UBS announced the loss from unauthorized trading equated to approximately $2.3 billion, more than was initially reported, according to Bloomberg Businessweek.
Initially, UBS claimed that actions by a trader led to a $2 billion loss, which the company said could mean a loss for the company during the quarter. Although shares of the company plummeted by more than 10 percent on Thursday, shares rebounded approximately 4 percent the next day.
The trader, 31-year old Kweku Adoboli, was arrested by London Police Thursday on suspicion of fraud by abuse of position. Authorities are currently investigating how long the "rogue" trading has been taking place, and are also looking into whether other traders were involved.
Early reports from UBS said that in order to hide previous trading losses, Adoboli booked ficticious trades appearing to hedge his positions, Forbes reports.
Although Adoboli is the primary target of investigations, some experts point out that the trading failure is part of a larger problem. It has been reported that UBS's internal controls, which were strengthened at the commencement of the financial crisis, did not pick up on the massive loss allegedly caused by Adoboli.
"This is a controls failure," Francois Chaulet of Montsegur Finance in Paris told Bloomberg. "How are you going to explain to your shareholders and employees that you've lost this amount from acts of a single young employee in a trading room?"
While the company has begun a formal investigation into the matter, the CEO of UBS, Oswald Gruebel, has resisted calls for his resignation.
In a memo obtained by Bloomberg, Gruebel told employees that he was "shocked and disappointed" by the trading behavior.
"I and the rest of the firm's management are fully focused on thoroughly investigating the issue, and will do all it takes to determine how this happened and what we need to do to ensure that it does not recur," Gruebel wrote. "Ultimately, the buck stops with me."