Trader accused of fraud against Swiss bank

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LONDON (AP) — A senior trader at the Swiss bank UBS was a “master fraudster” who lost his bank $2.3 billion — and risked a $12 billion loss that threatened its very existence — through more than two years of risky deals and deceit, prosecutors said today.

Prosecution lawyer Sasha Wass told a British jury that Kweku Adoboli lied to his employer, invented clients and breached the bank’s safeguards against high-risk trading between 2008 and 2011.

“He was risking the very existence of the bank by gambling its resources, ultimately for his own benefit,” Wass said on the first day of Adoboli’s trial in London.

Adoboli, 32, was a senior trader in exchange traded funds, which bundle together investments in a particular market index, when he was arrested in September 2011 after UBS discovered irregularities in its records.

The trader admitted that since 2008 he had amassed huge losses on off-the-book trades — failing, against the rules, to hedge against failure by placing balancing trades — and had covered his trail by falsifying records.

Despite the admission, Adoboli has pleaded not guilty to two counts of fraud and two counts of false accounting. His lawyers will outline his defense case later in the trial.

Wass said Adoboli’s fraud wiped $4.5 billion, or 10 percent, off the share price of Switzerland’s biggest bank.

She said Adoboli, who earned $585,000 in salary and bonuses in 2010, “faked bookings, he created false accounts and conducted himself as a master fraudster, deliberately and systematically deceiving and defrauding the bank which employed him.”

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