Black Trader Arrested After Losing $2 BILLION Of UBS Money, Hints At Turmoil On Facebook
Posted on September 15th, 2011 - By Bossip Staff
Categories: Arrests, News, SMH
UBS said on Thursday that a rogue trader in its investment bank had lost $2 billion, delivering a fresh blow to the beleaguered Swiss bank.
The police in London have arrested a European equities trader, Kweku Adoboli, in connection with the case, according to a person with direct knowledge of the situation who was not authorized to speak publicly. The incident raises questions about the bank’s management and risk policies at time when it is trying to rebuild its operations and bolster its flagging client base. The case could also bolster the efforts of regulators who have been pushing in some countries to separate trading from private banking and other less risky businesses.
The revelation about the rogue trader comes as the bank tries to regain its financial footing. Last month, UBS announced it would shed 3,500 jobs, following poor second-quarter results. In an internal memo, the bank said the unauthorized trading could drag down earnings in the third quarter to a loss, adding that “no client positions” were involved in the “unauthorized trading.”
“It’s a shock, a real negative surprise,” said Panagiotis Spiliopoulos, head of research at the private bank Vontobel in Zurich. “People thought that after the bank had been revamped following the 2008 crisis, it was set up in a way that could avoid this kind of event.”
Shares of UBS dropped more than 8 percent on Thursday, while the broader European banking sector was up. While the authorities did not release his name, the bank confirmed that the person arrested was the trader in question and that he had worked in London. A person with knowledge of the situation identified the trader as Mr. Adoboli.
UBS said the matter was still being investigated and did not disclose other details. Regulators declined to comment on the trades or the markets in the case.
The trader in question, Mr. Adoboli, who graduated with an honors degree in computer science from the University of Nottingham, was a director on the exchange-traded funds and Delta One desk. It is the same sort of group for which Mr. Kerviel worked at Société Générale.
Adoboli hinted on social media network Facebook that he was facing turmoil:
When Kweku Adoboli typed a short update on Facebook last Tuesday, he might have been referring to troubles other than a mounting trading loss at UBS. “Need a miracle,” he wrote.
But the idea that it may have meant the 31-year-old knew he was in trouble provoked pity and shock among friends and acquaintances on Thursday, after he was arrested in connection with a $2bn fraud at the bank where he was a trader.
“There is a lot of shock, horror and disbelief,” said a former colleague. “He was incredibly straight and upstanding with very high integrity. He would definitely not be the first place you start looking.” Friends, colleagues, even a former landlord, had little but praise for Mr Adoboli following his arrest. The native Ghanaian appears to have built up a wide circle of friends and acquaintances during his nearly 20 years in the UK, where he first came as a teenager to boarding school in West Yorkshire. “He was very generous and welcoming, sociable and friendly,” said one acquaintance who met him on his 30th birthday last year.
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