Thursday, 20 June 2013
Judge Throws Book at Ghanaian Funds Trader for ‘Near Destruction of Bank’
A Southwark Crown Court judge has ordered 32 year old Ghanaian funds trader Kweku Adoboli to serve a sentence of 7 years behind bars for a rash of unauthorized trades that blew up and cost his employer, the Swiss bank UBS, over $2 billion.
Adoboli was convicted and sentenced this week for what was called the biggest fraud in British history. A senior trader on the Exchange Traded Funds (ETFs) desk at UBS’s investment banking arm in London, Adoboli admitted trading way over his authorized risk limits. He then made fictitious book entries to hide his true positions.
As the foreman of the jury gave the first verdict on the main count of fraud, Mr. Adoboli bowed his head. He was then taken into custody and returned later to hear the five other verdicts. He was not given an opportunity to leave the dock to embrace his father, John, who had travelled to Britain from Ghana to support his son throughout the lengthy trial, and was seated directly behind the dock.
Adoboli will have to serve half the sentence before being released on probation. After taking into account the time already spent in custody, he could be out of prison in about two and a half years.
During the trial, the prosecution portrayed him as a reckless gambler who played God with UBS’s money, driven by a desire to be a star trader with a huge bonus to match.
His defense 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 Sept. 15, 2011.
The jury returned a unanimous verdict of guilty on the main fraud count, holding him directly responsible for the $2.3-billion loss. It related to his unhedged, multibillion-dollar trades in the summer of 2011.
He was acquitted on four counts of false accounting related to the fake entries he admitted making into UBS’s computer systems to hide his true positions, for which the jury needed to be certain that he had acted for personal financial gain.
Mr. Adoboli had always disputed the prosecution argument that he was driven by a desire for a bigger bonus.
Several top UBS executives including former Chief Executive Oswald Gruebel, resigned, were sacked, or sidelined following the scandal, but the bank and its managers strongly denied encouraging traders to break the rules.
The bank has since slashed the size of its investment banking business, though the ETFs desk has survived.