Kweku Adoboli: portrait of a gamblaholic

How UBS rogue trader's life spiralled out of control to tune of £1.4bn. By Cahal Milmo
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The Independent Online

In January 2008, times were good for Kweku Adoboli. The financial crisis had yet to bite, and after a rapid rise through the back office of Swiss banking giant UBS, he had made it on to its London trading floor along with a high-octane lifestyle of graft, six-figure salaries and penthouse parties.

Such was the growing ease of the Ghanaian-born son of a United Nations diplomat in the punishingly sharp-elbowed world of City traders that he laughed off the fate of Jerome Kerviel, the Frenchman whose disastrous gambles had that month brought Paris-based Société Génerale to the brink of collapse by running up losses of €4.9bn (£3.9bn).

With the financial world abuzz at news of the hubristic fall of Kerviel and his "off the book" trades, Adoboli was emailed by a friend pointing out an article jokingly putting the Frenchman's losses down to the "stress" of what, in macho City terms, was his laughably short 30-hour working week.

The reply of Adoboli, then aged 28, was laced with schadenfreude. He wrote: "It brings so much joy, this story. And to think, he does exactly what... I do."

In a subsequent email, the friend cited "interesting parallels" between the lives of the two men before adding: "Please don't let me read about you in the papers in the same fashion. It would destroy my faith in human nature forever."

That faith was at least seriously dented in the early hours of 15 September last year when Adoboli, who despite earning £360,000 a year was having to make use of payday loans after running up huge debts on online spread betting sites, was arrested for a vast fraud that sent shockwaves through the City and wiped £2.3bn from UBS's share price.

The trader, whose friends and managers alike had tipped him for the top, had become a gambling addict whose reputation was built on ever-increasing recklessness as he tried to conceal the gap between his image as an unstoppable profit machine and the reality of a man willing to destroy himself – and nearly his bank – to maintain his "star" status.

Yesterday, Adoboli was found guilty of the largest fraud in British history after he gambled away £1.4bn of UBS money and left the bank with a total exposure of £7.5bn.

In the hours before his arrest, he sent his bosses a so-called "bombshell" email admitting to running up huge losses, and apologising for the impending "s*** storm".

Such was the enormity of the trader's losses that the custody sergeant filling in the details of the charges against him had to ask how many zeroes there were in a billion. As prosecutors put it, he had been "a gamble or two away from destroying Switzerland's largest bank".

Kweku did not fit the Square Mile stereotype of the grasping, ego-driven profit hunter. In his own mind, he belonged far more to a class of urbane technocrats, more excited by the process of shuffling millions of pounds around global capitalism's chess board than pure gain. His father John Adoboli, who attended each day of his son's trial, said Kweku and his three sisters had been schooled not to worship wealth above everything. He said: "This is not our way of life. I brought them up to be God-fearing and to appreciate decency."

After joining UBS from university and serving an apprenticeship in the "back office" of the bank where he obtained an intimate knowledge of its accounting and regulatory procedures, he had been promoted to its "front office" and a post on the obscure Delta One desk dealing in an exotic financial instrument known as Exchange Traded Funds (ETFs).

Then, in November 2008, Adoboli began to mimic Kerviel, the man he had derided.

He began to exceed his trading limits and make unhedged investments which he explained away by arbitrarily extending the dates on which his deals were to be settled.

Over time, Adoboli had built up an immense bank of unhedged and unbooked trades broadly predicting a decline in values on European markets. He told his trial that one of his key mistakes was to cave in to pressure from managers to convert this "bearish" stance to a more "bullish" outlook of improving values.

In one single month, his losses ballooned from £2m to £2bn as he continued to bet vast sums in the doomed belief that eventually the market would turn and he could make good his deficit.

Sasha Wass QC, prosecuting, told him: "You played God in that bank, tearing up the rules and doing whatever you wanted. Rules were for other people, that was your attitude."

Adoboli, meanwhile, told his trial: "I absolutely lost control, I was no longer in control of the decisions around the trades we were doing."

In his private life, Adoboli was also losing control. He had become a heavy user of spread-betting websites, devoting hours a week to online gambling which by last summer had cost him £123,000.

During tearful testimony, he would insist that, far from being a gung-ho maverick, he had been merely responding to pressure from his immediate managers right up to the highest levels of the bank to drive its profits and recover a £40bn loss suffered by UBS from its exposure to bad debts in the 2008 financial crisis.

"We were told to push the boundaries, so we pushed the boundaries," he said. "We were told you wouldn't know where the limit of the boundary was until you got a slap on the back of the wrist. We found that boundary, we found the edge, we fell off and I got arrested."

But for Detective Chief Inspector Perry Stokes, who led the investigation for the City of London Police, Adoboli "wanted to continue because he wanted to be the star of the bank."

"A lot of the good views of colleagues and managers had of him were based on lies," he said. His problem was simply that "once he started, he could not stop."

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