Accused 'Master Fraudster' Goes on Trial for $2.3 Billion UBS Loss

Kweku Adoboli

LONDON -- A senior trader at the Swiss bank UBS was a "master fraudster" who lost his bank $2.3 billion, imperiling its very existence, through risky deals and deceit in a bid to improve his status, bonus and job prospects, prosecutors said Friday.

Prosecution lawyer Sasha Wass told a British jury that Kweku Adoboli lied to his employer, invented clients and breached the bank's safeguards against high-risk trading between 2008 and 2011.

Kweku Adoboli Adoboli was a senior equities trader with the bank in London when he was arrested in September 2011 after UBS discovered irregularities in trading records. The 32-year-old has pleaded not guilty to two counts of fraud and two counts of false accounting.

The fraud wiped $4.5 billion, or 10 percent, off the share price of Switzerland's biggest bank, Wass said.

"Like most gamblers, he believed he had the magic touch," Wass said as she began laying out the case on the first day of the trial. "Like most gamblers, when he lost he caused chaos and disaster to himself and all of those around him."

She said Adoboli, who earned 360,000 pounds ($585,000) in salary and bonuses in 2010, "faked bookings, he created false accounts and conducted himself as a master fraudster, deliberately and systematically deceiving and defrauding the bank which employed him."

"He was risking the very existence of the bank by gambling its resources, ultimately for his own benefit," Wass said.

The $2.3 billion loss hurt the bank's efforts to restore its image after a Swiss government bailout and a tax evasion investigation in the United States.

Wass said on Sept. 14, 2011, Adoboli walked out of his office, saying he had to go to the doctor. Later that day he sent his employers an email admitting his deceit. He was arrested the next day.

Dressed in a gray suit, Adoboli sat on a bench with his lawyers in London's Southwark Crown Court as an overflowing international press contingent filled the glass-enclosed dock where defendants usually sit.

Wass described Adoboli, the son of a Ghana diplomat and the former head boy at an expensive English boarding school, as a reckless gambler who by the summer of 2011 was at risk of losing the bank $12 billion.

"He was putting the very existence of the bank at risk," Wass said.

He was gambling that he would eventually reverse his losses. But, Wass said, in September 2011 "his system crashed like a car hitting a wall at high speed."

Adoboli began working at UBS in its back office, where he became expert in the bank's accounting and control systems. Prosecutors say he later used that knowledge to cover up his fraud. He was promoted to trader in late 2005 and, Wass said, rapidly became "a trusted and admired member of the bank's trading team."

His remuneration rose almost tenfold between 2005 and 2010.

"He was making large profits for the bank - or so they thought," she said.

The case is scheduled to last eight weeks.

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And UBS was just an innocent victim. Right. THEIR greed was part of the problem, and he preyed on it. Anyone who doesn't believe banks should be broken up should think on this.

September 16 2012 at 1:12 AM Report abuse rate up rate down Reply

"I have to go to the doctor" I bet he did...LOLOLOLOLOLOLLLL

September 15 2012 at 9:53 PM Report abuse rate up rate down Reply

Jon Corzine still walks the streets. Thats because he is a bundler for Obama

September 15 2012 at 8:27 PM Report abuse rate up rate down Reply

We are forming our 'opinions' of this guy based upon the one side of the story we are getting. Not even one of us has heard the bank employee's side of the story.

September 15 2012 at 7:12 PM Report abuse -1 rate up rate down Reply

Sounds like he is being groomed for a Cabinet level post in Obama's administration...could be Bernake's new boy.

September 15 2012 at 7:08 PM Report abuse +1 rate up rate down Reply

Of course the FED needs to keep the printing presses going at 150% to pay for the great US war effort. The tax payers suffer financially and the troops suffer by losing their lives or limbs.

But the corporations building arms and pumping oil from the countries the US occupies are the real winners

And now we have Libya who we just liberated at a cost of billions to the US costing us more.

A new study says that US involvement in Afghanistan, Iraq and Pakistan has cost the US $4 trillion over the past decade.

That figure adds $1 trillion to the $3 trillion figure that the US government has calculated to be the cost of America’s anti-terrorism campaigns in those countries.

At least 225,000 people -- including civilians, troops and insurgents -- have died as a result of the conflicts, the study by the nonpartisan Eisenhower Research Project based at Brown University’s Watson Institute for International Studies concluded, adding that of that the total number killed, around 6,000 were uniformed US military personnel.

The US already stricken with deficit, with international bodies warning that if the US keeps on not reducing it, the world can witness yet another financial crisis.

September 15 2012 at 3:57 PM Report abuse -1 rate up rate down Reply

He wll be hired by the US as a fraud investigator.

September 15 2012 at 2:22 PM Report abuse rate up rate down Reply
Skull Blaster

His name should be Kweku AdoboliSTEIN or Kweku AdoboliDiamond or Kweku AdoboliGOLDBERG

September 15 2012 at 12:17 PM Report abuse rate up rate down Reply

fraud, stealing and illegal manipulating in banking, stock market, exchanges and the like(the so called whitecollar crimes) must be revised by our lawmakers. change the laws and implement them and we will change america and the world. perhaps, longer prison terms for those caught red handed dealing and wheeling . perhaps, life imprisonment sentences without parole would be a thing or two to consider. bluewhitemarble.

September 15 2012 at 10:21 AM Report abuse +2 rate up rate down Reply

Anybody from JPM been brought to trial yet or is even being considered for prosecution? I guess it has already been forgotten about the bilions lost there.

September 15 2012 at 1:35 AM Report abuse +2 rate up rate down Reply