Ghanaian Rogue Trader Nabbed in $2 billion UBS Loss

Kweku Adoboli, pictured on his Facebook page, reportedly worked in UBS’ equities department

Kweku Adoboli a 31 year old Ghanaian has been arrested by London Police in connection with allegations of unauthorised trading which has cost UBS a Swiss bank $2 billion.

Kweku Adoboli worked in the European equities division of UBS and is currently in custody.

A spokesman for City of London Police said: “We can confirm we arrested a 31-year-old man at 3:30am on suspicion of fraud by abuse of position.”

The trader who is a graduate of the University of Nottingham, joined UBS in 2006 as a trainee investment advisor. He worked his way up the ladder and is currently Director of European Equity Trading for UBS.

UBS Bank chief Oswald Gruebel sent a memo to bank staff stating: ‘We regret to inform you that yesterday we uncovered a case of unauthorised trading by a trader in the Investment Bank. We have reported it to the markets in line with regulatory disclosure obligations. The matter is still being investigated, but we currently estimate the loss on the trades to be around 2 billion US dollars.’

The trader joins a long line of rogue traders, the most famous of which is Nick Leeson a former derivatives broker whose fraudulent,unauthorized speculative trading caused the collapse of Barings Bank, the United Kingdom’s oldest investment bank. Nick Leeson’s losses totalled $1.3 billion.

Table of largest rogue trader losses

Name↓ Date(s)↓ Loss↓ Institution↓ Market activity↓ Sentence↓
Nick Leeson [1] 1995 5 £827 million Barings Bank Nikkei index futures 6.5 years jail
John Rusnak [1] 2002 3 $691 million Allied Irish Banks foreign exchange options 7.5 years jail
Toshihide Iguchi [1] 1995 4 $1.1 billion Resona Holdings U.S. Treasury bonds 4 years jail
Yasuo Hamanaka [1] 1996 6 $2.6 billion Sumitomo Corporation copper 8 years jail
Gianna Gray, David Bullen,Vince Facarra 2003 Oct – 2004 Jan 1 AU$360 million National Australia Bank foreign exchange options 16 months jail, 3 years and 8 months jail,2 years and 4 months jail
Chen Jiulin 2005 2 $550 million China Aviation Oil jet fuel futures 4 years and 3 months jail
Jérôme Kerviel [1] 2006–2008 7 €4.9 billion Société Générale European stock index futures 5 years prison of which 2 years are suspended – may still appeal ruling
Boris Picano-Nacci 2008 Oct 7 €751 million Groupe Caisse d’Epargne Equity Derivatives investigation in progress
Kweku Adoboli [2] 2011 7 $2 billion UBS Equity Derivatives[3] investigation in progress