The prosecutor in the trial of UBS trader Kweku Adoboli has accused him of “naked gambling” with reckless, unauthorised investments that could have destroyed Switzerland’s biggest bank.
Opening the case prosecutor Sasha Wass said the trader had created a “pyramid of fraud” to increase his annual bonus, his status within the bank, his job prospects and to boost his ego.
Adoboli, the 32-year-old son of a U.N. diplomat from Ghana, is on trial by jury accused of fraud and false accounting that in the end cost UBS the equivalent of 1.75 billion euros. He has pleaded not guilty
“At one stage, Mr Adoboli was in danger of losing the bank nearly $12 billion (9.1 billion euros) of unhedged investments,” she said, before concluding: “He was a gamble or two away from destroying Switzerland’s largest bank for his own benefit.”
Losses in the double-digit billions could have been fatal to UBS at a time when it was trying to recover from previous colossal losses during the financial crisis of 2008.
“Like most gamblers, he believed he had the magic touch. Like most gamblers, when he lost, he caused chaos and disaster to himself and to all of those around him,” Wass told the jury in London.
“He was risking the very existence of the bank by gambling its resources, ultimately for his own benefit. In effect, Mr Adoboli had ceased to act as a professional investment banker and had begun to approach his work as a naked gambler.
“He had become what is sometimes referred to as a rogue trader.”
The illicit trades had at first earned money for the bank, but Wass said that like a gambler lulled into a false sense of security by an early win, Adoboli got carried away and exposed the bank to ever greater risks and eventually to “colossal”
On September 14, 2011, William Steward, a company accountant, repeatedly queried some of his trades. Wass said Adoboli knew then that he had “reached the end of the track and was about to hit the buffers”.
Adoboli left the office, saying that he had gone to visit a doctor, and sent Steward an email entitled “An explanation of my trades” in which he owned up to falsifying records.
“I am deeply sorry to have left this mess for everyone and to have put my bank and my colleagues at risk,” Adoboli said in what Wass described as “the bombshell email”.
Later that day, Adoboli returned to UBS offices for a series of meetings with managers. He remained there until the middle of the night, when police came to arrest him.