Thursday's Headlines: UBS rogue trader blamed for $2 billion loss

A rogue trader at UBS has caused $2 billion of losses at the Swiss bank, news media are reporting today. A 31-year-old European equities trader, Kweku Adoboli, has been arrested in London in connection with the case, DealBook says.

"The incident raises questions about the bank's management and risk policies at time when it is trying to rebuild its operations and bolster its flagging client base," Dealbook writes. "The case could also bolster the efforts of regulators who have pushing in some countries to separate trading from private banking and other less risky businesses."

The Financial Times notes that this could be the third-largest rogue trading loss after similar incidents at Societe Generale in 2008 and Sumitomo Corporation in 1996.

Other News:

SEC expands scrutiny of crisis-era mortgage deals; wants $200 settlement from Citigroup. [Wall Street Journal]

US regulators investigating how home lenders valued $845 million of home-equity loans. [Bloomberg]

Goldman Sachs replaces head of quantitative investment strategies as hedge fund falters. [Reuters]

Eurozone banks to borrow US dollars from ECB to improve liquidity. [Bloomberg]

US says Bank of America improperly fired whistle-blower; orders $930,000 compensation. [Biz Journals]

Citi Private Bank nabs Daniel Batista from JP Morgan Chase to manage ultra high net worth clients. [On Wall Street]

China's Citic Securities share sale attracts Temasek Holdings, Kuwait Investment Authority. [Bloomberg]