Kweku Adoboli, a former UBS AG (USA) (NYSE:UBS) trader, confessed via an email that he was, indeed, guilty of cooking the accounting books while he was employed by UBS. According to Reuters, he is currently on trial in a case for allegedly falsifying books, and commiting fraud.
Adoboli, who is 32, sat in court as the prosecution, led by Sasha Wass, read an email, which was sent by Adoboli to a colleague on September 14 of last year. This was the day that UBS AG (USA) (NYSE:UBS) management learned of his fraudulent activities, and realized that he was performing unauthorized trades. The email reads:
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“It is with great stress that I write this mail. First of all the ETF (Exchange Traded Funds) that you see on the ledger are not trades that I have done with a counterparty as I previously described. I used the bookings as a way to suppress the PnL losses that I have accrued through off book trades that I made.”
This confession of sorts, may be enough to convict the man of exactly what the prosecutors are charging him with. It’s clear from the email that he was indeed making trades, which his superiors were unaware of. It’s equally clear that he admittedly lied about what trades he was making, by writing false entries in his ledger. He admits that he used the books to try to hide losses which had occurred due to the trades he was making under the table.
This case leaves investors wondering just how much of this type of activity goes on with their money. We have already seen several major cases involving criminal activity in the last few years. One of the more notable and recent cases involved former New Jersey governor, John Corzine, who was at the helm of MF Global Holdings Ltd (PINK:MFGLQ) when $1.6 billion of customer money was “lost”. The company still claims no knowledge of where the funds went, nor how they were used. Corzine also maintains innocence, althoug he is keeping a very low profile, and is staying far from the political limelight of president Obama’s bid for re-election this year. The former governor was a major contributor and fundraise for Obama in 2008.