Former trader’s trial to force spotlight on UBS practices
The trial, which is likely to shine a searchlight on the adequacy of the bank’s management and risk controls, could land Adoboli with a maximum 10-year jail sentence if convicted of the two counts of fraud and two of false accounting.
His lawyer Paul Garlick said Adoboli, who worked for the bank as a director of exchange traded funds in London, where the trial is being held, would try to win bail before it starts on September 3, nearly a year after his arrest.
The losses led to the resignation of UBS’s former chief executive Oswald Gruebel and a shake-up of its investment arm to cut its exposure to risk.
Judge Alistair McCreath said that the case was “of such magnitude” that there would have to be a long gap between the plea hearing and the start of the trial.
“An earlier trial would simply not be possible,” he said.
Dressed in a grey suit and blue tie, Adoboli sat in the glass and wood-paneled dock at Southwark Crown Court, taking notes on a piece of paper. He thanked the judge before being led from the dock and back into custody at the end of the hearing.
Adoboli, the British-educated son of a retired United Nations official from Ghana, was arrested on Sept 15 and charged a day later.
“This puts the focus back on UBS, which is negative,” said one banking analyst, who asked not to be named. “They did not provide a lot of detail about what happened, but a trial does mean more details on their risk systems and on their internal investigation will have to come out.”
The case rocked an industry struggling with the eurozone debt crisis and a global economic slowdown.
UBS itself came close to collapse during the 2008 financial crisis because of its exposure to bad loans in the mortgage market. It cut thousands of jobs and received a state bailout.
Its recovery was then threatened by a US government clampdown on banks helping Americans to dodge taxes.
UBS have declined to comment on Adoboli’s case.
