Arrested rogue trader at UBS said to be Ghanaian

The phenomena of rogue trader is not new to the global banking industry.

In 1995, a British citizen Nick Leeson caused the collapse of Barings Bank when his unauthorised financial trading activities caused the bank to lose £800 million. He was arrested and imprisoned. He wrote a book about how he did the unauthorised trade while still in prison but was not allowed to benefit from the proceeds of the book sale.

And then there was the one involving Societe Generale employee Jerome Kerviel, which is the biggest loss in the history of rogue trading. His rogue trading cost the French bank €4.9 billion. Jerome is currently in prison.

News in the international media say a man was picked at dawn today in London for rogue trading. He has been identified as Kweku Adoboli, a 31-year-old Ghanaian. His activities in derivatives is said to have cost the Swiss bank USB $2 billion, making this the second biggest loss in the history of rogue trading.

According to Wikipedia a rogue trader is an authorised employee making unauthorised trades on behalf of their employer. It is most often applicable to financial trading, and as such is a term used to describe persons – professional traders – making unapproved financial transactions.

And Investopedia describes a rogue trader as a trader who acts independently of others – and, typically, recklessly – usually to the detriment of both the clients and the institution that employs him or her. In most cases this type of trading is high risk and can create huge losses.

Adoboli has worked at the UBS’s headquarters in London’s finance district and according to the Financial Services Authority, he joined UBS in 2006 as a trainee investment advisor.

A former Nottingham University student, he has been Director of European Equity Trading for the Swiss bank. He is also believed to have worked with financial product, Exchange Traded Fund (ETF), an investment fund traded on the world’s stock exchanges.

By Emmanuel K. Dogbevi

Comments are closed.