Ex-UBS trader gets seven-year jail term for US$2.3b fraud
Reuters in 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 US$2.3 billion loss for the Swiss bank.
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 his authorised risk limits and making fictitious book entries to hide his true positions.
The judge said Adoboli had to serve half the sentence before being released on probation and, after taking into account the time already spent in custody, would be out of prison in about 2-1/2 years.
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.
His defence was that the bank had turned a blind eye to rule-bending as long as profits rolled in. He also said others knew what he was doing and did not disapprove. Adoboli pleaded not guilty to two charges of fraud by abuse of position covering the period from October 2008 to his arrest on September 15 last year.
The jury returned a unanimous verdict of guilty on the main fraud count, holding him directly responsible for the US$2.3 billion loss. It related to his unhedged, multibillion-dollar trades in the summer of 2011.
During the 10-week trial, the court heard that his risk exposure - the amount the investor has at risk - peaked at US$12 billion on August 8, 2011, while his desk's authorised risk limit was US$100 million for intra-day trading and US$50 million for overnight.
The jury found him guilty on the other count of fraud, which related to unhedged, unauthorised trading in the period from October 2008 to May 2011.
Adoboli was acquitted on four counts of false accounting related to the fake entries he admitted making into UBS's computer systems, for which the jury needed to be certain he had acted for personal financial gain.
"The amount of money involved was staggering, impacting hugely on the bank but also on employees, shareholders and investors. This was not a victimless crime," said Andrew Penhale, from the Crown Prosecution Service, after the verdict.