Britain’s biggest rogue trader gets 7 years for £1.4bn bank fraud
A CITY trader who gambled away £1.4 billion in the UK’s biggest banking fraud was yesterday jailed for seven years in a “spectacular” fall from grace.
Kweku Adoboli brought Swiss bank UBS to its knees by exceeding his trading limits and failing to mitigate the risk of reckless deals.
At one point the 32-year-old was on the verge of causing losses of $12bn (£7.5bn), and the hole he eventually left was the largest trading loss ever in British banking history.
Yesterday, jurors at Southwark Crown Court found him guilty of two counts of fraud, but cleared him of four counts of false accounting.
Sentencing, Mr Justice Keith told him: “Whatever the verdict of the jury, you would forever have been known as the man responsible for the largest trading loss in British banking history.”
Former public schoolboy Adoboli wiped away tears as he sat in the dock, following his nine-week trial.
He admitted the enormous losses but claimed that he was pressured by staff to take risks, culminating in a catastrophe that wiped £2.8bn off the bank’s share value.
Mr Justice Keith said: “The tragedy for you is that you had everything going for you.
“Your father was in a responsible position, which enabled you to be educated at a private school. I’m not saying you came from a privileged background, but you had some advantages others did not and you had your natural talents.
“You are highly intelligent. You are plainly very articulate. And as I told the jury, you appear to have a considerable amount of charm. Your fall from grace as a result of these convictions is spectacular.
“There is a strong streak of the gambler in you. You were arrogant to think the bank’s rules for traders did not apply to you.”
He added that there were no other realistic verdicts open to the jury on the fraud charges apart from guilty.
But the judge was sceptical that his acquittal on the four charges of false accounting meant he was innocent, only that the jury had doubts over whether he planned to gain financially himself. He told the disgraced trader they “remain part of the picture of what your fraudulent trading involved”.
Adoboli received seven years for a charge of fraud by abuse of position relating to the £1.4 billion loss, and four years for a second count of the same offence, to run concurrently.
He will serve half the term before being released on licence – 349 days will be taken off that period for the amount of time he has already spent behind bars or with an electronic tag.
Speaking outside court, Andrew Penhale, deputy head of fraud at the Crown Prosecution Service (CPS), said: “Behind all the technical financial jargon in this case, the question for the jury was whether Kweku Adoboli had acted dishonestly, in causing a loss to the bank of $2.3bn (£1.4bn).
“He did so by breaking the rules, covering up and lying. His actions amounted to fraud, pure and simple.
“The amount of money involved was staggering, impacting hugely on the bank but also on their employees, shareholders and investors. This was not a victimless crime.”
UBS came under investigation by the Financial Services Authority and the Swiss Financial Market Supervisory Authority after the massive losses were revealed.
The bank said in a statement yesterday: “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.”
Prosecutors claimed Adoboli – heavily involved in spread-betting in his spare time – was a gambler who believed he had the “magic touch”. But, giving evidence, he said staff were encouraged to take risks until they got “a slap on the back of the wrist”.
Charles Sherrard QC, for Adoboli, said the trader “gave his life to UBS” and had been “sorry from day one” for what happened. “Most significantly, he has not been found to be driven by greed, ego, reputation or any sinister motive,” Mr Sherrard said.
Detective Chief Inspector Perry Stokes, from City of London Police, which investigated Adoboli, said: “This was the UK’s biggest fraud committed by one of the most sophisticated fraudsters the City of London Police has ever come across.”
Search for a job
Search for a car
Search for a house
Weather for Edinburgh
Thursday 23 May 2013
Temperature: 5 C to 10 C
Wind Speed: 25 mph
Wind direction: North west
Temperature: 3 C to 13 C
Wind Speed: 20 mph
Wind direction: North east