UBS losses $ 2 billion in fraud

Geneva: UBS AG on Thursday said an unauthorised trader has caused it a loss of whopping $2 billion, a development that could push the Swiss banking major into a loss for the September 2011 quarter.

The alleged fraud comes at a time when the banking giant is slowly recovering from the blows of the 2008 financial meltdown that had caused huge losses for the entity.

Without divulging much details, UBS in a brief statement said no client positions were affected due to the incident.

The alleged fraud comes at a time when the banking giant is slowly recovering from the blows of the 2008 financial meltdown.

UBS said it has discovered a loss due to unauthorised trading by a trader in its Investment Bank.

"The matter is still being investigated, but UBS's current estimate of the loss on the trades is in the range of $2 billion. It is possible that this could lead UBS to report a loss for the third quarter of 2011," it said.

Meanwhile, the Wall Street Journal has reported that British police has arrested a man in London on suspicion of fraud by abuse of position.

Quoting a person familiar with the matter, the report said, "The man arrested is Kweku Adoboli, a London-based trader on UBS's exchange-traded-fund desk in London".

According to the publication, UBS discovered the huge loss late Wednesday and the bank is still working to ensure that all positions are closed.

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