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A Rogue Trader Blames the System, but Not All Are Persuaded
By ANITA RAGHAVANMARCH 24, 2017



The former UBS trader Kweko M. Adoboli in 2012. “I don’t want some kid to go through what I went through,” he said in a talk this week. Credit Stefan Wermuth/Reuters

LONDON — Six years ago, Kweku M. Adoboli was a UBS trader with a rich life in London.

He had a two-bedroom apartment in London’s fashionable Shoreditch neighborhood. He had a girlfriend he was planning to marry. And he had just earned 360,000 pounds in salary and bonus as a trader at the giant Swiss bank.

Today, he doesn’t have a job or a girlfriend, and he lives with a university friend and his friend’s family in Edinburgh.

After being convicted in November 2012 on two counts of fraud arising from a $2.3 billion loss at UBS, Mr. Adoboli is now battling to stay in Britain.

He was back in London this week to speak to 250 people at the European conference of the Association of Certified Fraud Examiners.

In an interview, Mr. Adoboli insisted that there was little about his old life that he missed except his relationship with his former girlfriend. “I lost the love of my life,” he said. She stuck with him almost until the end of his time in prison, he said, and the two remain friends.

Speaking at the conference on Tuesday, Mr. Adoboli acknowledged that some view his appearances before groups like the Oxford Students’ Union and the Forward Institute, a British think tank, as a “cynical ploy” to avoid deportation on grounds that there is a public interest in having him remain in Britain. The British authorities have served a deportation order on Mr. Adoboli, who came to England from Ghana at the age of 12.

Yet Mr. Adoboli, 36, believes that his experience offers a valuable lesson to regulators and financial institutions on the need for robust controls at investment banks and a change in their profits-at-all-costs work culture.

“I don’t want some kid to go through what I went through,” he said. “It is heartbreaking, and the only way we change that is we fix the system.”

In a wide-ranging talk, Mr. Adoboli touched on his childhood. His father was a United Nations employee and, in the early 1990s, he says, the Adobolis were evacuated from Iraq. At the age of 12, Mr. Adoboli was sent to a Quaker boarding school in Yorkshire, in northern England, where he took inspiration from the school’s motto “Non Sibi Sed Omnibus,” Latin for “Not for Himself but for All.”

Following that motto at UBS, he contends, led to his downfall. Faced with growing questions within the bank, Mr. Adoboli sent an email to an in-house accountant on Sept. 14, 2011, admitting that he had booked fictitious trades to hide losses and that he was prepared to take responsibility for his actions.

He was arrested soon after the email was sent, setting in motion a chain of events that would eventually lead to him being sentenced to seven years in prison. He served about half of that term and was released two years ago.

At the conference, Mr. Adoboli tried to paint his actions as business as usual during the time he worked on UBS’s exchange-traded funds desk.

For instance, he claimed that a rainy-day fund to offset losses in the desk’s trading book that came to be known as the “Umbrella” was an “evolution of existing accounting practices.”

In the speech, Mr. Adoboli tried to move the spotlight from his role in triggering the biggest single trading loss in UBS history to what he said were cultural and systemic shortcomings at investment banks like UBS.

UBS declined to comment, but the courts and others have laid responsibility on Mr. Adoboli.

An appeals court judgment in June 2014 described the Umbrella as essential to Mr. Adoboli’s fraud. “Some of his unauthorized trades had made a profit, which he drip-fed back to the bank in order not to raise concern,” according to the judgment. “This holding back of money was referred to as ‘his’ umbrella.”

Mr. Adoboli also blamed the strenuous work culture at banks for paving the way for him to make “morally unsound” decisions as losses started to pile up.

He said the praise he received — he and his colleague were singled out at an equities meeting in 2011 for being dynamic and innovative — only made him feel that “it is my responsibility to push the boundaries to innovate. I am being put on a pedestal. How can it be wrong?”

In turning down his appeal, however, the court noted that “other employees gave evidence that they were not encouraged to take excessive risks in their trading.”

Some of those in the London audience on Tuesday also appeared to be skeptical. Mr. Adoboli was asked at what stage he knew he was committing a crime.

“I don’t think at any stage I felt guilty of committing a crime,” he said. “Everything I had done was for the bank and for my colleagues.”

John Little, an accounting professor at Cornell University’s SC Johnson College of Business, who was in the audience, said that he found many of Mr. Adoboli’s claims implausible.

“The mere fact that he is recording a false entry — that is bad behavior. You can’t get away from that,” Professor Little said. “And he didn’t admit to that.”

Murat Ueranuez, a forensic accountant for the consultant company Equia in Zurich, also wasn’t swayed. “It was not very convincing that he sacrificed his life for the bank,” he said.


https://www.nytimes.com/2017/03/24/business/dealbook/ubs-trader-fraud-lessons.html?ref=business