UBS rogue trader arrested!
Sept. 16 (Bloomberg) — Kweku Adoboli, the trader arrested yesterday after UBS AG said it discovered unauthorized trades that caused a $2 billion loss, was charged with fraud and two counts of false accounting dating back to 2008 by London police.
The 31-year-old was remanded in custody at a magistrates court in London today until Sept. 22, when he can make an application for bail. Adoboli’s false accounting offenses started in October 2008, according to the court charge sheet. He is also charged with fraud dating back to January 2009.
Adoboli “dishonestly abused” his position as a senior trader, which required him “to safeguard, or not to act against, the financial interests of UBS,” according to court documents.
Adoboli worked for UBS’s investment bank on its Delta One desk, which handles trades for clients, typically helping them to speculate on or hedge the performance of a basket of securities. The group also takes risks with the bank’s own money in arranging trades. UBS has said that no client positions were affected.
The arrest comes as global regulators are pressing banks to curb proprietary trading and is likely to revive calls for firms to increase controls on risk and separate their investment banking from their retail businesses.
The investigation is ongoing and the City of London Police said they are working with the U.K.’s finance regulator, the Financial Services Authority and the Serious Fraud Office, which prosecutes white-collar crime.
“Lawyers from the Crown Prosecution Service Central Fraud Group have today authorized City of London police to charge” Adoboli, said Sue Patten, the head of the CPS group, in a separate statement.