An alleged trading scheme at UBS AG went undetected for three years before it was finally discovered, triggering a $2 billion loss, U.K. authorities indicated Friday as they charged a 31-year-old trader at the Swiss bank with fraud.

Flanked by a newly hired lawyer from a top London firm, Kweku Adoboli briefly gaped at reporters at his court hearing and said little beyond providing his birth date and address.

Mr. Adoboli, who didn’t enter a plea, dabbed his eyes with a tissue during a roughly 30-minute hearing at the City of London Magistrates’ Court in London’s financial district.

The charges came as an early picture began to emerge of lapses inside one of the world’s largest banks that allegedly allowed a young trader on a small stock desk to cause huge losses over three years, a much longer period than initially suspected.