 A 31 year old man has been arrested by City of London Police on suspicion of fraud in connection with the alleged rogue trading incident that has cost Swiss bank UBS around $2bn (£1.3bn). The unauthorized trades could cost UBS almost as much as the 2 billion Swiss francs ($2.28 billion) the bank said last month it hoped to save by cutting 3,500 jobs over two years. In a terse statement shortly before markets opened Thursday, the bank informed investors that "UBS has discovered a loss due to unauthorized trading by a trader in its investment bank." The matter is still being investigated, but UBS's current estimate of the loss on the trades is in the range of $2bn. "It is possible that this could lead UBS to report a loss for the third quarter of 2011." "Although the news is regrettable, the fundamental strengths of the company won't be affected by this," the note said. But he said it was a blow to the reputation of UBS and its management, and reinforced the case of slimming down the investment banking unit.
– A rogue trader at UBS has lost around $2 billion, the Swiss banking giant says. The unauthorized trades by a trader in its investment banking unit "could lead UBS to report a loss for the third quarter of 2011," but "no client positions were affected," the bank said in a statement that offered few other details. Shares in UBS dived almost 10% in early trading after the announcement, which arrived on the third anniversary of Lehman Brothers' declaration of bankruptcy, the Guardian notes. The Wall Street Journal identifies the 31-year-old, who was arrested by British police at 3:30am UK time today, as Kweku Adoboli. He reportedly worked in London, at UBS' trading desk for exchange-traded funds. The AP notes that the unauthorized trades could erase nearly all of the 2 billion Swiss francs ($2.28 billion) UBS last month announced that it hoped to save by doing away with 3,500 jobs over two years.