Former UBS AG trader Kweku Adoboli was found guilty of fraud in relation to a $2.3 billion loss, the largest from unauthorized trading in British history. He was cleared on four counts of false accounting.
Adoboli was convicted today following a two-month-long London trial, during which lawyers for the 32-year-old argued UBS managers pushed traders to take too many risks and rule-breaking at the bank was rampant.
The conviction means Adoboli will be mentioned in the same breath as rogue traders Jerome Kerviel, who was found guilty of causing a 4.9 billion-euro ($6.3 billion) trading loss at Societe Generale SA, and Nick Leeson, the former derivatives trader jailed for losses that brought down Barings Plc in 1995. While UBS warned investment-bank employees to report signs of illicit trading after Kerviel’s loss, Adoboli said he could only reach the bank’s goals set by ignoring such warnings.
“Behind all the technical financial jargon in this case, the question for the jury was whether Kweku Adoboli had acted dishonestly, in causing a loss to the bank of $2.3 billion,” said Andrew Penhale, deputy head of fraud at the Crown Prosecution Service. “The amount of money involved was staggering, impacting hugely on the bank but also on their employees, shareholders and investors. This was not a victimless crime.”
Wearing a navy suit, white shirt and red tie at the hearing today in Southwark Crown Court, Adoboli reacted to the jury’s verdict by nodding his head and looking down. He admitted causing the loss, but said he didn’t do it dishonestly. He pleaded not guilty.
Adoboli’s lawyer, Tim Harris, declined to immediately comment after the verdict was issued.
While the 10-member jury was unanimous in finding Adoboli guilty of one count of fraud early today, jurors didn’t reach unanimous decisions on the other five counts. Judge Brian Keith then agreed to accept 9-1 decisions and jurors returned their verdicts on the other charges.
“To be guilty of false accounting the jury had to be satisfied that he was doing it for personal gain,” said Mark Spragg, a lawyer at Keystone Law. “They could have taken the position that he was reporting up the line to people that did know.”
Keith said he will sentence Adoboli later today. In the U.K., fraud charges carry a maximum sentence of 10 years in jail, while false accounting can bring a seven-year term.