The London branch of Swiss bank UBS is reeling following the discovery of an alleged rogue trader that has cost it 1.44 billion euros.
Photos have been released of 31-year-old Kweku Adoboli, who has been arrested. He was formerly director of exchange-traded funds. UBS shares fell nearly 10 percent on the news.
He is the latest rogue trader to be accused of making a mockery of bank security systems. Nick Leeson famously brought down Britain’s oldest investment bank Barings in 1995, and in France Jerome Kerviel lost nearly five billion euros for Societe Generale in 2008.
“This is mainly a confidence issue now of course. Back in 2008 all of these banks across the world, people lost confidence in them, the governments had to bail them out. Now, when we’re just starting to think that maybe some of these banks are getting a foothold back, maybe regaining that confidence, which they’ve had to work very hard to get back, something like this happens,” said analyst James Hughes.
At a stroke Adoboli’s alleged fraud has wiped out the sum UBS was planning to save by slashing 3500 jobs in this year’s cost-cutting programme.
Analysts are saying this may cost the boss of UBS’s already-underperforming investment banking arm his job.