The ex-UBS trader Kweku Adoboli was found guilty of two counts of fraud related to the $2.3 billion loss to UBS AG (NYSE:UBS). It is the largest fraud in British trading history. Mr. Adoboli, a native of Ghana, was sentenced to seven years of jail by Southwark Crown Court in London. He was convicted after a two-month long trial.
Adoboli was originally charged with four counts of false accounting and two counts of fraud. The 32-year old trader had pleaded not guilty on all of the six counts. He said that UBS AG (NYSE:UBS) pushed traders into taking too much risk, and rule-breaking was rampant at the bank. The $2.3 billion loss, due to his inappropriate trading, was the reason UBS chief executive Oswald Grubel was forced to leave the Swiss bank. Today, the prosecution told the court that Adoboli was just one or two moves away from destroying the largest bank in Switzerland.
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Adoboli was arrested on September 15, 2011. He had been working in the synthetic equities division of UBS, where he was involved in buying and selling ETFs. Adoboli, the Ghana-born son of a diplomat, joined UBS AG (NYSE:UBS) in 2006 as a junior trader. Adoboli surprised the court by saying that his senior managers encouraged him to take more risks, and they were aware of his actions.
Though UBS warned its employees to report any signs of illicit trading, Adoboli said a trader could reach the bank’s goals during the financial crisis only by ignoring such warnings. He said he was doing well until the mounting pressure from senior managers forced him to change his perspective from a “bearish” position to an aggressive “bullish” one. Charles Sherrard, the lawyer of Adoboli, requested the judge for leniency in sentencing, as Adoboli was simply trying to make money for the bank.
When sentencing him, Judge Brian Keith told Adoboli, “Your fall from grace as a result of these convictions is spectacular. You are profoundly un-self-conscious of your own failings. You were arrogant enough to think that the bank’s rules for traders didn’t apply to you.”
In an e-mailed statement, UBS AG (NYSE:UBS) thanked the UK authorities and the police for their professional handling of the case, and expressed pleasure that the court proceedings reached a conclusion.