By Estelle Shirbon
LONDON Oct 23 (Reuters) – Ex-UBS trader Kweku
Adoboli was warned by the Swiss bank about a “rogue trading”
scandal at France’s Societe Generale years before he was charged
with fraud over losses of $2.3 billion at UBS, a London court
heard on Tuesday.
Along with all other employees of UBS’s investment banking
arm at the time, Adoboli was sent an email in January 2008 after
SocGen announced losses of 4.9 billion euros ($7.1 billion)
blamed on unauthorised trades by Jerome Kerviel.
Adoboli, 32, used to work as a senior trader on the Exchange
Traded Funds (ETFs) desk at UBS’s London offices. He was
arrested on Sept. 15, 2011 and is now on trial accused of fraud
and false accounting, charges he denies.
The prosecution presented as evidence to the jury an email
sent by UBS’s internal communications team to all investment
bank staff on Jan. 25, 2008, reacting to SocGen’s announcements
about the Kerviel affair.
The email, entitled “Global compliance alert: rogue trader
costs Societe Generale $7.1 billion”, told staff that the case
was a “sobering reminder” of the importance of effective
supervision.
“The trader, who exceeded his limits, was able to conceal
the positions in plain vanilla index futures through ‘a scheme
of elaborate fictitious transactions’ because of his ‘in-depth
knowledge of the control procedures resulting from his previous
employment in the middle office’,” the UBS email said, citing
SocGen announcements.
RED FLAGS
Continued…