Last week a former UBS trader went
on trial for fraud and false accounting having "gambled away" £1.4bn
($2.3bn) of the Bank’s money and caused "chaos and disaster". The
trader exceeded his trading limits at UBS in a bid to get a bigger bonus.
He denies two charges each of false accounting and fraud between October
2008 and September 2011.
His actions are said to have threatened the Swiss bank existence and
helped its share price fall 10%, by about £2.8bn.
"He faked bookings, he created false accounts and conducted himself
as a master fraudster, deliberately and systematically deceiving and defrauding
the bank which was employing him,"
said the prosecution..
At one stage he was in danger of losing the bank nearly £7.4bn.
The prosecutor said he failed to "hedge" against failure by
placing balancing trades.
It was claimed that Mr Adoboli made false entries to make it seem as if
the money he was gambling had been balanced by money coming into the bank.
The trial is set to continue and once again it highlights the basic problems of extremely poor level of Management expertise/control
whilst furthermore illustrating the culture of greed which prevailed in the
banking community.
As the alleged fraud had been conducted over 3
years it begs the question where the controls both were internally and
externally i.e. the Auditors.
Before this
latest black hole was discovered at UBS you can be assured that the trader
responsible for this latest flame out was being lauded and applauded and the
only calculations which were being scrutinised by the Bank’s management was the
size of their forthcoming bonus payments.
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