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Ghanian Kweku Adoboli, UBS trader charged with fraud, jailed for 7 years

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Ghanian Kweku Adoboli, UBS trader charged with £1 billion fraud, jailed for 7 years... cue the "never let an African near money jokes...?" :confused:

Kweku Adoboli was found guilty of two fraud charges by majority jury

Star trader, 32, 'was a gamble away from destroying bank', court hears

Clear him of four further false accounting charges but jailed for 7 years

Considered one of the UBS's 'rising stars' before losses were revealed

One of the most sophisticated banking frauds ever uncovered


At one point during his run of losses, rising star City trader Kweku Adoboli, 32, stood to run up losses of $12 billion (£7.5 billion) for UBS. Detective Chief Inspector Perry Stokes, who led the probe into what Adoboli had done, said the he was one of the most sophisticated fraudsters he had come across. Ghanaian-born Adoboli exceeded his multimillion-pound trading limits and failed to hedge trades, allegedly faking records to cover his tracks at the Swiss bank's London office.

He admitted the losses but claimed he was pressured by staff to take risks, culminating in bad deals which wiped £2.8 billion off the bank's share value when they were discovered. The jury at Southwark Crown Court, in London, convicted him of one count of fraud linked to the £1.4 billion loss. Adoboli was later found guilty by a majority verdict of a second fraud charge but acquitted of the four other outstanding false accounting charges between October 2008 and September last year.

Trial judge Mr Justice Keith gave the jury a majority verdict direction this morning, saying they could deliver a 9-1 verdict on the remaining five charges.


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Guest Chelsea Jack

he'll be out before then and you know he's sent mad p home anyway so he's laughing


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He'll probably be well 'compensated' when his out for keeping quiet as he can't have been the only do doing this.

His main defence was based on his statements that this behaviour was not only accepted but encouraged by his bosses and was widespread.

and he partly won.

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so he didnt even keep part of that 1.4bn?


Chuss meh.

A naija woulda mopped and split calm.

  • Downvote 1

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just says he lost the money when he got excited while trading

they havent said anything about unexplained amounts of money disssappearing

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You couldn't make this up.

Banks arsef*ck the several major economies through greed and crooked trading.

No one from a major banks gets jailed

Except the black guy?

  • Upvote 5

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I attended the trial for the first two week, and got to speak with the Man in Question. A very decent guy who go into banking the hard way of settlements then working his way up. His desk was earning around £15,000,000 per year when he started and over a the next quarter he earn £16,000,000 then the next quarter £45,000,000 for the desk of six traders with increased loss limits of £100,000,00

.All his desk were aware of of his "Umbrella Account" likewise some people in the Back Office and in several echolens of management. NO compliants were made during this massive up trend in profits.

In the 2nd Qtr of 2011, he decided to be bearish the S&P indice, and loaded up on his position. He believed that the market was not acting right and it was due for a major correction. Over the next few weeks the market edge slightly higher each day, which meant all his desk colleagues and Manager were taking the micky out of his "Bearish" stance, he insisted that the market was due for a correction, but his amigos were all ribbing him and making Cartoons of Adoboli the Bear. Another factor was that his desk manager was more of a scalper than a swing trader and was constantly making loses for the desk, through Adoboli's style of trading and the "umbrella" account it allowed the whole desk to mask their general losses.

Near the end of July he finally gave in to "peer" group pressure and switched his position to Long. Taking the relatively smaller loss on the short side. After that the rest as they say is History. The twin events of Obama care rebellion and the USA downgrade pushed the market to it's lowest lows in one week.

Colleagues agree that he was very active and well studied in the and with the Market to an obessive degree. After discussing his position with with Desk they decided that he should take the rap for the loss, obviously they would not have asked him to take the credit at bonus time had he of stuck to his original decision. He "owned up " as the futures contracts would have had to of been rolled over and that sort of size could not he sweeped under the carpet.

The pressures occured when in 2008 UBS lossed $50 Billion in the sub prime debacle and it was realised that the only department that could possible make it up was through the Sales traders or the Proprietary Traders. The Sales Traders were fleecing thier clients to such a large degree UBS were losing them. This meant the pressure was on the Prop desks to recover the money, hence increased limit sizes and a more embracing attitude to risk.

As Mr Hughes, the ex UBS head of ETF trading desk Adoboli's supervisor mentioned the training consisted of 6 months on the job and a multiple choice test about Derivatives. After that bingo Size for your Eyes.

My own personal views is while he did do some ficticious trades, he did so in an environment that encourged it, I have yet to hear of a Court case of a "Rogue" Trader that make the Bank $ 1 Billion.

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got excited and lost alot of money, then did ficticious trades to cover it up or something

or the whole department was making them trades but they singled him out to take the blame cause he lost the most

i dunno

i still wanna know if he's gonna have some of that P hidden somewhere when he comes out

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his seniors new about what he was doing

probably encouraged him... yeah yeah yeah, go on kewku, you're doing really good there, make sure you leverage that s&p over the nexr 3 months mate... yeah yeah..."

propa speering him on...

next fing u no the managers are like na na na no idea wot gwan here... eh kewku... u say u did it, we'll give me 10,000,000 pay off



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In the simplest terms possible, because this is a reasonably complex scam:

Adoboli held stock A and believed the price of stock A was due to rise.

Part of UBS's risk control system (designed with the sole intention to limit downside risk i.e. large trading losses) was to require all trades to be hedged to some degree.

Hedging a trade involves taking the opposite position in stock B that you took in stock A. Therefore, if stock A falls when you predicted a rise, the majority of your losses will be recouped by your short position in stock B.

The first part of Adoboli's fraud was to bypass these risk control measures to such an extent that he created fictitious positions in stock B. In other worse, he was running naked positions and was completely unhedged but was reporting to his superiors that his large loss making positions were completely hedged (often siphoning funds from his umbrella account to credit the shortfall).

The second part was to falsify his daily Profit & Loss statements. All trading desks no matter how large or small will report P&L on a daily basis (at least). As a trader you are ultimately responsible for your own P&L and its accurate reporting. Adoboli used his experience in trade support and settlement to create fictional (but believable) daily P&L prints, thus enabling him to run his loss making positions under the radar in the hope that they would come good. Normally such positions would be flagged on market close and automatically closed out but because the status of these positions was being falsified, there was no traffic light that ordered trading to stop.

The final part of the scam was to create an umbrella account, into which trades that could not be legitimately booked due to their dubious accountancy and risky nature were booked. These traders were winners, they made money. But they could not be reported because doing so would alert Adoboli's colleagues to his questionable trading methodologies. The umbrella account was certainly used by some of Adoboli's colleagues though, but it is wrong to say that he was the scapegoat. He created the account, used the account far more than anyone else and ultimately ran the account into the ground. Imagine if I robbed a bank for a million, gave you a grand on a night out and then when I eventually got caught I tried to finger you as my accomplice simply because you took a grand from me on a night out without asking any questions. This is basically the extent of involvement that Adoboli;s colleagues had.

The reason Adoboli got caught was because he got it wrong and he got unlucky. He got it wrong because he placed the wrong bet, he got unlucky because UBS were tightening their risk control measures in line with a wider risk off sentiment throughout the bank and Adoboli's positions got flagged.

Anyway Adoboli got it wrong because he called the market wrong. He bought when he should have sold, and bought more when he should have gone flat. He betted, he didn't trade. Despite the aforementioned article lauding Adoboli as some sort of maverick trader, he was just a gambler who dug himself into a deeper hole as he tried to recover his losses. He was no scapegoat. To call him such would be to discredit the hard work and moderate level of intelligence that it took to run such a scam for almost 3 years at a bank that was constantly tightening its risk.

And for those who said he is calm and will take it on the chin, he was crying like a little girl in the dock about how he "did it all for the bank he loved" whilst at the same time trying to finger as many of his colleagues as possible.

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