€1.5bn rogue trader accused weeps as top probe ordered
The City watchdog in London has launched an investigation into why UBS failed to spot allegedly fraudulent trading which has cost the Swiss banking giant ¤1.5bn.
The Financial Services Authority and its Swiss counterpart have ordered a "comprehensive, independent investigation" into the events surrounding trading losses at the bank's London operations.
Yesterday UBS trader Kweku Adoboli wept in the dock as he appeared in court accused of fraud and two charges of false accounting, one of which dated back to 2008.
The 31-year-old was remanded in custody to appear again at City of London Magistrates' Court for a committal hearing.
Last night the FSA and the Swiss Financial Market Supervisory Authority said a third party would investigate the details of the alleged unauthorised trading activity and why the activities remained undetected.
It will also assess the overall strength of UBS's controls to prevent fraud.
During the 15-minute hearing, the well-built Ghanaian was handed a tissue from the clerk as he wiped a tear away.
The alleged fraud offence took place between January 1 and September 14 this year, the court heard.
Adoboli's lawyer Louise Hodges made no application for bail for her client, from Clark Street, Bethnal Green, east London.
The alleged rogue trader, son of a former Ghanaian official for the United Nations, joined the Swiss firm in a junior capacity in 2002.
He worked as a director of exchange traded funds (ETF) and delta-1 trading at UBS Investment Bank.
ETFs are an investment fund traded on stock exchanges, much like stocks, which hold assets such as stocks, commodities or bonds. The disclosure heightened calls for greater regulation in the banking industry. UBS has already been hit by global growth fears.