UBS discovers $2 billion loss in rogue trade

CNN News, by the CNN Wire Staff, September 15, 2011

UBS said the loss may mean it will report a loss in the third quarter.

STORY HIGHLIGHTS

• UBS says no client positions are affected by the loss
• The unauthorized trading could mean the bank reports a loss this quarter
• It would be among the largest losses in rogue trading

(CNN) -- Swiss banking giant UBS discovered that rogue 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.

The loss would potentially be among the largest costs ever to a bank in rogue trading. Rogue trader Jerome Kerviel cost his bank, Societe Generale, almost $6 billion, and was sentenced to three years in prison last year.

RELATED TOPICS

• UBS AG

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

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.

CNN's Alex Mohacs and James Partington contributed to this report.

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