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$2 Billion Fraud At UBS Leads To London Man’s Arrest

$2 billion fraud at UBS leads to London man's arrest on Thursday.

$2 billion fraud at UBS leads to London man's arrest on Thursday.

It was announced on Thursday with great surprise that UBS, a Swiss global financial services company which has its headquarters in Basel Zurich, Switzerland, has lost in the region of $2 billion because of unauthorized deals it has said were placed by a single trader. Kweku Adobli was arrested in London, but the news has stunned so many in the financial world.

According to reports, UBS took on Maureen Miskovic, based in Zurich, as the chief risk officer at UBS at the beginning of 2011, someone with a good reputation who has shaken up the risk management at the bank, so it comes as even more of a shock that a rogue trader has been acting, supposedly alone, and has been able to use $2 billion in unauthorized deals.

With investor confidence already shaky after years of crises, it is not a good sign that UBS has had to warn investors that they might be posting a loss in the third quarter because of this unauthorized trading in its investment bank. The bulk of the investment banking operations by UBS is carried out in London and New York, with Britain employing 6,000 people out of about 65,000 employed around the world in all the major financial centers, and they have offices in over 50 countries.

London police arrested Mr. Adobli on Thursday on suspicion of fraud. He is 31 and studied computer science at Nottingham University. Reports are coming in that he was well regarded by his colleagues who are shocked to learn of his arrest.

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