Trader jailed for UK’s biggest fraud racked up £1.4bn losses

Kweku Adoboli brought Swiss bank UBS to its knees by exceeding his trading limits and failing 
to mitigate the risk of reckless deals.

At one point the 32-year-old was on the verge of causing losses of £7.5bn, and the hole he eventually left was the largest trading loss ever in British banking history.

Jurors at Southwark Crown Court found him guilty of two counts of fraud yesterday, but cleared him of four counts of false accounting.

Sentencing, Mr Justice Keith told him: “Whatever the verdict of the jury you would forever have been known as the man responsible for the largest trading loss in British banking history.”

Adoboli, a pupil at Ackworth School, near Pontefract, until 1998, wiped away tears as he sat in the dock, following his nine-week trial.

He admitted the enormous losses but claimed he was pressured by staff to take risks, culminating in a catastrophe that wiped £2.8bn off the bank’s share value.

Mr Justice Keith said: “The tragedy for you is that you had everything going for you.

“Your father was in a responsible position which enabled you to be educated at a private school. I’m not saying you came from a privileged background, but you had some advantages others did not and you had your natural talents.

“You are highly intelligent. You are plainly very articulate. And, as I told the jury, you appear to have a considerable amount of charm. Your fall from grace as a result of these convictions is spectacular.

“There is a strong streak of the gambler in you. You were arrogant to think the bank’s rules for traders did not apply to you.”

He added there were no other realistic verdicts open to the jury on the fraud charges apart from guilty but he was sceptical that his acquittal on the four charges of false accounting meant he was innocent, only that the jury had doubts over whether he planned to gain financially himself.

Adoboli received seven years for a charge of fraud by abuse of position relating to the £1.4bn loss, and four years for a second count of the same offence, to run concurrently.

He will serve half the term before being released on licence – 349 days will be taken off that period to count for the amount of time he has already spent behind bars or on an electronic tag.

Prosecutors had claimed Adoboli – who was heavily involved in spread-betting in his spare time – was a gambler who believed he had the “magic touch”.

He had joined UBS as a graduate trainee in 2003 and, at the time of the fraud, worked for its global synthetic equities division, buying and selling exchange traded funds (ETFs), which track different types of stocks, bonds or commodities such as metals.

UBS came under joint investigation by the Financial Services Authority and the Swiss Financial Market Supervisory Authority after the massive losses were revealed.

Giving evidence, Adoboli said staff were encouraged to take risks until they got “a slap on the back of the wrist”.

He had broken down in the dock, telling of gruelling hours, which had seen him miss his grandmother’s funeral, and the pressure upon him and colleague John Hughes, 25.

“Our book was massive,” Adoboli said. “A tiny mistake led to huge losses. We were these two kids trying to make it work.”

Charles Sherrard QC, for Adoboli, said the trader “gave his life to UBS” and had been “sorry from day one” for what had happened.

“Most significantly, he has not been found to be driven by greed, ego, reputation or any sinister motive.”