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.
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