Ex-UBS trader guilty on fraud charge
Updated On: Nov 20 2012 11:58:34 AM CST
A former trader for Swiss banking giant UBS was convicted Tuesday on two counts of fraud and sentenced to seven years in prison over what prosecutors called a "staggering" $2.3 billion loss in unauthorized trading.
The court found Kweku Adoboli guilty of two counts of fraud by abuse of position. He was acquitted on four other charges. The court sentenced him to seven years in prison on one count and four years on the other. The sentences will run concurrently, authorities said.
The loss was among the largest ever to a bank in unauthorized trading, analysts have said.
Prosecutors said the case boiled down to simple dishonesty.
"Behind all the technical financial jargon in this case, the question for the jury was whether Kweku Adoboli had acted dishonestly, in causing a loss to the bank of $2.3 (billion)," Andrew Penhale, deputy head of the Crown Prosecution Service, said in a statement. "He did so, by breaking the rules, covering up and lying. In any business context, his actions amounted to fraud, pure and simple."
"The amount of money involved was staggering, impacting hugely on the bank but also on their employees, shareholders and investors," he said. "This was not a victimless crime."
UBS issued a statement saying it is pleased the case is over and thanked authorities, but declined further comment.
Adoboli, who denied the charges against him, was "sorry beyond words" for the UBS loss, his lawyer said last year.
British authorities charged the trader September 16, one day after his arrest over the unauthorized deals at UBS.
Britain's Financial Services Authority, the Serious Fraud Office and the Crown Prosecution Service were involved in investigating the case.
UBS said none of its clients' funds were affected by the losses.
The company posted a profit in the third quarter despite "the unauthorized trading incident," it said in its quarterly report, but its investment banking division recorded a loss of 650 million Swiss francs ($708 million).
The charges against Adoboli led to the resignation of UBS chief executive Oswald J. Gruebel two days later.
At the time, UBS chairman Kaspar Villiger said in a statement the bank regretted Gruebel's decision.
Gruebel "feels that it is his duty to assume responsibility for the recent unauthorized trading incident. It is testimony to his uncompromising principles and integrity," Villiger said.
Copyright 2012 by CNN NewSource. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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