A rogue trader at UBS has blown a $2 billion (SFr1.75 billion) hole in the accounts of Switzerland’s largest bank.
UBS warned that the unauthorised trading by one of its investment bankers is likely to negatively impact its third quarter results. Shares plunged more than eight per cent on the news to under SFr10 per share.
The bank added that no clients had been affected, leading to the likely conclusion that the rogue trader had been gambling with the bank’s own money.
The discovery is the latest in a series of blows that have pounded the bank in the past three years.
UBS was Switzerland’s only bank to receive a state bail-out after being burned by the financial crisis. And in 2009, UBS was forced to pay a huge fine and subsequently release names of nearly 5,000 clients after being caught helping US clients evade taxes.
The bank, that announced 3,500 job cuts last month, is also facing a series of law suits in the US from clients and institutions that lost money during the financial crisis.
UBS said it had launched an investigation into the rogue trader’s activities.
Meanwhile, police in London say they have arrested a 31-year-old man on suspicion of fraud in connection with the case.
swissinfo.ch and agencies