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.