The trader arrested on suspicion of a staggering £1.3billion fraud at UBS is believed to have blown the whistle on himself about the unauthorised deals.

UBS's internal controls were unaware of the the huge losses allegedly generated by 'rogue trader' Kweku Adoboli, 31, who allegedly confessed to bosses about the huge losses.

UBS are then believed to examined his trading positions and called City regulator the Financial Services Authority (FSA) and the police, according to the BBC.

After his arrest at his desk in the early hours of Thursday, Adobli has hired City experts Kingsley Napley, the law firm which advised Nick Leeson, the man who brought down Baring's Bank in the 1990s, according to Sky News.

The revelations is set to add to fears about the risks taken by investment banks and heighten calls for greater regulation in the banking industry.

Adobli's last Facebook message, which was believed to have been left on Tuesday, September 6, read: ‘Need a miracle.’

He is then believed to have confessed to his bosses at Swiss banking giant UBS the extent of the losses he had racked up, as it is understood the bank were not aware of the suspected fraud.

The Ghanaian, who was privately educated in Britain and is the son of a retired UN worker, is accused of being responsible for the biggest loss ever accrued by a single trader based in London.

The £1.3billion figure easily dwarfs the £827million lost by rogue trader Nick Leeson, who served more than three years in a Singapore prison for forging documents and deceiving the bank's auditors.

It equates to about the same amount UBS is seeking to save by cutting 3,500 jobs worldwide.

Speculation was mounting that he may have been caught out after the Swiss Central Bank unexpectedly devalued the franc last week, producing mammoth losses on one of his currency trades.

Oswald Gruebel, UBS chief executive, has called the loss 'distressing' and said he 'will spare no effort to establish how it happened'.

Adoboli’s boss John Hughes is reported to have quit his job in the aftermath of the scandal. Sources said he would have faced serious questions about supervision of staff. He could not be reached for comment last night.

Following the incident, credit ratings agency Moody's said it would place UBS's rating under review focusing on 'ongoing weakness' in the Swiss bank's risk management.

UBS, which has three keys in its logo symbolising 'confidence, security and discretion', has said no client funds were affected by the incident.

City of London Police commander Ian Dyson said the force was tipped off by UBS at 1am on Thursday morning.

Within three hours, detectives had entered the HQ of UBS and had also arrested Adoboli, who according to sources was a ‘work-hard, play-hard’ trader who enjoyed the company of a series of attractive women at his flat in Whitechapel, East London.

Kweku Adoboli wasn't the first and I'm sure he won't be the last to get caught. What worries me is how prevalent this practice of rogue tradng is and how easy it is to ruin a bank. Nick Leeson buried Barings Bank in 1999 and this lad nearly ruined the UBS in Switzerland.

Here is a list of ten infamous rogue traders through the years:

http://listverse.com/2008/03/24/top-10-rogue-traders/

I find it a little unnerving in a world where diligence and caution is rammed down the throat of the general public that competence is cast to the wind where it is needed the most - dealing with the public's money!

What makes this even worse is the world's governments seem to be a slave to the banking institution so their answer to such loss of the public's money would be to bail out the banks using more of the public's money...where is the accountability?

The chief executive of Swiss bank UBS, Oswald Gruebel, has resigned over an alleged £1.5bn ($2.3bn) rogue-trading loss, the company says.

The chief executive of Swiss bank UBS, Oswald Gruebel, has resigned over an alleged £1.5bn ($2.3bn) rogue-trading loss, the company says.


Good.

Rogue trader my butt.

Back in the 1980's I worked for a firm that owned an aluminum subsidiary.  The business model was they they melted extremely high-purity aluminum for sale on the open market, and then bought cheaper stuff to make extrusions for things like window frames and whatnot.

Anyway, they ended up on the losing end of a $52 million bet and tried to claim that it was all due to a "rogue trader" and that the business was never engaged in such speculation.  When... in fact... such trading and hedging was part and parcel of the business.

I suspect that the only part of this "rogue" trader's activity was losing money.

I suspect that the only part of this "rogue" trader's activity was losing money.


When you win, you're a genius.  When you lose, you're a rogue.  Pay your money, take your chances!

Not to defend the indefensible, but at least the guy in the UK owned up to it, and everyone who crosses the line knows they do so at the risk of their own careers.  They may be doing so with the shareholders' money, but at least they're taking their chances.