Former UBS Trader Gets Seven-year Term for ‘UK’s Biggest Fraud’

A former trader at Swiss banking group UBS, Kweku Adoboli, has been sentenced to seven years in prison after being convicted of what UK police describe as the biggest fraud in the country’s history.

Despite his relatively junior position at UBS, Adoboli amassed total losses for the bank of over £1.5bn during three years of secretive, off-the-books trades, which he successfully concealed. At one point, the potential liabilities totalled more than £7bn, a sum described by prosecutors as sufficient to bring down the bank. His actions are among many that have led UBS to exit fixed trading.

Perry Stokes, the City of London police detective chief inspector who led the investigation, described Adoboli as “a young man who wanted it all and was not willing to wait”.

At the trial, the jury heard that Adoboli had joined UBS as a graduate trainee in 2003 and quickly moved from a back office role to the exchange traded futures (ETFs) desk, where he began his illicit deals in late 2008. Initially these proved highly profitable and the proceeds were lodged in a secret account he called his umbrella and drip fed back on to the regular books. However, when European markets experienced volatility in the summer of 2011, the trades began to accrue losses, which Adoboli attempted to recoup with ever-bigger punts. The resulting anomalies came to the attention of UBS’s accountants, and in September 2011 he confessed and, in an email, apologised and accepted “full responsibility for my actions and the shit storm that will now ensue”.

However, the judge commented at the trial that Adoboli seemed “profoundly unselfconscious” of his failings, and should have realised he was being dishonest. He told him: “There is the strong streak of the gambler in you, borne out by your personal trading. You were arrogant enough to think that the bank’s rules for traders did not apply to you.”

UBS said in a statement: “We are glad that the criminal proceedings have reached a conclusion and thank the police and the UK authorities for their professional handling of this case. We have no further comment.”

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