Former UBS trader jailed for seven years after activities led to $2.3bn loss
Kweku Adoboli, the former UBS trader whose unauthorised trading led to losses of $2.3 billion (€1.79 billion) at the Swiss bank, has been jailed for seven years after being convicted of Britain’s biggest banking fraud.
Judge Brian Keith told Adoboli (32) that his “fall from grace as a result of these convictions is spectacular”. He said Adoboli had a “strong streak of the gambler” and had been “arrogant” enough to think the bank’s rules did not apply to him.
A jury at Southwark Crown Court yesterday returned verdicts of guilty on two counts of fraud by abuse of position, including one count relating to the unauthorised $2.3 billion of losses he racked up at UBS.
They returned not guilty verdicts on four charges of false accounting, which related to fictitious hedging trades and fictitious cash-only trades, which he booked to conceal that risk.
The jury of 10had returned a unanimous verdict on the most serious fraud charge yesterday morning but deliberated for another 90 minutes on the other five charges, after being told by the judge he would accept a majority verdict.
Prosecutors had alleged during the 10-week trial that Adoboli had “fraudulently gambled” away the bank’s money, exceeded his intraday trading limits of $100 million and made unhedged trades by “inventing fictitious deals” to distort his risk position, which then exposed the bank to huge losses.
Adoboli had testified that he began his activities in 2008 to cover a $400,000 trading loss and after that had used fictitious hedging trades to conceal the fact that his real trades were unhedged.
Adoboli’s trades became larger and, by August 8th, 2011, the bank thought the reported risk was $2.3 million but the real risk exposure was $11.85 billion. – Copyright The Financial Times Limited 2012