UBS trader faces added fraud charge
Kweku Adoboli, the UBS trader charged with fraud and false accounting that may have resulted in a $2.3-billion loss, said through his lawyer that he was “sorry beyond words” after facing an additional fraud charge at a court hearing Thursday.
Adoboli, who holds a Ghanaian passport, didn’t apply for bail when he appeared at a magistrates court in London. Prosecutor David Levy said the alleged loss could exceed $2.3 billion. Adoboli wasn’t required to enter a plea, and another hearing was scheduled for Oct. 20.
The trader is “sorry beyond words for what happened here,” said Patrick Gibbs, Adoboli’s lawyer. He apologized for his “disastrous miscalculations,” Gibbs said.
Adoboli, 31, has been in police custody since he was arrested Sept. 15 on suspicion of making the unauthorized trades.
Prosecutors charged him Sept. 17 with fraud and false accounting dating to 2008. The prosecution Thursday added a charge to extend the fraud allegations to 2008 as well.
Adoboli “dishonestly abused” his position as a senior trader on the Swiss banking giant’s global synthetic-equity desk “to make a gain” for himself and “to expose UBS to a risk of loss,” prosecutors said in court papers. He was “expected to safeguard, and not to act against, the financial interest of UBS,” they said.
Adoboli worked for UBS’ investment bank on its Delta One desk, which handles trades for clients, typically helping them speculate on or hedge the performance of a basket of securities. The group also trades using the bank’s own money. UBS has said that no client positions were affected.
The UBS loss came from trading in Standard & Poor’s 500, DAX and EuroStoxx index futures over the last three months, according to the bank. The risk of the trades was masked by fictitious positions, UBS said.
The British Financial Services Authority and the Swiss Financial Market Supervisory Authority last week opened a joint investigation into control failures at UBS that allowed the trades to go undetected. The joint regulatory probe will be conducted at the same time as investigations by police, prosecutors and an internal review by Zurich-based UBS.
