UBS trader charged with $ 2 b fraud

Monday, 19 September 2011 00:00 -     - {{hitsCtrl.values.hits}}

Reuters: UBS trader Kweku Adoboli wept in a London court on Friday as he was charged with fraud and false accounting dating back to 2008, a day after the Swiss bank was plunged into crisis by revealing a $2 billion trading loss.

Wearing a light blue sweater and a white shirt, 31-year-old Adoboli wiped away tears as he was accused of two counts of false accounting, and one count of fraud by abuse of position.

The charges state that while working as a senior trader in UBS Global Synthetic Equities, Adoboli “dishonestly abused that position intending thereby to make a gain for yourself, causing losses to UBS or to expose UBS to risk of loss.”

Adoboli, the son of a retired United Nations employee from Ghana, attended school and university in Britain and joined UBS in 2006 three years after graduating. He spoke only to confirm his name and address and will be held until Sept. 22 when he will appear again in the same court.

“They are extremely serious charges,” said magistrate Carolyn Wagstaff.

Britain’s financial watchdog, the FSA, and its Swiss counterpart FINMA launched a probe into the loss, to be conducted by an independent third party. The Swiss bank would pay for the investigation, the FSA said.

The false accounting charges, said to have taken place between Oct. 2008 and Dec. 2009, and Jan. 2010 and Sept. 2011, said Adoboli had falsified “an exchange traded fund made or acquired for an accounting purpose” and falsified “an exchange traded fund transaction and other internal records”.

Exchange traded funds are securities that track an index, a commodity or a basket of assets, and trade on an exchange.

Adoboli, whose father said his family was heartbroken although he had no doubts about his son’s integrity, later composed himself during the short hearing and managed a few smiles at people sitting in the public gallery.