UBS rogue trader loses 1.3bil pounds

UBS rogue trader loses 1.3bil pounds

A rogue UBS trader lost his bank 1.3bil by taking a potty punt on money markets, it emerged last night.

Former boarding school head boy Kweku Adoboli, 31, was arrested at 3.30am yesterday at the London offices of Swiss banking giant UBS.

The bank called the police and Financial Services Authority after checking his trading positions when he allegedly alerted them himself, reports said today.

Adoboli known as a high-living party animal who lives in a "bling" flat was in custody last night facing fraud charges.

He had hinted he was in deep trouble by posting a message on his Facebook page saying: "Need a miracle."

It was one of several clues to inner turmoil revealed by Adoboli.

As money markets suffered huge losses in early August, he wrote: "Can we shut down global markets for a week so everyone can just chill out?"

And just before that he posted: "Will they? Won't they? Reduced to watching Fox News for guidance, it's a grim affair."

Adoboli, the son of a former United Nations official from Ghana, worked on the Swiss banking giant's Delta One desk in London.

The so-called "casino" department tries to make profits by betting on tiny movements in currency and commodity prices.

It is understood the "unauthorised" trade involved a Swiss franc transaction that went horribly wrong after the Swiss National Bank intervened to lower the value of its currency on Tuesday last week.

Adoboli posted his "need a miracle" message the same day.

The massive loss is likely to wipe out UBS's quarterly profits and cost it another 2.6BILLION yesterday as its share price plunged by up to ten per cent.

City analyst Louise Cooper said last night: "Thanks to Mr Adoboli, profits at UBS have melted away as fast as Swiss chocolate in the sun."

The trader has been accused of fraud by abuse of power and was in custody last night. His boss John Hughes is thought to have quit.

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The c ase is an echo of the notorious Nick Leeson affair in 1995, in which the City whizzkid broke Barings Bank after racking up losses of 827million.

UBS is understood to have discovered Adoboli's trade late on Wednesday afternoon.

Chief exec Oswald Grubel called the loss "distressing" and said he would "spare no effort to establish how it happened".

But the bank insisted no customer accounts would be affected.

The case came to light just four days after a Government-backed commission called for banks to ring-fence their "safe" businesses from riskier investment arms.

In a bizarre twist last night, it emerged UBS hired a new Head of Risk, Maureen Miskovic, at the beginning of the year.

She previously occupied a similar position at US bank Lehman Brothers, which went bust in September 2008, triggering the credit crunch.

National News and Pictures Analyst Cooper, of City firm BGC Partners, said the loss made by Adoboli could do "significant reputational damage" to UBS.

But she added: "Humans will always look to break the rules, whether it's the Greek government lying about its finances or sports people trying to cheat with drugs. I'm surprised there aren't more rogue traders given the billions of market transactions that occur every day."

Adoboli lived in Israel, Syria and Iraq before attending 26,000-a-year Ackworth School in West Yorkshire, where he became head boy.

He once described himself as "obsessed with material things and girls" and enjoys "boutique wines".

He moved into a new apartment in Stepney, East London, four months ago after living in a 1,000-a-week flat in Spitalfields on the edge of the City.

He is thought to have a long-term girlfriend, a nurse.

One ex-neighbour told how Adoboli was a party animal who regularly threw "extravagant" bashes.

The neighbour said: "There would be up to 100 people and one went on right through to 10am."

Another neighbour, fund boss William Pitt, 42, said Adoboli lent him a boo! k called The Wolf of Wall Street, describing it as "really good".

It tells the story of white-collar crook Jordan Belfort jailed for stock market manipulation.

Colleagues at UBS told how popular Adoboli's arrest had come as a shock. But one said: "People fear for their jobs because of his actions."

Adoboli's dad John, now retired from the UN, said of his arrest: "The family is heartbroken because fraud is not our way of life."

Speaking in Ghana's capital Accra, he added: "I brought them up to be God-fearing and to appreciate decency."

But he insisted he would speak to his son before drawing any conclusions.
- www.thesun.co.uk