Radio Sandwell News

UBS trader Kweku Adoboli guilty of fraud over £1.4bn loss

2012-11-20 17:28:29

Kweku Adoboli

A City trader who lost £1.4bn ($2.2bn) of Swiss bank UBS's money has been found guilty of two counts of fraud.

Kweku Adoboli, 32, of Whitechapel, east London, denied four charges of false accounting and two of fraud between October 2008 and September 2011.

The prosecution told Southwark Crown Court he was "a gamble or two away from destroying Switzerland's largest bank".

Adoboli, who was cleared of four charges of false accounting, was jailed for seven years.

Adoboli, who was arrested on 15 September 2011, worked in UBS's global synthetic equities division, buying and selling exchange traded funds (ETFs), which track stocks, bonds and commodities.

He had joined the bank as a junior trader in 2006.

The court was told Adoboli lost £1.4bn of the bank's money in "unprotected, unhedged, incautious and reckless" trades.


But Adoboli, the Ghana-born son of a diplomat, told the jury his senior managers were aware of his actions and encouraged him to take risks.

'Magic touch'

He claimed he lost control over his trades during a period of market turbulence last year.

The court heard that at one point he stood to lose the bank £7.5bn ($12bn).

Adoboli was convicted of one count of fraud earlier on Tuesday.

The judge, Mr Justice Keith, gave the jury a majority verdict direction, saying they could deliver a 9-1 verdict on the second fraud charge and the four false accounting charges.

The jury had been reduced to five men and five women after two jurors were discharged.

Adoboli was found guilty by a majority verdict of the second fraud charge but acquitted of the four outstanding false accounting charges.

The prosecution said Adoboli had been a gambler who believed he had the "magic touch".

But, giving evidence, Adoboli said everything he had done was aimed at benefiting the bank, where he viewed his colleagues as "family".

Adoboli said he had "lost control in the maelstrom of the financial crisis", and was doing well until he changed from a conservative "bearish" position to an aggressive "bullish" stance under pressure from senior managers.


Kweku Adoboli Quote

He told the jury that staff were encouraged to take risks until they got "a slap on the back of the wrist".

'Wanted it all'

After the verdicts, Det Ch Insp Perry Stokes, from the City of London Police, which investigated Adoboli, said: "This was the UK's biggest fraud, committed by one of the most sophisticated fraudsters the City of London Police has ever come across.

"To all those around him, Kweku Adoboli appeared to be a man on the make whose career prospects and future earnings were taking off. He worked hard, looked the part and seemingly had an answer for everything.

"But behind this facade lay a trader who was running completely out of control and exposing UBS to huge financial risks on a daily basis.

"Rules put in place to protect the bank's position and the integrity of the markets were being bypassed and broken by a young man who wanted it all and was not willing to wait.

"When Adoboli's pyramid of fictitious trades, exceeded trading limits and non-existent hedging came crashing down, the repercussions were felt in financial centres around the world.

"Now, just a year on, he is facing the reality that he was not above the law and will be made to pay for his crimes. Others who tread a similar path to his can expect the same fate."

Source: bbc.co.uk

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