial Times newspaper reported that Mr Adoboli worked as a director of Exchange Traded Funds in the equities department.

The BBC reports previous rogue trader cases include former Societe Generale trader Jerome Kerviel who was arrested in 2008 over unauthorised trades which cost the bank 4.9 billion euros.

In 1995, Briton Nick Leeson caused the collapse of Barings bank after costing the group £800 million.