UBS 'faced danger of collapse'
London, September 15, 2012
"Naked gambling" by UBS trader Kweku Adoboli nearly brought down the massive Swiss bank as he wagered up to $12 billion, cooked the books and lied to bosses until his "pyramid of fraud" collapsed, a prosecutor told a London court.
Adoboli, the 32-year-old son of a UN diplomat from Ghana, is on trial by jury accused of fraud and false accounting that in the end cost UBS $2.3 billion. He has pleaded not guilty.
Opening the case against him, prosecuting lawyer Sasha Wass yesterday said Adoboli's reckless and unhedged investments had been concealed by fictitious positions entered into UBS systems.
"At one stage, Adoboli was in danger of losing the bank nearly $12 billion 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. Wass said Adoboli's motives were to increase his annual bonus, his status within the bank, his job prospects and his ego. She said his fraudulent deals had wiped 10 per cent, or about $4.5 billion, off the Swiss bank's share price.
"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.
"He was risking the very existence of the bank by gambling its resources, ultimately for his own benefit. In effect, 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," he added.-Reuters