According to BlackMediaScoop.com, Londonofficials are investigating UBS trader Kweku Adoboli after he admitted losing $2 BILLION dollars from “unauthorized” trading!
The City of London police arrested 31 year old Adoboli in London yesterday on suspicion of fraud and abuse of position in connection with unauthorized trading at UBS’s investment bank. Adoboli remains in custody during the probe, Commander Ian Dyson said yesterday.
UBS is still investigating the matter, the Zurich-based banksaid in a statement. No client positions were affected, and it may be unprofitable in the third quarter because of the loss, UBS said, declining to comment further.
Adoboli may have one thing working in his favor. UBS’ internal systems didn’t blink at Adoboli’s $2 billion screw-up; it only came to light because he brought it to his bosses’ attention. Basically, he confessed to the screw up!
This drama is likely to undermine confidence in UBS’ ability to manage risks. Why did the systems not spot this before it got out of control?” asks one business professor. “He must have found a way round the system to get this far into debt.”
The UK’s Financial Services Authority is investigating why UBS didn’t spot the trades itself, and Swiss authorities are now pressuring the bank to either close its investment operations or spin them off into a business separate from its retail banking unit.