'An investment banker has been jailed for seven years after being convicted of recklessly and illegally gambling away more than $2 billion through fraudulent trading.
Kweku Adoboli, 32, from Bethnal Green, was found guilty of two counts of fraud by abuse of position at Southwark Crown Court. He was found not guilty of four counts of false accounting.
In response to the court’s verdict and sentencing, DCI Perry Stokes, from the City of London Police, 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.’
The court heard how the former-UBS trader, working from the firm’s Exchange Traded Fund Desk, took massive risks on the financial markets in an attempt to secure greater financial rewards and promotion.
On the surface he appeared to be on a steep upward trajectory, with his salary and bonus rocketing from £65,000 to £350,000 between 2008 and 2010.
But unbeknown to his managers he was exposing the bank to huge financial risks by exceeding trading limits, inventing fictitious trades and clients and not hedging his bets.
He managed to hide his huge losses and cover his tracks by drawing on his experiences of working in the UBS back office.
Adoboli’s ‘naked trading’ began to completely unravel in the summer of 2011 when he misjudged how the markets would react to the Eurozone crisis.
By this time serious questions were beginning to be asked about his trading position, and in an increasingly desperate attempt to recover ballooning losses the trader was taking bigger and bigger risks on the markets.
On 14 September Adoboli knew the game was up. He left the UBS offices at lunchtime and sent an email to his managers trying to explain how the bank was now exposed to unprecedented financial losses.
In the early hours of the following morning UBS called the City of London Police, which is the National Lead Force for fraud, to their city offices and at 3.35am detectives arrested Adoboli and took him to a City police station.
The force then conducted an intensive criminal investigation, drawing on specialist expertise within its Economic Crime Directorate and working in close collaboration with CPS and with the support of UBS to bring this complex case to court.
DCI Stokes continued: ‘To all those around him Kweku Adoboli appeared to be a man on the make whose career prospects and future earnings were taking off. He worked hard, looked the part and seemingly had an answer for everything.
‘But behind this façade lay a trader who was running completely out of control and exposing UBS to huge financial risks on a daily basis. Rules put in place to protect the bank’s position and the integrity of the markets were being bypassed and broken by a young man who wanted it all and was not willing to wait.
‘When Adoboli’s pyramid of fictitious trades, exceeded trading limits and non-existent hedging came crashing down the repercussions were felt in financial centres around the world.
‘Now, just a year on he is facing the reality that he was not above the law and is now paying for his crimes after being jailed for seven years. Others who tread a similar path to his can expect to also face justice'.
Commander Steve Head added: 'That Adoboli has gone from high flier to convicted criminal in such a short passage of time is testament to the expertise of our officers in the Economic Crime Directorate, our partnership with the CPS and the co-operation of UBS.
‘The bank called us very late one night and we were there within the hour and had Adoboli before a court in 48 hours. The City of London Police act quickly and decisively in these situations and I would urge any other financial institutions who suspect they have been the victim of a fraud to contact us immediately''.
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