A Swiss bank known for fiercely protecting the privacy of its super-rich account holders, apparently took its eye off the ball as a 31-year-old banker lost $2 billion in a bungled trade.
A Swiss bank known for fiercely protecting the privacy of its super-rich account holders, apparently took its eye off the ball as a 31-year-old banker lost $2 billion in a bungled trade.
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This is a major event for the UBS bank, which will eat the loss linked to gross oversight by senior management of its trading operations.
The young, high-flying trader was 31-year-old Kweku Adoboli, a U.K. citizen of Ghanaian descent. Adoboli was reportedly under financial pressures, which may have pushed him to seek a profit-making trade without getting the needed green lights.
Analysts uniformly agree that UBS has plenty of capital and liquidity to absorb the trading loss.
Adoboli’s family was reportedly heartbroken over the arrest of Kweku. John Adoboli, a retired United Nations employee from Ghana, said he knew the financial sector was a high-risk area, but he had no doubts about his son's competence and integrity.
"From what the reports are saying, it could be that he made a mistake or wrongful judgment," Adoboli told Reuters, saying he had to speak to Kweku before drawing any conclusions.
"We are all here reading all the materials and all the things being said about him. The family is heartbroken because fraud is not our way of life," he said.
"I brought them up to be God-fearing and to appreciate decency. Growing up and through to school days they were very brilliant and respectful," Adoboli said by phone from the Ghanaian port city of Tema.
John said he had spoken with Kweku's girlfriend in London, who confirmed his arrest earlier on Thursday.
"I've been calling his phone since and I am hoping he'd be granted bail soon so I can hear his side of the story."
At UBS, bank officials have refused to comment while the case is under investigation, reiterating that no client funds were involved.
The incident has been compared to the case of Jerome Kerviel, an employee of the French bank Societe General who quietly gambled away $6.6 billion. Kerviel was convicted in October 2010 and charged with forgery, breach of trust and unauthorized computer use. He was sentenced to five years in jail with two years suspended and ordered to pay restitution, which is considered unlikely.
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Adoboli was described as well dressed and quiet but “was not the tidiest” according to his former landlord Philip Octave who described an expensive loft in Shoreditch, a few blocks from the UBS UK headquarters. He moved from this upscale area four and a half months ago the former landlord confirmed.
Adoboyi attended the Quaker academy in West Yorkshire, the Ackworth School and was part of the alumni network between 1992 and 1998. He was featured on Sky TV News report about the Freshers Week and was also the coordinator.
A graduate of computer science, with honors from the University of Nottingham he worked as a communications officer from 2000 to 2001 for the same University.
Meanwhile, UBS has been fighting to restore its reputation after losing colossal sums in US subprime loans in 2007-2008 and the ensuing global economic crisis.
The bank had to be bailed out by the state, while clients exited en masse amid fears that it would go under.
In 2008 and 2009, the bank was also embroiled in a serious tax evasion spat with the United States.
It was forced to hand over 300 client names and pay a $US780 million fine in a first case, before a second wider case in which it finally agreed to hand over data on 4,450 American clients.
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