ADOBOLI LOSES BID TO APPEAL UNAUTHORIZED UBS TRADING SENTENCE

ADOBOLI LOSES BID TO APPEAL UNAUTHORIZED UBS TRADING SENTENCE

By Jeremy Hodges July 30, 2013 Bloomberg

Former UBS AG (UBSN) trader Kweku Adoboli lost his first attempt to appeal his conviction for causing a $2.3 billion loss through unauthorized trading.

Permission to appeal was turned down by a London judge on June 25, according to court records made available this week. Adoboli is seeking a hearing to ask in person for an appeal, which won’t happen until after Oct. 1, Michael Duncan, a spokesman for the U.K. court system, said in an e-mail.

Adoboli was convicted in November of two counts of fraud for causing the loss at the bank’s London unit. He argued at trial that managers at the Swiss bank pushed him to take too many risks and that rule-breaking at the bank was rampant. While he admitted causing the loss, he said it wasn’t done dishonestly. Adoboli was ordered to serve at least half of a seven-year prison sentence.

He is serving his sentence at Verne Prison on the Isle of Portland , a small island off the south coast of Dorset, England , that was once a military barracks. He has joined the choir and taken on a volunteer role at the prison.

While the 10-member jury was unanimous in finding Adoboli guilty of one count of fraud during the period in which the loss was caused, jurors didn’t reach unanimous decisions on the remaining fraud count and on four counts of false accounting. Acquitted He was convicted 9-1 on the second fraud charge, which dated back to 2008, and acquitted on the false accounting charges.

Jenna Ward, a London-based spokeswoman for UBS, declined to immediately comment. Paul Lennon, a lawyer for Adoboli, declined to immediately comment.

Adoboli, who worked for UBS since leaving college, was accused of hiding the risk of his trades by booking fake hedges and storing profits in a secret account to cover the costs of running the bank’s exchange-traded-funds desk.

During the two-month trial, prosecutor Sasha Wass called Adoboli arrogant, reckless and an “accomplished liar” who “played God” with the bank’s money for the sake of his status, ego and bonus. Lawyers for Adoboli countered that he didn’t benefit personally from the trades and his only goal was to make money for the bank and trading desk that he said replaced his family.

UBS was fined 29.7 million pounds ($45.4 million) in November by the U.K. financial regulator and told by the Swiss watchdog it may have to increase capital levels for operational risks after the loss from Adoboli’s trades.

At least 11 employees left the bank in the wake of the trading loss, either through firings or resignations. That included former Chief Executive Officer Oswald Gruebel and the co-heads of global equities, Yassine Bouhara and Francois Gouws. Adoboli’s co-workers on the ETF desk -- John Hughes, Simon Taylor and Christophe Bertrand -- all also left the bank, as did his former managers, Ron Greenidge and John DiBacco.

To contact the reporter on this story: Jeremy Hodges in London at jhodges17@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net