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kweku adoboli
Convicted former UBS trader Kweku Adoboli has been formally banned from working in the financial services industry.
Kweku Adoboli, 35, was jailed for seven years in 2012 for fraud.
UK’s Financial Conduct Authority (FCA) said it had banned Kweku Adoboli, who was released from jail earlier this year.
His actions resulted in losses of £1.4 billion ($2.2 billion) for the Swiss bank, the FCA said.
UBS was fined £29.7 million ($47.5) for systems and control failures related to the unauthorized trading losses.
Kweku Adoboli said the ban marked the end of a difficult chapter in his life.
“I fully recognize the reasons for my prohibition and thank the FCA for their restraint. My hope now is to move forward in a positive way to help others learn from the mistakes I’ve made,” he said.
Kweku Adoboli’s lawyer said he wanted to repay his debt to society by using his own experience to explain how risk management controls might be avoided.
The rogue trader was arrested in September 2011 and was held in custody for nine months until his trial.
After serving almost half of his sentence for two counts of fraud, Kweku Adoboli was released from jail in June 2015.
During his trial at Southwark Crown Court, Kweku Adoboli told the jury that UBS staff were encouraged to take risks until they got “a slap on the back of the wrist” by senior managers.
Tracey McDermott of the FCA’s predecessor, the Financial Services Authority, said in 2012 that the bank’s faulty controls had allowed Kweku Adoboli’s losses to mount to what was the largest trading loss in the UK.
“UBS’s systems and controls were seriously defective,” she said.
“As a result, Adoboli, a relatively junior trader, was allowed to take vast and risky market positions, and UBS failed to manage the risks around that properly.”
He is facing deportation to his native Ghana after an immigration tribunal this week ruled that he should be removed from the UK.
According to the UK’s law, foreign nationals who have been sentenced to more than a year in jail should be considered for deportation.
Kweku Adoboli, the son of a UN diplomat who was educated at a Yorkshire boarding school, said he would appeal against the “heartbreaking” decision.
The Financial Services Authority (FSA) has fined UBS $47.6 million for failings that led to trader Kweku Adoboli losing $2.2 billion.
The fine, the third largest imposed by the FSA, was for “system and control failings” that allowed Kweku Adoboli to trade in London well beyond authorized limits.
Kweku Adoboli was last week convicted of two counts of fraud and sentenced to seven years in prison.
UBS said it was “pleased that the chapter has been concluded”.
The FSA, which conducted the investigation into failings at the bank with its Swiss counterpart, Finma, said there were serious weaknesses at the Swiss bank.
It said in a statement: “UBS failed to take reasonable care to organize and control its affairs responsibly and effectively, with adequate risk management systems, and failed to conduct its business from the London Branch with due skill, care and diligence.”
The FSA’s director of enforcement and financial crime, Tracey McDermott, said faulty controls had allowed the losses to mount to what was the largest trading loss in the country.
“UBS’s systems and controls were seriously defective,” she said.
“As a result, Adoboli, a relatively junior trader, was allowed to take vast and risky market positions, and UBS failed to manage the risks around that properly.”
Kweku Adoboli, the 32-year-old Ghana-born son of a diplomat, joined UBS in 2003, becoming a trader in 2006.
He worked in UBS’s global synthetic equities division (GSE), buying and selling exchange traded funds (ETFs), which track stocks, bonds and commodities.
He was arrested in September last year.
The Financial Services Authority has fined UBS $47.6 million for failings that led to trader Kweku Adoboli losing $2.2 billion
Southwark Crown Court was told that he was “a gamble or two away from destroying Switzerland’s largest bank”.
The judge said there was “a strong streak of the gambler” in him.
But, during evidence, Kweku Adoboli said everything he had done was aimed at benefiting the bank, where he viewed his colleagues as “family”.
He said he had “lost control in the maelstrom of the financial crisis”, but had been doing well until he changed from a conservative “bearish” position to an aggressive “bullish” stance under pressure from senior managers.
Kweku Adoboli told the jury that staff were encouraged to take risks until they got “a slap on the back of the wrist”.
The fine was set at 15% of the revenue of the division where Kweku Adoboli worked and takes account of the revenue generated by the business area where the weak controls occurred.
UBS said it had made a number of substantial changes since discovering the losses, including fixing the weakness in its financial reporting.
The bank added it was retraining staff on the importance of risk management and had changed the way it evaluated and compensated employees.
UBS is changing its own structure to make itself a simpler organization.
The bank’s chief executive, Oswald Gruebel, left the company in the aftermath of the scandal.
His successor, Sergio Ermotti, announced a major restructuring last month to run down the large, risky parts of the investment banking division.
UBS said it had fully co-operated with the regulators’ investigations and that it accepted their findings and the penalties incurred.
UBS’s fine was discounted from the original level of $65 million for early settlement.
Switzerland’s financial regulator Finma said in a statement that it would also check whether UBS had adequate capital backing for its operational risks.
Finma said it had identified “serious deficiencies in risk management controls” and that it would appoint a third party to make sure proper measures were introduced.
UBS has been banned by regulators from making new acquisitions and it also needs to get prior approval from Finma for any new business initiatives.
Kweku Adoboli, the City trader who lost $2.2 billion of Swiss bank UBS’s money, has been found guilty of two counts of fraud.
Kweku Adoboli, 32, of Whitechapel, east London, denied four charges of false accounting and two of fraud between October 2008 and September 2011.
The prosecution told Southwark Crown Court he was “a gamble or two away from destroying Switzerland’s largest bank”.
Kweku Adoboli, who was cleared of four charges of false accounting, was jailed for seven years.
Kweku Adoboli, who was arrested on 15 September 2011, worked in UBS’s global synthetic equities division, buying and selling exchange traded funds (ETFs), which track stocks, bonds and commodities.
He had joined the bank as a junior trader in 2006.
The court was told KwekuAdoboli lost $2.2 billion of the bank’s money in “unprotected, unhedged, incautious and reckless” trades.
But Kweku Adoboli, the Ghana-born son of a diplomat, told the jury his senior managers were aware of his actions and encouraged him to take risks.
He claimed he lost control over his trades during a period of market turbulence last year.
The court heard that at one point he stood to lose the bank $12 billion.
Kweku Adoboli was convicted of one count of fraud earlier on Tuesday.
The judge, Justice Keith, gave the jury a majority verdict direction, saying they could deliver a 9-1 verdict on the second fraud charge and the four false accounting charges.
Kweku Adoboli, the City trader who lost $2.2 billion of Swiss bank UBS’s money, has been found guilty of two counts of fraud
The jury had been reduced to five men and five women after two jurors were discharged.
Kweku Adoboli was found guilty by a majority verdict of the second fraud charge but acquitted of the four outstanding false accounting charges.
The prosecution said Kweku Adoboli had been a gambler who believed he had the “magic touch”.
But, giving evidence, Kweku Adoboli said everything he had done was aimed at benefiting the bank, where he viewed his colleagues as “family”.
Kweku Adoboli said he had “lost control in the maelstrom of the financial crisis”, and was doing well until he changed from a conservative “bearish” position to an aggressive “bullish” stance under pressure from senior managers.
He told the jury that staff was encouraged to take risks until they got “a slap on the back of the wrist”.
After the verdicts, Detective Chief Inspector Perry Stokes, from the City of London Police, which investigated Kweku Adoboli, said: “This was the UK’s biggest fraud, committed by one of the most sophisticated fraudsters the City of London Police has ever come across.
“To all those around him, Kweku Adoboli appeared to be a man on the make whose career prospects and future earnings were taking off. He worked hard, looked the part and seemingly had an answer for everything.
“But behind this facade lay a trader who was running completely out of control and exposing UBS to huge financial risks on a daily basis.
“Rules put in place to protect the bank’s position and the integrity of the markets were being bypassed and broken by a young man who wanted it all and was not willing to wait.
“When Adoboli’s pyramid of fictitious trades, exceeded trading limits and non-existent hedging came crashing down, the repercussions were felt in financial centres around the world.
“Now, just a year on, he is facing the reality that he was not above the law and will be made to pay for his crimes. Others who tread a similar path to his can expect the same fate.”
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