Ex UBS trader faces trial
London - Former UBS trader Kweku Adoboli will stand trial in September after pleading not guilty on Monday to charges related to the loss of more than $2bn on trades the Swiss bank says were unauthorised.
The trial, which is likely to shine a searching light on the adequacy of the bank’s management and risk controls, could land Adoboli with a maximum 10-year jail sentence if convicted of the two counts of fraud and two of false accounting.
His lawyer Paul Garlick said Adoboli, who worked for the bank as a director of exchange traded funds in London, where the trial is being held, would try to win bail before it starts on September 3, nearly a year after his arrest.
The losses led to the resignation of UBS’s former chief executive Oswald Gruebel and a shake-up of its investment arm to cut its exposure to risk.
Judge Alistair McCreath said the case was “of such magnitude” that there would have to be a long gap between the plea hearing and the start of the trial.
“An earlier trial would simply not be possible,” he said.
Dressed in a grey suit and blue tie, Adoboli sat in the glass and wood-panelled dock at Southwark Crown Court, taking notes on a piece of paper. He thanked the judge before being led from the dock and back into custody at the end of the hearing.
Adoboli, the British-educated son of a retired United Nations official from Ghana, was arrested on September 15 and charged a day later.
“This puts the focus back on UBS, which is negative,” said one banking analyst, who asked not to be named. “They did not provide a lot of detail about what happened, but a trial does mean more details on their risk systems and on their internal investigation will have to come out.”
The case rocked an industry struggling with the euro zone debt crisis and a global economic slowdown.
UBS itself came close to collapse during the 2008 financial crisis because of its exposure to bad loans in the mortgage market. It cut thousands of jobs and received a state bailout.
Its recovery was then threatened by a US government clampdown on banks helping Americans to dodge taxes.
In a statement after Monday’s hearing, UBS said: “With active criminal proceedings, English criminal law limits what we can say about this incident, therefore UBS will not be commenting.”