Former UBS AG trader Kweku Adoboli was sentenced to seven years in jail for fraud in relation to a $2.3 billion loss, the largest from unauthorized trading in British history.
Adoboli was convicted today following a two-month-long London trial. He had pleaded not guilty and argued UBS managers pushed traders to take too many risks and that rule-breaking at the bank was rampant. The 32-year-old was cleared of four counts of false accounting.
“Your fall from grace as a result of these convictions is spectacular,” Judge Brian Keith told Adoboli when he sentenced him. “You are profoundly un-self-conscious of your own failings. You were arrogant enough to think that the bank’s rules for traders didn’t apply to you.”
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.
Adoboli must serve at least half of the seven-year term, Keith said. That amount will be reduced by the amount of time he has already served.
“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.”
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 has admitted causing the loss, but said he didn’t do it dishonestly.
Adoboli’s lawyer, Charles Sherrard, asked the judge for leniency in sentencing his client because he was only trying to make money for the bank.
“If there’s one thing that we learned in this case it’s that the investment-banking industry needs to take a good, long, hard look at itself,” Sherrard told the judge.
UBS said in an e-mailed statement it was “glad that the criminal proceedings have reached a conclusion and thank the police and the UK authorities for their professional handling of this case.”