1. ITV Report

UBS trader 'risked losing £7.8bn'

Kweku Adoboli. Photo: PA

A "rogue trader" who caused a Swiss bank losses of £1.4 billion was at risk of causing a hole of nearly £7.4 billion, a court has heard.

Kweku Adoboli, 32, is accused of gambling away the money by carrying out high-risk trades in a bid to boost his bonus and job prospects.

He worked as a trader for UBS and thought he had "the magic touch" but in fact caused "chaos and disaster", Southwark Crown Court heard.

He is accused of two counts of fraud and two counts of false accounting while working for the Swiss bank. The charges relate to the period between October 2008 and last September.

He is on trial because he lost his bank 2.3 billion US dollars (£1.4 billion). He fraudulently gambled it away.

He also in doing so wiped around 10% or about 4.5 billion US dollars (£2.8 billion) off the bank's share price.

He did all of this by exceeding his trading limits, by inventing fictitious deals to conceal this and then he lied to his bosses.

Mr Adoboli's motive for this behaviour was to increase his bonus, his status within the bank, his job prospects and of course his ego.

Like most gamblers, he believed he had the magic touch. Like most gamblers, when he lost, he caused chaos and disaster to himself and all of those around him.

At one stage Mr Adoboli was in danger of losing the bank nearly 12 billion US dollars (£7.4 billion) of unhedged investments.

– Prosecuting, Sasha Wass QC

Adoboli worked for UBS's global synthetic equities division, buying and selling exchange traded funds (ETFs), which track different types of stocks, bonds or commodities such as metals.

The bank set a daily trading limit for the ETF desk of 100 billion US dollars (£61.5 billion), and also used hedging to reduce risk - for example buying one type of investment and simultaneously selling a similar one to mitigate any loss.

Prosecutors claim Adoboli failed to hedge several of his investments in order to make a bigger profit for the bank and larger bonus for himself.