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Rogue trader revealed UBS losses in an email

UBS became aware in September 14 2011, that unauthorised trading had taken place on the Exchange Traded Funds Desk in the Global Synthetic Equities (GSE) trading division in London.

Rogue trader Kweku Adoboli had disguised the underlying positions by the use of late bookings of real trades and the booking of fictitious trades.

In an email sent to chartered accountant William Steward he revealed the £1.4 billion losses he had caused.

It is with great stress and disappointment that I write this mail. First of all the ETF (Exchange Traded Funds) trades that you see on the ledger are not trades that I have done with a counterparty as I previously described.

I used the bookings as a way to suppress the PnL (profit and loss) losses that I have accrued through off book trades that I made.

I take full responsibility for my actions and the s*** storm that will now ensue. I am deeply sorry to have left this mess for everyone and to have put my bank and my colleagues at risk.

Kweku Adoboli

UBS fined after £1.4bn rogue trader scandal

Swiss banking giant UBS has been fined £29.7 million by the Financial Services Authority for failings which allowed convicted rogue trader Kweku Adoboli to lose £1.4 billion.

The FSA said procedures, management systems and internal controls at the bank's London branch were "seriously defective".

Kweku Adoboli who lost £1.4 billion of Swiss bank UBS's money Credit: Press Association

Adoboli was sentenced to seven years in prison last week after he was convicted of two counts of fraud by abuse of position.


Report: Millions of workers 'live in poverty'

Over 6 million people classed as being in poverty live in households where people work, according to a new report.

Excluding pensioners, in-work poverty now outstrips workless poverty, say the Joseph Rowntree Foundation (JRF).

People queue outside a branch of Job Centre Plus in Westminster. Credit: Press Association

The Monitoring Poverty report, written by the New Policy Institute (NPI), also found that spending on benefits and tax credits has never been higher, at 13% of GDP.

Julia Unwin, chief executive of JRF, said: "The level of in-work poverty is the most distinctive characteristic of poverty today.

"We need a relentless focus on fixing the labour market to ensure people have the opportunity to improve their prospects."

FSA: 'UBS's systems and controls were seriously defective'

UBS's systems and controls were seriously defective.

As a result, Adoboli, a relatively junior trader, was allowed to take vast and risky market positions, and UBS failed to manage the risks around that properly.

We know from past experience that failures to manage risk properly can cause firms to fail and cause systemic harm.

– Tracey McDermott, FSA director of enforcement and financial crime
  1. Richard Edgar

Adoboli knew how to hide fake trades

Kweku Adoboli was working on complex trades in a culture that promised big returns.

Crucially, he had experience working in UBS' backroom operation - this is where the checks and balances take place.

Like Nick Leeson, who brought down Barings Bank 17 years ago, he knew how to hide his fake trades.

There are still many questions about UBS management and how they managed to miss such vast sums: at one stage, the potential losses were £7 billion, double what the bank made in profit the year before all this kicked off.

Could this happen again? Not this specific trade, because the banks know about it now. And there is some evidence that the culture is changing.

But one bank observer told me this evening that he could guarantee there would be new loopholes to exploit and, as a result, more trade crimes.

CPS: Simple dishonesty behind Adoboli's complex fraud

Andrew Penhale, deputy head of fraud at the Crown Prosecution Service (CPS) said Kweku Adoboli had simply acted dishonestly, and his fraudulent actions had impacted "hugely" on a large number of people. He said:

"The amount of money involved was staggering, impacting hugely on the bank but also on their employees, shareholders and investors. This was not a victimless crime."


UBS 'glad criminal proceedings have reached a conclusion'

UBS said in a statement they were "glad" criminal proceedings against their former employee Kweku Adoboli had "reached a conclusion." Adoboli was jailed today for seven years for committing the UK's largest ever fraud.

We are glad that the criminal proceedings have reached a conclusion and thank the police and the UK authorities for their professional handling of this case. We have no further comment.

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