Rogue trader jailed for UK's biggest fraud warns it could happen again

[August 01, 2016]  By Estelle Shirbon

LONDON (Reuters) - Kweku Adoboli, the rogue trader jailed in 2012 for the biggest fraud in British history, has said his crimes could be repeated because bankers still faced the same pressure to make profits "no matter what".

A star trader on the Exchange Traded Funds desk at UBS's London office, Adoboli lost the Swiss bank $2.3 billion after trading far in excess of his authorized risk limits and booking fictitious hedging trades to hide his true exposure.

He was given a seven-year jail term in November 2012 and was released from prison last year. He has been banned from working in financial services but speaks about his experiences for free at banking compliance conferences.

"I think it could absolutely happen again," he said in interviews with the BBC broadcast on Monday.

"The young people I've spoken to, former colleagues I have spoken to, are still struggling with the same issues, the same conflicts, the same pressures to achieve no matter what."

During his trial, Adoboli said everything he did was to make profits for UBS and was in line with the bank's culture, but prosecutors said he told elaborate lies to cover up his reckless and fraudulent trading. After 11 weeks of evidence, a jury convicted him of two counts of fraud.

UBS was fined 30 million pounds ($40 million) for systems and control failures and the trial was embarrassing for the bank, but the jury rejected Adoboli's argument that he had been tacitly authorized to break the rules to make profits.

"I accept I was found guilty of a crime that had dishonesty central to it," said Adoboli, now 36.

However, he argued that the banking industry had failed to learn from when things went wrong because it had a tendency to try and blame individuals rather than face up to profound cultural problems and hold senior managers accountable.

"Culture is being set at very senior levels of the industry and those responsible for setting that culture are as responsible for what the outcomes are as those who push the buttons at the coalface," he said.

DEPORTATION

Adoboli, who does not have British citizenship, is fighting deportation to his native Ghana and is not allowed to work in Britain.

Supporters have launched a crowd-funding appeal on the FundRazr website to help him fund his legal battle to stay in Britain. They have raised 14,446 pounds so far.

"I'm trying to achieve something positive from the experience that I've been through but I face deportation from the UK in a way that would mean that I'm not able to continue doing this work of sharing the story," he said.
 

Former UBS trader Kweko Adoboli arrives at Southwark Crown Court in London, November 20, 2012. REUTERS/Stefan Wermuth

"I unreservedly apologize for what happened ... I went to prison for it," Adoboli said.

The son of a United Nations official, Adoboli spent part of his childhood in the Middle East before arriving in Britain aged 12 and attending a private Quaker boarding school where he did so well he was chosen to be "head boy".

Confident, articulate and hard-working, he initially thrived at UBS and was selected for the bank's "Ascent" program for future leaders.

But from 2008 onwards, he started using illicit trading methods, culminating in a concealed risk exposure of $12 billion in August 2011. His desk's authorized risk limit was $100 million during a day's trading.

He argued at the trial that he had become de-sensitized to the enormity of the numbers due to burnout.

After losing control of the situation, he threw in the towel in September 2011, owning up in an email to the bank that he had hidden short positions in Eurostoxx and DAX index futures that turned out to be worth a staggering $8.75 billion.

After UBS frantically unwound the positions, the scandal had cost it $2.3 billion and a drop in its share price of more than 10 percent on the day of Adoboli's arrest.

($1 = 0.7592 pounds)

(Additional reporting by Michael Holden; editing by Giles Elgood)

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