Thursday, September 15, 2011

Rogue Trader Loses $2 Billion at UBS; Arrested

Swiss bank UBS said a rogue trader had lost it $2 billion in unauthorized trading, and police in London arrested a man in connection with the case.

British police said they had arrested a 31-year-old man on suspicion of fraud. Swiss newspaper NZZ cited UBS as saying the trader worked in its London equities division.

"I can confirm that an employee of the bank was arrested in London in connection with the statement," a spokesman for UBS told Reuters.

Let's face it there is a lot of incompetence at these megabanks. What kind of risk management controls could UBS possibly have in place if a trader can position a $2 billion loss? About the only time these banks seem to make money is when they are playing footsie with the government.

It's therefore no surprise that it is a top UBS man, Robert Wolf, Chairman of UBS Americas and President of UBS Investment Bank, who is the major force behind the Obama Administration's infrastructure bank push.

These banks should really all be allowed to fail.

Update: London police say the man arrested in alleged rogue trading at UBS is 31-year-old Kweku Adoboli.

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