Former UBS trader Kweku Adoboli was convicted and sentenced to seven years in jail on Tuesday for the biggest fraud in British history, which resulted in a loss of $2.3 billion for the Swiss bank.
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Ghanaian-born Adoboli, 32, a senior trader on the Exchange Traded Funds (ETFs) desk at UBS's investment banking arm in London, admitted trading far in excess of authorized risk limits and making fictitious book entries to hide his true positions.
He cried in the dock as his lawyer Charles Sherrard asked for the judge's clemency, describing him as a sensitive, committed, hard-working young man who had already paid a very high price for what he had done.
"The tragedy for you is that you had everything going for you," the judge, Brian Keith, told Adoboli.
"There is a strong streak of the gambler in you ... You were arrogant enough to think that the bank's rules for traders didn't apply to you."
Adoboli, who composed himself for the judge's remarks, was then taken away by police. He will serve half the sentence before being released on probation, and after taking into account the time already spent in custody could be out of prison in about two and a half years.
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The prosecution had portrayed him as a reckless gambler who played God with UBS's money in the belief that he had the magic touch, driven by a desire to be a star trader with a huge bonus to match.
His defense was that the bank had turned a blind eye to rule-bending as long as profits rolled in and that others knew what he was doing and did not disapprove.
He had pleaded not guilty to two charges of fraud by abuse of position covering the period from October 2008 to his arrest on September 15, 2011.
The jury returned a unanimous verdict of guilty on the main fraud count, holding him directly responsible for the $2.3 billion loss. It related to his unhedged, multi-billion-dollar trades in the summer of 2011.
During the 10-week trial, the court heard that his risk exposure had peaked at $12 billion on August 8, 2011, while his desk's authorized risk limit was $100 million intra-day and $50 million overnight.
ACQUITTED OF FALSE ACCOUNTING
The jury found him guilty by a majority of 9-1 on the other count of fraud, which related to unhedged, unauthorized trading in the period from October 2008 to May 2011.
To convict Adoboli of fraud, the jury had to be certain that he had intended to expose UBS to the risk of losses beyond what was normal for a trader.
He was acquitted on four counts of false accounting related to the fake entries he admitted making into UBS's computer systems to hide his true positions, for which the jury needed to be certain that he had acted for personal financial gain.
Adoboli had always disputed the prosecution argument that he was driven by a desire for a bigger bonus.
"The amount of money involved was staggering, impacting hugely on the bank but also on their employees, shareholders and investors. This was not a victimless crime," said Andrew Penhale, deputy head of fraud at the Crown Prosecution Service, after the verdict.
Though UBS denies a link between Adoboli's losses and its subsequent decision to axe 10,000 jobs and wind down much of its investment bank, others say it would not have happened without the management changes it brought about.
A swathe of top UBS executives including former Chief Executive Oswald Gruebel, have resigned, been sacked, or sidelined following the scandal.
DENIED AN EMBRACE FOR FATHER
Wearing a suit and tie, Adoboli stood in the glass dock at the back of the courtroom at Southwark Crown Court while the jury delivered their verdicts. His father John, who had travelled to Britain from Ghana to support his son throughout the lengthy trial, was seated directly behind the dock.
Adoboli bowed his head when the foreman of the jury gave the first verdict, which was on the main count of fraud. He was then taken into custody and returned later to hear the five other verdicts. He was not given an opportunity to leave the dock to embrace his father.
Adoboli revealed the losses to his managers in an email on September 14, 2011, and was arrested in the early hours of the following day at UBS offices. His trial started a year later.
UBS shares were down 1.45 percent at 14.29 francs at 1459 GMT, while the European banking sector index was down 1.8 percent.