And impacted the lives of hundreds, if not thousands, of people.
Gruebel’s decades of experience in finance told him this could only be bad news, he recalled in an interview in October 2012.
'What’s burning ?' he asked Kengeter.
'This time it’s really burning', Kengeter replied.
'Is it more than a billion ?'
Kengeter told Gruebel that a young trader in London named Kweku Adoboli had amassed more than $8bn in unauthorized positions on equity index futures and had hidden them with fake hedges. Adoboli’s wrong-way bets led to a $2.3bn loss in the biggest rogue trading case in U.K. history, according to an article that will appear in the February issue of Bloomberg Markets magazine.
Gruebel, 69, had come out of retirement in February 2009 to rebuild UBS (UBSN) after it had bled more than $50bn in the subprime mortgage crash. He was crestfallen at the blow to the bank’s reputation after Adoboli was arrested on September 15th, 2011. The CEO offered to step down three days later to minimize the damage, and on September 24th, the board accepted his resignation.
During an 11-week trial a year later, Adoboli, 32, argued that he’d never set out to deceive the bank and had simply lost control of his trades. On November 20th, a London jury found him guilty of two counts of fraud and innocent of four counts of false accounting. He was sentenced to seven years in prison.
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