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7 years in prison for former UBS trader Adoboli in fraud case

By the CNN Wire Staff
November 21, 2012 -- Updated 0204 GMT (1004 HKT)
Former UBS banker Kweku Adoboli arrives at Southwark Crown Court in London on Friday.
Former UBS banker Kweku Adoboli arrives at Southwark Crown Court in London on Friday.
STORY HIGHLIGHTS
  • NEW: Former trader Kweku Adoboli is sentenced to seven years in prison
  • Adoboli was convicted Tuesday on two counts of fraud and acquitted on four other charges
  • His actions constituted "pure and simple" fraud, a prosecutor says
  • He was charged in connection with a $2.3 billion loss in unauthorized trading at UBS

London (CNN) -- A former trader for Swiss banking giant UBS was convicted Tuesday on two counts of fraud and sentenced to seven years in prison over what prosecutors called a "staggering" $2.3 billion loss in unauthorized trading.

The court found Kweku Adoboli guilty of two counts of fraud by abuse of position. He was acquitted on four other charges. The court sentenced him to seven years in prison on one count and four years on the other. The sentences will run concurrently, authorities said.

Read more: Accused UBS bank trader 'sorry beyond words'

The loss was among the largest ever to a bank in unauthorized trading, analysts have said.

UBS: What went wrong?
Suspected rogue trader charged with fraud

Prosecutors said the case boiled down to simple dishonesty.

"Behind all the technical financial jargon in this case, the question for the jury was whether Kweku Adoboli had acted dishonestly, in causing a loss to the bank of $2.3 (billion)," Andrew Penhale, deputy head of the Crown Prosecution Service, said in a statement. "He did so, by breaking the rules, covering up and lying. In any business context, his actions amounted to fraud, pure and simple."

"The amount of money involved was staggering, impacting hugely on the bank but also on their employees, shareholders and investors," he said. "This was not a victimless crime."

UBS issued a statement saying it is pleased the case is over and thanked authorities, but declined further comment.

Adoboli, who denied the charges against him, was "sorry beyond words" for the UBS loss, his lawyer said last year.

British authorities charged the trader September 16, one day after his arrest over the unauthorized deals at UBS.

Britain's Financial Services Authority, the Serious Fraud Office and the Crown Prosecution Service were involved in investigating the case.

Read more: UBS revises loss up to $2.3 billion in unauthorized trade

UBS said none of its clients' funds were affected by the losses.

The company posted a profit in the third quarter despite "the unauthorized trading incident," it said in its quarterly report, but its investment banking division recorded a loss of 650 million Swiss francs ($708 million).

The charges against Adoboli led to the resignation of UBS chief executive Oswald J. Gruebel two days later.

At the time, UBS chairman Kaspar Villiger said in a statement the bank regretted Gruebel's decision.

Gruebel "feels that it is his duty to assume responsibility for the recent unauthorized trading incident. It is testimony to his uncompromising principles and integrity," Villiger said.

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