Former UBS trader Kweku Adoboli was found guilty of fraud and sentenced to seven years in prison in connection with a $2.3 billion loss that hobbled the Swiss bank. Adoboli, a native of Ghana who joined the bank in 2003, initially said in an e-mail to a UBS accountant that he had booked fake hedges to hide the risk of his actions.He argued at trial that he was encouraged by superiors to exceed risk limits as he made profits from unauthorized trades. He said nothing he did was dishonest and he intended to make money for the bank.
Adoboli was sentenced bya London judge to seven years in jail on the fraud conviction, and must serveat least half of that term. The jury cleared him on charges of false accounting.
UBS said in a statement it was “glad the criminal proceedings have reached a conclusion.”
Britain’s Financial Services Authority and the Swiss Financial Market Supervisory Authority started formal enforcement actions against UBS over the loss in February. UBS found out in the aftermath of theincident that its internal controls designed to prevent or detect the use of unauthorized and fictitious transactions didn’t work.
“We have been absolutelydetermined to learn from this incident,” Ermotti said in a memo to employees before Adoboli’s trial started in September. “Wehave improved internal monitoring and controls toensure that something likethis does not recur, or if it does, to ensure that it is detected and dealt with swiftly.”
UBS introduced mandatory risk training forstaff globally and a redesigned training for supervisors, while adding risk management to employees’ performance objectives, according to information on its website.
