Rogue trader guilty of £1.4bn fraud 'thought he had the magic touch'

A rogue trader who lost £1.4bn (€1.74bn) in bad deals which nearly brought down a major international bank was found guilty of two counts of fraud today.

Rogue trader guilty of £1.4bn fraud 'thought he had the magic touch'

A rogue trader who lost £1.4bn (€1.74bn) in bad deals which nearly brought down a major international bank was found guilty of two counts of fraud today.

At one point during his run of losses, rising star City trader Kweku Adoboli, 32, stood to run up losses of $12bn (€9.4bn) for employer UBS.

The Ghanaian-born former public schoolboy was accused of exceeding his multi million-pound trading limits and failing to hedge trades and faking records to cover his tracks at the Swiss bank's London office.

He admitted the losses, but claimed that he was pressured by staff to take risks, culminating in bad deals which wiped £2.8bn (€3.5bn) off the bank's share value when they were discovered.

The jury at Southwark Crown Court in London convicted him unanimously of one count of fraud linked to the £1.4bn (€1.74bn) loss.

He was found guilty of a second fraud charge by majority verdict, but cleared of four remaining charges of false accounting.

Adoboli joined UBS as a graduate trainee in 2003 and, at the time of the fraud, worked for its global synthetic equities division, buying and selling exchange traded funds (ETFs), which track different types of stocks, bonds or commodities such as metals.

The prosecution said he was a gambler who believed he had the "magic touch".

But, giving evidence, he 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".

But the jury rejected this defence after deliberating since Wednesday afternoon last week.

Mr Justice Keith adjourned sentencing until this afternoon.

Prosecutor Sasha Wass QC said that Crown would not be pursuing confiscation proceedings in the case, nor would there be any application for compensation.

Detective Chief Inspector 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 façade 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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