2 billion worth of oops

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Pigeon
Posts: 18055
Joined: Thu Mar 31, 2011 3:00 pm

2 billion worth of oops

Post by Pigeon » Thu Sep 15, 2011 12:55 pm

It's only a couple of quarters worth of profit. Tough breaks. haha.

UBS discovers $2 billion loss in unauthorized trade

(CNN) -- Swiss banking giant UBS discovered that unauthorized trading has cost it an estimated $2 billion, it announced Thursday.

The "unauthorized trading by a trader in its investment bank" could cause the bank to record a loss in the third quarter of this year, it said.

A loss of $2 billion would be "completely unheard of," market analyst Ralph Silva told CNN.

"We have only had three or four other situations... in the billions, and that is exactly what happened," he said.

Silva outlined three possible ways a loss that big could take place: intentional fraud, "basic stupidity" in trading strategy, or what the banking industry calls "fat fingers," which means typing the wrong number by accident.
UBS suffers loss from unauthorized trade
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Perhaps the trader "put in an extra zero so instead of buying a million he or she bought ten million -- could be a problem," Silva said.

UBS said no client positions were affected by the loss, which is still being investigated.

It declined to tell CNN where the trading occurred.

Police in London arrested a man in the early hours of Thursday morning on suspicion of fraud.

They revealed the arrest of the 31-year-old man in the City of London, the British capital's banking district, shortly after the UBS announcement, but declined to confirm whether it was linked to the Swiss bank's loss.

The man remains in police custody, they said, declining to name him.

UBS declined to comment on the arrest.

The loss would potentially be among the largest costs ever to a bank in unauthorized trading.

Rogue trader Jerome Kerviel cost his French bank, Societe Generale, almost $6 billion, and was sentenced to three years in prison last year.

Nick Leeson, the subject of the Ewan McGregor movie "Rogue Trader," lost about $1.3 billion for his bank, Barings, in 1995, forcing it to close.

UBS made a pre-tax profit of about $1.9 billion in the second quarter of this year, it announced in July, down from about $2.5 billion the quarter before that.

UBS shares were down about 8.5% about five hours after the $2 billion loss was announced.


User avatar
Royal
Posts: 10562
Joined: Mon Apr 11, 2011 5:55 pm

Re: 2 billion worth of oops

Post by Royal » Thu Sep 15, 2011 1:19 pm

ahahahah "Fat Fingers".

I'm sure they have controls for that kind of thing.

Maybe computer screen prompts:

You have entered $4,000,000,000. Are you sure this is the right amount?

Press Enter



$4,000,000,000. That's 4 billion. It's a whole lot-a-dough. Are you sure this is the right amount?

Press Enter

Now entering Fat Pockets secured network. May take minutes to load.

Press Enter


User avatar
Pigeon
Posts: 18055
Joined: Thu Mar 31, 2011 3:00 pm

Re: 2 billion worth of oops

Post by Pigeon » Thu Sep 15, 2011 1:46 pm

You appear to be making a 'special' trade transaction <wink>

Enter you offshore bank account >
Enter you cut % or $ amount >
Enter ID of trader to accept blame for this transaction >


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