LONDON -- Swiss banking giant UBS said Thursday a rogue trader has caused it an estimated loss of $2 billion, stunning a beleaguered banking industry that has proven vulnerable to unauthorized trades.
Police in London said they arrested 31-year-old UBS trader Kweku Adoboli in the alleged fraud. UBS declined to confirm his name.
Switzerland's largest bank warned that it could report a loss for the entire third quarter as a result of the rogue trade.
Swiss banking regulator Finma said it was in contact with UBS about the incident, which was discovered late Wednesday.
"From the scale of this case you can be sure that it's the biggest we've ever seen for a Swiss bank," said Finma spokesman Tobias Lux. UBS provided few specifics, saying no client money was involved.
U.S. stocks jump on support for Europe's financial system
NEW YORK -- A joint effort by five major central banks to support Europe's financial system set off a rally in U.S. stocks Thursday. Gold plunged $45 to settle at $1,781 an ounce and Treasury yields rose as traders sold the safest investments. Markets in Europe soared.
Morgan Stanley chairman John Mack to step down
NEW YORK --John Mack will step down as Morgan Stanley's chairman and leave the bank's board at the end of 2011.
The widely expected move brings an end to a storied Wall Street career. Mack, a North Carolina native, was CEO of Morgan Stanley from 2005 to 2009. CEO James Gorman will take over the chairman's role.
Mack is largely credited with saving the investment bank during the financial crisis by negotiating a $9 billion investment from the Japanese bank Mitsubishi UFJ Financial Group. However, he was criticized for the firm's poor performance during and after the crisis before handing over the CEO spot to Gorman in 2010.
Subaru recalling some 2011 sedans, crossovers
WASHINGTON -- Subaru is recalling 69,590 of its 2011 Legacy sedans and Outback crossovers because their sunroof glass could come loose and fall out.
The National Highway Transportation Safety Administration said the vehicles were made between Aug. 3, 2010, and July 1.
The NHTSA said on its website that the adhesive between the sunroof's glass and retainer wasn't adequately applied.
Dealers will inspect the adhesion and either apply extra adhesive or replace the glass for free. The recall is expected to begin next month.
Otis will announce today new plant in Florence
FLORENCE -- Otis Elevator is scheduled to formally announce the opening of a new plant in Florence that will bring 360 jobs. The announcement planned for today has been expected for months.
Florence County Council in July approved tax breaks for the company in an agreement that calls for Otis to spend $40 million, with average hourly wages of $25.
Florence Sen. Hugh Leatherman said this month that state economic development officials met with Otis' parent in June.