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Thread: This is one degenerate dude

  1. #1
    Gold rickastley's Avatar
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    This is one degenerate dude

    http://www.bbc.co.uk/news/uk-20338042



    A City trader who lost £1.4bn ($2.2bn) of Swiss bank UBS's money has been jailed for seven years after being found guilty of two counts of fraud. Southwark Crown Court heard Kweku Adoboli was "a gamble or two away from destroying Switzerland's largest bank". He lost the money in "unprotected, unhedged, incautious and reckless" trades, the jury was told. Adoboli, 32, of Whitechapel, east London, was cleared of four charges of false accounting. He had denied the charges, which related to the period between October 2008 and September 2011. 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 in 2003 and became a trader in 2006. The court was told that at one point he stood to lose the bank £7.5bn ($12bn). 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. In his sentencing remarks, the judge, Mr Justice Keith, told Adoboli: "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. "Your fall from grace as a result of these convictions is spectacular. The fact is you are profoundly unselfconscious of your own failings.... "

    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." The first verdict returned by the jury saw Adoboli convicted of one count of fraud relating to unauthorised trading leading to the £1.4bn loss to UBS. The judge then 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. The jury had been reduced to five men and five women after two jurors were discharged. They found Adoboli guilty by a majority verdict of the second fraud but acquitted him of the other charges. The prosecution said Adoboli had been a gambler who believed he had the "magic touch".

    But, giving evidence, Adoboli said everything he had done was aimed at benefiting the bank, where he viewed his colleagues as "family". 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 were encouraged to take risks until they got "a slap on the back of the wrist". After the verdicts, Andrew Penhale, deputy head of fraud at the Crown Prosecution Service, said: "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.... Det Insp Steve Head: Adoboli was "running completely out of control"

    "He did so, by breaking the rules, covering up and lying. In any business context, his actions amounted to fraud, pure and simple. "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." He added: "At the heart of any complex fraud is a simple notion of dishonesty which is something that we can all understand." Det Ch Insp Perry Stokes, from the City of London Police, which investigated 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." In a statement, UBS said: "We are glad that the criminal proceedings have reached a conclusion and thank the police and the UK authorities for their professional handling of this case."
    From: Kweku Adoboli
    Sent: 14 September 2011 14:30

    To: Steward, William
    Cc:
    Subject: An Explanation of my Trades

    Hello Will,
    Its with great stress and disappointment that I write this mail.

    First of all, the ETF trades that you see on the ledger are not trades that have been done with a counterparty as I have previously described. I used the bookings as a way to suppress the PnL losses that I have accrued through off book trades that I made. These trades which were previously profit making, became loss making as the market sold off aggressively through the aggressive selloff days of July and early August.

    Initially I had been short futures through June and those lost money when the first Greek confidence vote went through in mid June. In order to try and make the money back I flipped the trade long through the rally. Although I had a couple of opportunities to unwind the long trade for a negligible loss, I did not move quickly enough and the market weakness on the back of the first bad market data and then an escalating Eurozone crisis cost me the losses you will see when the ETF bookings are cancelled. The aim has been to try and make the money back before the September expiry came through, but clearly that has failed. There are still live trades on the book that will need to be unwound. Namely a short position in DAX Futures (which have been rolled to December expiry) and a short position in S&P 500 Futures that are due to expire on Friday. I have now left the office for the sake of discretion. I will need to come back in to discuss the positions and explain face to face, but for reasons that are obvious, I did not think it wise to stay on the desk this afternoon.

    I fully expect that questions will be asked as to why nobody else was aware of these trades. The reality is that I have always maintained that these were EFP trades to the members of my team, BUC, trade support and John DiBacco I take full responsibility for my actions and the shit storm that will new ensue [HOFNIG]. I am deeply sorry to have left this mess for everyone and to have put my bank and my colleagues at risk.

    Thanks,
    Kweku

  2. #2
    Cubic Zirconia
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    Love this story (and of course the title). I use to work for UBS and it was the worst run company I've ever seen. My boss use to take us all out on the corporate credit card 5 times a week. Strip joints, top notch dinners, $800 bottles of wine etc.. He eventually came to a deal with them. He leaves, they pay him a year and a half salary as severance pay and they call it even. HA....what a world....rob a company blind and they pay you to leave quietly. The negro just pushed the limits a weeeeee bit far.

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    Serial Blogger BeerAndPoker's Avatar
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    He's probably the main nigga aka #1N behind the Nigerian Money Scam.

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