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Business

UBS trader to remain in custody

Text by News Wires

Latest update : 2011-09-22

Kweku Adoboli, the trader accused of losing $2.3 billion in unauthorised deals at Swiss bank UBS, will remain in jail until a hearing next month, a London court ruled Thursday. Adoboli’s lawyer said his client was “sorry beyond words”.

AP - An alleged rogue trader accused of losing Swiss banking giant UBS about $2.3 billion is “sorry beyond words,” his lawyer said Thursday, as a judge ordered him to be held in jail until a hearing next month.

Kweku Adoboli, 31, is charged with four offenses of fraud and false accounting dating back to 2008 and accused of racking up losses in authorized trades. His arrest a week ago has heaped pressure on UBS Chief Executive Oswald Gruebel and stoked speculation that the bank could get rid of its investment banking operations.

At a court hearing in London, prosecuting lawyer David Levy added a new fraud offense to the three previous charges laid against Adoboli, and confirmed that authorities had revised upward the amount allegedly gambled away by the trader to around $2.3 billion. A previous hearing was told the trader was accused of losing $2 billion.

Patrick Gibbs, defending Adoboli, said his client - who wore a gray suit, white shirt and dark blue tie - was truly sorry for his actions.

“He is sorry beyond words for what has happened here, he went to UBS and told them what he had done, and stands now appalled at the scale of the consequences of his disastrous miscalculations,” Gibbs said.

Adoboli, who appeared confident and nodded in acknowledgment to a handful of supporters attending the hearing, spoke only to confirm his name, birth date and address. He did not enter any pleas to the charges.

Presiding magistrate Alison Gowman told Adoboli he would remain in custody until a hearing at City of London Magistrates’ Court on Oct. 20.

Gibbs made no application for bail, and declined to comment to reporters after the hearing.

Adoboli, who was arrested last week, had been employed by UBS on an equities desk known as Delta One and worked with exchange-traded funds. His arrest has prompted speculation over the future of UBS’s Gruebel, who on Thursday met with the Swiss bank’s board of directors in Singapore.

Members of the UBS board and top management may meet again Friday at the bank’s offices in the city-state, a UBS spokeswoman said.

The bank’s leadership had planned to be in Singapore this week because UBS is a major sponsor of the Formula One race being held on the island.

Gruebel said over the weekend that he wouldn’t resign because of the rogue trading scandal. UBS on Wednesday said a media report that Gruebel had already been asked to leave was “pure speculation.”

The 67-year-old former head of rival Swiss bank Credit Suisse was hired more than two years ago to restore UBS’s tattered image after a series of missteps that included heavy subprime losses and an embarrassing U.S. tax evasion case. The bank had to accept a Swiss government bailout of approximately $60 billion.

Earlier this week, the Government of Singapore Investment Corp. - the largest UBS shareholder - said in a rare public rebuke that it was concerned about lapses at UBS.

The sovereign wealth fund, which owns about 6.4 percent of UBS, has suffered heavy losses on its investment as the bank’s share price has more than halved since GIC became a shareholder.

 

Date created : 2011-09-22

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