UBS trader Kweku Adoboli may be deported

12 October, 2015

 Kweku Adoboli was released from prison in June

Kweku Adoboli was released from prison in June

Kweku Adoboli, a former UBS Group AG trader who caused a $2.3 billion loss through unauthorized trading, will fight a U.K. immigration tribunal’s decision to deport him to Ghana.
Adoboli, who was sentenced to seven years in prison in Nov. 2012, will lodge an appeal against the ruling handed down last week, his lawyer, Paul Lennon of London-based Bark & Co. said by e-mail. Ghana-born Adoboli was released from prison in June.
Adoboli was convicted of two counts of fraud for causing the loss at UBS’s London unit. He argued at trial that managers at Zurich-based UBS pushed him to take too many risks and that rule-breaking at the bank was rampant. While he admitted causing the loss, he said it wasn’t done dishonestly.
Though Adoboli has lived in England for 23 years, he doesn’t hold British citizenship.

[December 09 2012 UBS trader Kweku Adoboli’s boss claims racial discrimination]
Ronald Greenidge, the former UBS AG (UBSN) managing director fired for gross misconduct in his supervision of convicted trader Kweku Adoboli has sued the bank claiming it treated him more harshly than others because he’s black.
Greenidge, who was UBS’s head of European cash trading, alleges race discrimination and unfair dismissal. “There are stark discrepancies” between UBS’s treatment of Greenidge and other people connected to Kweku Adoboli, according to the complaint. Greenidge “is of black Caribbean origin. Mr. Adoboli is of black African origin. The claimant believes he has been treated less favorably than his” white counterparts.
Adoboli, originally from Ghana, was sentenced to seven years in prison on Nov. 20 for fraud tied to a $2.3 billion loss, the largest from unauthorized trading in U.K. history

Chief executive Sergio Ermotti has moved to shut down most of UBS’s fixed income business, cut 10,000 jobs, and instead squeeze more juice from its wealth operations. Elsewhere Dexia is in exclusive talks over the sale of its asset management unit to private equity firm GCS Capital, Credit Suisse has reportedly put its $17bn exchange traded fund arm on the market, while Deutsche tried and rather miserably failed to offload large chunks of its asset management operations.

[January 30]
Alleged rogue trader Kweku Adoboli has pleaded not guilty to two charges of false accounting and two of fraud while working for Swiss bank UBS.
[October 5 2011]UBS AG (UBSN), Switzerland’s biggest bank, said Francois Gouws and Yassine Bouhara resigned as co-heads of global equities following the $2.3 billion unauthorized trading loss detected last month.

[Sept. 24]Oswald Gruebel, chief executive officer of UBS AG (UBSN) since February 2009, resigned his post at Switzerland’s largest bank after a $2.3 billion loss from unauthorized trading.

He will be replaced on an interim basis by Sergio P. Ermotti, the bank’s CEO for Europe, the Middle East and Africa, UBS said

UBS’s Americas investment-banking division will spend part of the week golfing at California resort Pebble Beach with the company’s top clients

Now 2.3 bn: UBS trader Kweku Adoboli had no hedges in place , breaching the risk limits, then entered “fictitious” hedges. The UBS statement claimed Mr Adoboli had conducted legitimate derivative transactions, giving the bank heavy exposure to various stock market indexes. But he had then entered “fictitious” hedges against these positions into UBS’ risk management system, while in reality he had no hedge in place and was breaching the risk limits that the bank required him to work within.

UBS, for example, is offering managing directors base pay as high as 300,000 pounds ($470,000), double the amount of last May. [February 2010]
“How are you going to explain to your shareholders and employees that you’ve lost this amount from the acts of a single young employee in a trading room?”
City experts questioned how many other rogue trader cases never get exposed. Onno Steenbeck of Erasmus University in Rotterdam, a co-author of a paper on Leeson’s strategy, said: “Leeson believed in doubling up, like a naive gambler. He sometimes got lucky and got out of the misery but nobody knows how many Nick Leesons there are who got lucky and we never found out about.”
One current hedge fund trader, who declined to be named, added: “Of course there are bound to be people on the other side [of the UBS losses] who made miraculously large sums of money that weren’t authorised. They will be kept quiet. You won’t hear about it.”

His desk specialized in ETFs. But the alleged scheme centered not on the trading of those relatively plain-vanilla securities but on the hedging of risk, people familiar with the matter said. The false accounting charges, said to have taken place between October 2008 and December 2009, and January 2010 and September 2011, said UBS trader Kweku Adoboli had falsified “an exchange traded fund made or acquired for an accounting purpose” and falsified “an exchange traded fund transaction and other internal records.” UBS believes that the losses were accumulated in a large number of small trades over many months, not in one big deal.

As the City tough guy Paul Myners reportedly said, we never hear about the unauthorised rogue profits that arise from casino-style speculations – only about the rogue losses that are adding to market instability at a really unhelpful time.
Whether UBS is shown to have been aware of Adoboli’s trading is almost beside the point. If the bank was aware of it and did not stop it, then its failure to do so is unconscionable. If it was not aware of the trades, then its compliance and risk management departments’ failure to prevent them from happening in the first place is equally appalling.
In the post-Lehman, Dodd-Frank, Basel-III era, it is nearly unfathomable that a global bank of UBS’s heft, wealth and importance could allow this kind of loss to occur. Where were the adults?
>>>If it was possible there, where else?

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