Kweku Adoboli

USB "rogue" trader Kweku Adoboli

Kweku Adoboli, the “rogue trader” who cost UBS billions of dollars with a bad trade in 2011, has been found guilty by a British court on two counts of fraud, while being acquitted on four other counts of false accounting.

in a case most applicable to the arrest and trial of Lynndie England for torture. Instead of UBS facing responsibility for fraud and abuse, one lone trader, responsible for apparently all the fraud undertaken by the bank, takes the fall.

During the case, Mr. Adoboli, 32, argued that his actions were aimed at generating profit for the bank and that colleagues knew about them. But the prosecution had described Mr. Adoboli as “arrogant” and a “gambler” who sidestepped rules when it suited him. Mr. Adoboli was accused of circumventing UBS risk controls and hiding losses by booking fake trades.

In a packed courtroom in London, Judge Brian Keith told Mr. Adoboli that he was “profoundly unself-conscious of your own failings. You were arrogant enough to think the bank’s rules for traders didn’t apply to you.”

UBS must be really pleased by this result. Adoboli did fake trades and sidestep risk controls. But the corporate culture practically demanded that, and UBS had more of a wink-and-a-nod approach to their traders than an actual risk control environment. And the fact that these rogue traders just randomly popped up at other banks, like the French firm Société Générale and the London investment offices of JPMorgan Chase, suggests that there wasn’t really any desire to stop the so-called rogue traders, as long as they made money. We only hear about the ones who booked a loss.

Adoboli’s defense argued that he has been made a scapegoat for UBS, and that when he made money for UBS from his schemes, he actually saw boosts in his salary. That’s not an excuse for his conduct, but it also happens to be true. Management loved their rogue traders when they turned a profit. When they didn’t, they’re suddenly criminals. There were two sets of rules, one for good traders and one for bad.

When someone in management has to answer for that, wake me up.