Adoboli guilty of fraud, cleared of false accounting by jury

Bombshell E-Mail

On Sept. 14, 2011, following inquiries about his trading by a UBS accountant, Adoboli left his office, went home and sent a “bombshell e-mail” describing unauthorized trades he’d made on German and U.S. futures.

“I am deeply sorry to have left this mess for everyone and to have put my bank and my colleagues at risk,” Adoboli wrote in the message to the accountant, copying two of his managers.

He was called back to the UBS office near London’s Liverpool Street train station that afternoon to answer questions and arrested early the next day. Ruwan Weerasekera, a UBS investment-bank executive, testified Oct. 9 that losses from Adoboli’s trades could have reached $12 billion.

Faking Hedge

Adoboli, who worked for UBS since leaving college, was accused of hiding the risk of his trades by booking fake hedges and storing profits in a secret account to cover the costs of running the bank’s exchange-traded-funds desk. Jurors cleared him of the charges related to the so-called umbrella account.

During the trial, prosecutor Sasha Wass called Adoboli arrogant, reckless and an “accomplished liar” who “played God” with the bank’s money for the sake of his status, ego and bonus. Lawyers for Adoboli countered that he didn’t benefit personally from the trades and his only goal was to make money for the bank and trading desk that he said replaced his family.

“In the end, the reason I’m most sad is because these losses weren’t the result of dishonest or fraudulent behavior,” Adoboli said. “These losses were the result of a group of traders who were asked to do too much, with too little resources, in a market that was too volatile.”

Adoboli told jurors he worked as many as 16 hours-a-day and twice slept under his desk as he struggled to make the $40 million profit necessary to cover the ETF desk’s costs.

Adoboli, who worked for UBS since leaving college, was accused of hiding the risk of his trades by booking fake hedges and storing profits in a secret account to cover the costs of running the bank’s exchange-traded-funds desk.

Bloomberg News

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