UBS rogue trader gets 7 years' jail
London , November 20, 2012
UBS rogue trader Kweku Adoboli was given a seven-year jail sentence on Tuesday after being convicted of two counts of fraud resulting in the Swiss bank's losing $2.3 billion.
He will serve half his sentence minus a year already spent in custody - a total of 2-1/2 years.
Adoboli was earlier acquitted at Southwark Crown Court of four related charges of false accounting.
Ghanaian-born Adoboli, 32, was a senior trader on the Exchange Traded Funds desk at UBS's investment banking arm in London and had worked for the bank for eight years.
He had pleaded not guilty to two charges of fraud by abuse of position and four charges of false accounting, covering the period from October 2008 to his arrest on Sept. 15, 2011.
The jury returned a unanimous verdict of guilty on count six of the indictment, which held him directly responsible for the $2.3 billion loss. It related to his unhedged, multi-billion-dollar trades in the summer of 2011.
During the 10-week trial, the court heard that his risk exposure had peaked at $12 billion on August 8, 2011, while his desk's authorised risk limit was $100 million intra-day and $50 million overnight.
Adoboli's defence against that charge was that the bank had been pushing traders to take greater risks in pursuit of greater profits, that risk limits were not enforced, and that the multi-billion-dollar trades occurred at a time when he was suffering from burnout and had "lost control" of his trading.
Standing in the glass dock at the back of the courtroom at Southwark Crown Court, Adoboli bowed his head when the foreman of the jury gave the verdict on count six.
Adoboli revealed the losses to his managers in an email on September 14, 2011, and was arrested the following day. His trial started a year later.
A swathe of top UBS executives including former chief executive Oswald Gruebel, have resigned, been 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 ETF desk has survived. - Reuters