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Adoboli jailed for $2.3bn UBS fraud

Estelle Shirbon London

Former UBS trader Kweku Adoboli was convicted and sentenced to seven years in jail yesterday for the biggest fraud in British history, which resulted in a loss of $2.3 billion (R20.3bn)for the Swiss bank.

Former UBS trader Kweko Adoboli arrives at Southwark Crown Court in London, November 20, 2012. The jury in the London trial of former UBS trader Kweku Adoboli, who is blamed for a loss of $2.3 billion, continues to consider its verdicts. REUTERS/Stefan Wermuth (BRITAIN - Tags: BUSINESS CRIME LAW). Credit: REUTERS

Ghanaian-born Adoboli, 32, a senior trader on the Exchange Traded Funds (ETFs) desk at UBS’s investment banking arm in London, admitted trading far in excess of authorised risk limits and making fictitious book entries to hide his true positions.

He cried in the dock as his lawyer Charles Sherrard asked for the judge’s clemency, describing him as a sensitive, committed, hard-working young man who had already paid a very high price for what he had done.

“The tragedy for you is that you had everything going for you,” the judge, Brian Keith, told Adoboli. “There is a strong streak of the gambler in you… You were arrogant enough to think that the bank’s rules for traders didn’t apply to you.”

Adoboli, who composed himself for the judge's remarks, was then taken away by police. He will serve half the sentence before being released on probation, and after taking into account the time already spent in custody could be out of prison in about two and a half years.

The prosecution had portrayed him as a reckless gambler who played God with UBS’s money in the belief that he had the magic touch, driven by a desire to be a star trader with a huge bonus to match.

His defence was that the bank had turned a blind eye to rule-bending as long as profits rolled in and that others knew what he was doing and did not disapprove.

He had pleaded not guilty to two charges of fraud by abuse of position covering the period from October 2008 to his arrest on September 15, 2011.

The jury returned a unanimous verdict of guilty on the main fraud count, holding him directly responsible for the $2.3bn loss. It related to his unhedged, multi-billion-dollar trades in the summer of 2011.

During the 10-week trial, the court heard that his risk exposure had peaked at $12 billion on August 8 2011, while his desk’s authorised risk limit was $100m intra-day and $50m overnight. – Reuters

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