Former student Kweku Adoboli 'gambled away' £1.4bn of bank cash

A "ROGUE trader" accused of Britain's biggest banking fraud was "a gamble or two away from destroying Switzerland's largest bank", a court heard today.

Former University of Nottingham student Kweku Adoboli, 32, is accused of gambling away £1.4 billion while working as a trader for UBS.

At one point he was at risk of causing the bank losses of £7.4 billion, jurors at Southwark Crown Court were told.

Adoboli, who is facing two counts of fraud and two counts of false accounting between October 2008 and last September, allegedly gambled away the money on high-risk trades aimed at boosting his annual bonuses and job prospects.

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Prosecutor Sasha Wass QC said: "He is on trial because he lost his bank £1.4 billion. He fraudulently gambled it away. He also, in doing so, wiped 10%, or about £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."

Adoboli, who graduated from Nottingham in July 2003 with a BSc (Hons) degree in e-commerce and digital business, worked for UBS's global synthetic equities division, buying and selling exchange traded funds, which track different types of stocks, bonds or commodities such as metals.

The bank set a daily trading limit for the ETF desk of £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.

Ms Wass said: "At one stage Mr Adoboli was in danger of losing the bank nearly £7.4 billion of investments."

Adoboli, from Clark Street, Whitechapel, east London, "fraudulently side-stepped" the bank's rules that banned high risk and unauthorised trades, the court heard.

Ms Wass said: "To put the huge trading loss in some sort of perspective, £1.4 billion is enough to pay a year's salary for nearly 70,000 new nurses or perhaps even six new hospitals.

"This colossal loss arose purely as a result of Mr Adoboli's fraudulent deal making, which amounted as you will see, to nothing more than gambling."

"Mr Adoboli had ceased to act as a professional investment banker. He had become what is sometimes referred to as a rogue trader."

Adoboli denies the charges. The trial was adjourned until Monday.