UBS trader apologizes, now faces new charge
LONDON - Kweku Adoboli, the UBS trader charged with fraud and false accounting that may have resulted in a $2.3 billion loss, said through his lawyer that he was “sorry beyond words’’ after facing an additional fraud charge at a court hearing yesterday.
The 31-year-old, who holds a Ghanaian passport, did not apply for bail when he appeared at a magistrates court. Prosecutor David Levy said the alleged loss may exceed $2.3 billion. Adoboli was not required to enter a plea yesterday, and another hearing was scheduled for Oct. 20.
The trader is “sorry beyond words for what happened here,’’ said Patrick Gibbs, Adoboli’s lawyer. He apologized for his “disastrous miscalculations,’’ Gibbs said.
Adoboli has been held since his Sept. 15 arrest on suspicion of making the unauthorized trades.
Prosecutors charged him Sept. 17 with fraud and false accounting dating to 2008. The prosecution yesterday added a charge to extend the fraud allegations to 2008, as well.
If convicted, he faces up to 10 years in prison.
Louise Hodges, another of Adoboli’s lawyers, declined to comment after the hearing. Yves Kaufmann, a spokesman for UBS in Zurich said “the loss arising from the unauthorized trades is $2.3 billion, as we have stated’’ previously.
Adoboli “dishonestly abused’’ his position as a senior trader on the global synthetic-equity desk “to make a gain’’ for himself and “to expose UBS to a risk of loss,’’ prosecutors said in court papers. He was “expected to safeguard, and not to act against, the financial interest of UBS,’’ they said.
Adoboli worked for UBS’s investment bank on its Delta One desk, handling trades for clients, helping them to speculate on, or hedge the performance of, a basket of securities. The group also trades using the bank’s own money. UBS has said that no client positions were affected.
UBS’s loss came from trading in Standard & Poor’s 500, DAX, and EuroStoxx index futures during the past three months, according to the bank. The risk of the trades was masked by fictitious positions, UBS said.
The Financial Services Authority and the Swiss Financial Market Supervisory Authority last week opened a joint investigation into control failures at UBS that allowed the trades to go undetected.
The joint regulatory probe will be conducted at the same time as investigations by police and prosecutors and an internal review by Zurich-based UBS.
The FSA and the Swiss regulator, known as Finma, said their investigation will focus on the details of the allegedly unauthorized trades and the control failures that allowed them to happen.