UBS discovers unauthorised trading, loss estimated at $2 bn
Swiss banking giant UBS revealed on Thursday an estimated loss of $2.0 billion after the discovery of unauthorised trading at its investment bank.
Shares in the bank plunged on the announcement which was issued two minutes before trading began, plummeting 7.04 percent to 10.16 francs.
"UBS has discovered a loss due to unauthorised trading by a trader in its Investment Bank," the bank said in a statement.
"The matter is still being investigated, but UBS's current estimate of the loss on the trades is in the range of $2 billion."
The bank added that it may also be forced to report a loss for the third quarter due to the unauthorised trade.
It assured clients however that their positions were not affected.
When contacted, the bank would not give further details.
In 2008, French bank Societe Generale uncovered rogue trading by one of its former employees Jerome Kerviel, whose unauthorised trades lost the bank 4.9 billion euros ($7.1 billion at that time).
Kerviel was later sentenced to five years in jail with two years suspended, and ordered to pay back the 4.9 billion euros, although the French bank said it would spare the trader from reimbursing the full compensation.
© 2011 AFP