Last month, struggling investment bank UBS said would get rid of 3,500 jobs, as a way to help achieve $2 billion in savings. Now, UBS has more trouble, as a "rogue trader" apparently lost $2 billion—yes, $2 BILLION—in unauthorized deals.
Kweku Adoboli was arrested in UBS's London office. According to Reuters, he was "director of exchange traded funds and Delta 1 trading... UBS said it discovered the problem on Wednesday afternoon, and police said they had launched an investigation... The University of Nottingham computer science and management graduate was described by a former landlord as a good tenant of a 1,000 pound ($1,600) per week apartment close to UBS in London's East End, where he lived until recently."
UBS says clients' money was not harmed, but the NY Times reports, "The incident raises questions about the bank’s management and risk policies at time when it is trying to rebuild its operations and bolster its flagging client base. The case could also bolster the efforts of regulators who have been pushing in some countries to separate trading from private banking and other less risky businesses."
The Swiss firm has been considering a move from its huge Stamford, CT offices back to NYC. And back in 2008, a French trader at Societe Generale was arrested for losing over $6 billion in rogue trades.