Sponsored by: Investment Center

Something new in your business?  Click here to submit your business press release

Chamber Corner | Main Street News | Job Hunt | Classifieds | Calendar | Illinois Lottery 

British regulator bans former UBS trader over Adoboli losses

Send a link to a friend  Share

[May 02, 2014]  By Kirstin Ridley and Clare Hutchison

LONDON (Reuters)  Britain's financial regulator has banned a former senior UBS trader for failing to adequately supervise his junior colleague Kweku Adoboli, the "rogue trader" jailed in 2012 for running up $2.3 billion in unauthorized trading losses.

Announcing its first ban from regulated financial jobs for such a failure, the Financial Conduct Authority (FCA) said on Thursday John Hughes had been aware of Adoboli's actions but had failed to challenge, report him or act as a role model with "catastrophic consequences".

"Instead he ... allowed the desk's profit and loss to be misstated over an extended period," FCA enforcement and financial crime division head Tracey McDermott said.

"This failure contributed to Adoboli's unauthorized trading continuing unchecked. Approved people should operate to the highest standards of integrity."

Between January and September 2011, Hughes was the most senior person on UBS's Exchange Traded Funds desk at the London branch of UBS  a period during which Adoboli ran up such hefty trading losses that they that risked undermining the Swiss bank.

Adoboli was sentenced to seven years in jail in November 2012 after being found guilty of two counts of fraud by abuse of position.

Hughes  who was dismissed for gross misconduct weeks after Adoboli's arrest  wept in court in October 2012 after reading an email in which his former colleague admitted to the trades.

Part of the unauthorized trading involved creating and using a secret fund, dubbed the "Umbrella", which had the effect of manipulating the desk's reported profit and loss.

[to top of second column]

The FCA said Hughes knew about the existence of the Umbrella, how it was being used, did not consider it to be honest and knew UBS would not have authorized its use.

"Hughes' conduct in relation to the Umbrella was dishonest and demonstrates that he is not a fit and proper person to perform functions in relation to any regulated activity carried on by an authorized or exempt person," the FCA said.

(Editing by Louise Ireland)

[ 2014 Thomson Reuters. All rights reserved.]

Copyright 2014 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

< Recent articles

Back to top