February 28, 2024

DealBook: UBS Trader to Remain in Custody

LONDON – Kweku M. Adoboli, the UBS trader accused of costing the bank $2.3 billion in losses, is to remain in custody until a hearing next month after his lawyer said he would not apply for bail.

Authorities also amended the allegations against Mr. Adoboli, adding a fraud charge for activities from October 2008 through 2010. Mr. Adoboli also faces two charges for false accounting. The prosecutor, David Levy, said Mr. Adoboli “acted improperly” and that “he carried out reckless and inappropriate trades which he hid.”

Mr. Adoboli’s lawyer, Patrick Gibbs, did not enter a plea but said Mr. Adoboli was “sorry beyond words for what had happened.”

“He stands now appalled at the scale of the consequences of his disastrous miscalculations,” Mr. Gibbs said.

Wearing a dark gray suit, crisp white shirt and dark blue tie, Mr. Adoboli briefly bowed toward the visitors’ gallery in the court with his hands crossed over his chest. In his second brief court appearance since his arrest a week ago, Mr. Adoboli — who looked tense sitting behind a glass wall in a packed room at the City of London Magistrates Court — spoke only to confirm his name, address and date of birth.

Mr. Adoboli, 31, was arrested last Thursday at 3.30 a.m. on suspicion of fraud by abusing his position after UBS had alerted the police, with authorities levying fraud and false accounting charges the following day. UBS, in a statement on Sunday, said that it had lost $2.3 billion as the result of unauthorized trades in equity index futures. Mr. Adoboli, according to the financial firm, masked those activities from internal risk controls with fictitious trades. Mr. Adoboli worked at the bank’s Delta One desk, focusing on exchange-traded funds.

The next court hearing will be on Oct. 20. Prosecutors met with Mr. Adoboli’s legal team Thursday morning, agreeing to move up the court date.

While Mr. Adoboli attended court in London, UBS’s chief executive, Oswald J. Grübel, attended a board meeting in Singapore. The executives discussed the future of the investment banking business and how to improve earnings by restoring investor and client confidence.

Article source: http://feeds.nytimes.com/click.phdo?i=e5556cdf7edb90254ccf83d50edfe770

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