'Rogue trader' weeps as he is charged with €1.4bn fraud
Published 17/09/2011 | 05:00
Kweku Adoboli, the banker accused of the City of London's biggest fraud, allegedly began rogue-trading three years ago and may not have been acting alone.
The 31 year old broke down in tears yesterday when he appeared in court charged with false accounting and fraud dating back as far as October 2008.
Police were still unsure whether they had uncovered the full extent of the alleged £1.3bn (€1.4bn) fraud, and were investigating whether other people at the Swiss investment bank UBS may have been involved.
Despite the length of time over which Mr Adoboli is alleged to have been carrying out unauthorised trades, UBS remained oblivious to its losses, according to sources.
The company's strict monitoring procedures, which were designed to detect improper conduct, failed to discover what was going on, raising the possibility that the bank's losses could have been even higher.
UBS, which has been scrambling to limit the damage to its reputation following the discovery of the loss, was facing an even bigger crisis in investor confidence after the disclosure that its systems had failed to detect Mr Adoboli's alleged fraud.
Mr Adoboli started his UBS career as a trainee in the back office in 2002 and he had detailed knowledge of its administration procedures.
Sources close to UBS disclosed that Mr Adoboli was alleged to have accrued the record loss by carrying out a large number of transactions over the course of the three-year period, rather than through a single deal that went wrong.
One insider alleged that he had failed to take out "hedges" against his trades -- a form of insurance to mitigate against losses -- which left the bank massively exposed.
Mr Adoboli, who was born in Ghana and educated at a British boarding school, was arrested in the early hours of Thursday after UBS contacted the police.
He was charged yesterday afternoon and appeared before City of London magistrates, where he did not enter any pleas and spoke only to confirm his name, address and date of birth.
He was described on the charge sheet as a senior trader in global synthetic equities, a position in which he was "expected to safeguard, or not act against, the financial interests of UBS bank".
Wearing an open-necked white shirt and blue V-necked jumper, Mr Adoboli began to cry during the 15-minute hearing and was handed a tissue by the clerk of the court to wipe his eyes.
He was remanded in custody to appear again before the same court on September 22, and mouthed "thank you" to the magistrate, then nodded to two friends in the public gallery as he was led from the dock. No application was made for bail. (© Daily Telegraph, London)