A former UBS (NYSE:UBS) derivatives desk trader is facing seven years in jail after a London jury convicted him on two counts of fraud.
Prosecutors alleged that between 2008 and 2011, Kweku M. Adoboli sidestepped UBS trading controls to make risky derivatives trades and then falsified trading records and created different accounts conceal his mounting losses, The New York Times noted.
Adoboli was arrested last year after he sent an email admitting to false trading activity. The resulting scandal led to the ouster of UBS CEO Oswald Grübel and other key executives.
In tearful testimony, Adoboli contended that bank executives turned a blind eye to his trading activity and rule-breaking as long as he was making money, and that he was being used as an excuse for the bank’s multibillion dollar losses.
Prosecutors argued that Adoboli’s trades initially made profits, boosting his compensation. However, after misjudging the financial markets during the debt crisis in Europe last year, Adoboli’s trades put the bank at risk for up to $12 billion in losses.
Though he was found guilty of fraud, the jury declared Adoboli not guilty on four counts of improper accounting. Adoboli has not indicated whether he will appeal the sentence.
Shares of UBS rose fractionally in midday trading on Tuesday in New York.