UBS has 65,000 employees. The Swiss bank has global operations, serving approximately 50 countries. The company has been around for nearly 150 years. But one rogue trader -- reportedly Kweku Adoboli, a 31-year-old living and working in London -- has apparently brought the company to its knees in embarrassment and financial loss.
London police said they arrested a 31-year-old man Thursday on suspicion of "fraud by abuse of position" for the UBS rogue trading disaster, and that the man remains in custody. The Swiss paper Neuer Zuercher Zeitung has reported that the trader worked at UBS' equities division in London -- and London police have confirmed the suspected trader's name is Kweku Adoboli.
According to a Facebook profile, Adoboli lists UBS as a network, and among "Activities and Interests" lists among many favorites, "Al Jazeera English, Ghana, I'm a Photographer, Not a Terrorist!, Samjhana Moon - Photographer, Wani Olatunde Photography, Brother Mouzone (The Wire), and Vines of Argentina."
Adoboli lists his home as "London, United Kingdom," and has 419 Facebook "Friends."
Adoboli also lists a London pub, "Boundary - Restaurant, Rooms & Suites, Rooftop."
"(This) is a staggering demonstration that all the clever systems that the banks now have, especially after the financial crisis, still cannot stop a determined individual getting round them if they want to," Chris Roebuck, Visiting Professor at Cass Business School in London, told Reuters.
UBS has declined to comment on the trader's identification, but the bank says large trading losses occurred after an employee made massive unauthorized trades.
Meanwhile, UBS stock took a beating for the news in trading on the Zurich Exchange Thurday, as stock shares dropped as much as 10 percent as markets were stunned with the company's admission that a rogue trader cost the company as much as $2 billion and that the bank will likely post a third quarter net loss after the episode.
UBS issued a short confessional of the rogue trading loss before European markets opened, explaining to investors that "UBS has discovered a loss due to unauthorized trading by a trader in its investment bank." UBS employes about 18,000 in its investment bank, and most are based outside of Swizterland, working primarily in London and the U.S.
The bank also sent a letter to employees, attempting to calm shaken nerves about the bank's solvency amid the rogue trading loss.
"Although the news is regrettable, the fundamental strengths of the company won't be affected by this," the note said. "We ask that you continue concentrating on your customers. In these uncertain times they are counting on your support."
UBS says no client positions were affected by unauthorized trading, but the blow will be significant -- and some suggest it could threaten the future of UBS' investment bank, already suffering from reputation blows after massive subprime losses during the financial crisis resulting in government bailout.
Also, UBS suffered an embarrassing U.S. tax evasion case last year that exposed Swiss banking secrecy.