Rogue Trader Told Bank of Error

    LONDON, ENGLAND - SEPTEMBER 15:  The sign for the UK headquarters of the Swiss banking group UBS after it was announced that unauthorised trades by an investment banker had cost the bank 1.3 billion GBP on September 15, 2011 in London, England. Police have arrested at 31 year old man in connection with the rogue trading whilst shares in UBS have fallen sharply on the news.  (Photo by Oli Scarff/Getty Images)

    Oli Scarff / Getty Images

    It seems UBS operates on the honor system. Kweku Adoboli, the trader who allegedly lost $2 billion in unauthorized trading, told the bank about the error himself, according to the BBC. UBS' internal controls didn't detect the massive loss. After Adoboli came forward, UBS examined his trading positions and informed the police. He was then arrested. The Financial Services Authority is investigating why UBS failed to identify the unauthorized trades. Moody's says it is reviewing UBS' rating. The bank's shares closed down 11 percent yesterday.

    Read it at BBC