Ubs Rogue Trader's Last Phone Call With Bosses

[DTMark]

If you shopped online at say Tesco, and one of their employees decided to leak all the customers' data onto the internet, you might well feel more anger at Tesco than at the employee since Tesco have a duty of care. Indeed, Tesco developers don't have access to customer data. I know, as I worked there once. Basic and sensible precautions.

Is UBS not bound to have some duty of care to its investors here, and is there not a case for prosecution of those in charge there for their complete failure to monitor their staff and put in place basic precautions, such that their money was put at risk?

The trader asserted in court that UBS knew full-well what was going on and turned a blind eye to it in the good times. Which sounds more than plausible to me.

[Colin]

Drunken post deleted

Edited November 21, 2012 by Colin

[Sir Harold m]

Of course he's guilty. He fabricated trades that didn't exist. Sure there must have been some weak or circumvent able controls ( I'm assuming) but a lot of the guys being held guilty of lack of oversight can only control that which is within their universe.

If there are two hundred guys checking instruments on an aircraft then you can't hold the guys responsible for checking wing performance if the guy checking the fuel gauge allows the pilot to corrupt the fuel levels.

Ultimately the problem is that someone is responsible for ensuring all the inter dependent controls are all functioning .

The problem is with big banks is that it is all too impossible especially if a guy is hell bent on fraud. So society has to take a decision, do we allow for this to happen, prosecute the guys who do it and hope the losses are few enough to be justified or do we scrap the possibility at all and drleverage down completely .( not cost free)

Remember of this was prop trading there was an equal winner for the losses made not a net loss to the system , there was a timing issue in reporting as the counterparts profits were not offset by UBS loss for a short time although I don't think this crossed a reporting period.

The guy was guilty , perhaps others too but he was guilty

[leftiebeard]

Same with Leeson. Barings wanted to make their bank 'younger and more dynamic'

Certainly worked.

Same with Applegarth. Another episode of youthful dynamism. IE employ a dipshit to appease Harriet Harman and Jackboot smith that the workplace is suitably 'diverse'

What's become of that particular Master of the Universe? The cult of the all conquering CEO is one of the worst pieces of BS to be promoted over the last 20+ years.

[Traktion]

But there is a huge difference and people should stop comparing incomparables.

If you lose billions through incompetence that's not a crime.

If you lose billions by committing an act of fraud it's a crime ( this case)

If you make billions via fraud it's also a crime (more difficult to get caught I grant you)

Most people on here who rail about banksters accuse the banks of making profits from legally but unscrupulous means e.g lobbying regulators and law makers. I would assume they aren't making losses in this case .

Most of the losses made in 2007-8 were through very bad bets made by certain bankers . Let's face it if they were so called shadowy omnipotents then they wouldn't have made losses would they ?

You have a right to be angry about bailouts but these were politicians running away from a crash they had allowed to happen and had encouraged and feasted upon , as had public sector , homeowners etc etc

Now fine if you want to change the system but let's not confuse dishonesty and incompetence nor should people who committ crimes be allowed to .

If you don't like the law then complain ONLY AFTER you have done everything in your power to try and change it.

It's simply cowardice and laziness to suggest nothing can be done because the banks control everything . It's an easy cop out .

Let's not forget the bigger picture.

The banks pretend to offer 'savings' accounts for 'your' money, when in reality your money becomes their money, which they gamble with 'invest' rather than save safely somewhere.

When they say they are 'lending', they are not. They are extending credit, which is something quite different (hint: it isn't like lending your mate a tenner).

The whole feckin banking system stinks of fraud, so lets not pretend they are innocent here. Ofc, the state turns a blind eye to the banks, as it suits them to do so; it doesn't change the reality of the situation though.

[Traktion]

Bit disappointed.. Adoboli barely spoke.

I thought it would be him making a prat of himself but he just played a bit dumb. Obviously knew the jig was up.

Apparently, he said nothing during 3 days of police interviews either. He is certainly a man of few words.

[Sour Mash]

Let's not forget the bigger picture.

The banks pretend to offer 'savings' accounts for 'your' money, when in reality your money becomes their money, which they gamble with 'invest' rather than save safely somewhere.

When they say they are 'lending', they are not. They are extending credit, which is something quite different (hint: it isn't like lending your mate a tenner).

The whole feckin banking system stinks of fraud, so lets not pretend they are innocent here. Ofc, the state turns a blind eye to the banks, as it suits them to do so; it doesn't change the reality of the situation though.

If the general public took the time to learn how the banking system actually works, it couldn't work as no-one would trust it.

People are brainwashed from schooldays to believe that you 'save' money in a bank, conjuring up images of a kindly, professional, trustworthy banker putting your money in a vault somewhere to keep safely for you. The difference between bank credit and actual money isn't widely understood - in fact, I remember at school the teacher going to great lengths to tell us kids that 'putting your money in the bank' was exactly the same thing as putting it in a box under your bed, only a lot safer.

As a kid of course, the difference between having money and having the bank promise you money was pretty damn clear so the system goes to some effort to convince people otherwise from an early age.

[Bloo Loo]

so. a trader makes a mistake on his accounts..how did he do this...surely he bought and sold on and exchange and the exchange would have brought the account to the attention of his bank seconds after the trades were made....

then the supervisor would check....

and the "mistake" discovered in hours rather than billions later.

[200p]

It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.

Henry Ford

[Sledgehead]

"The court heard that despite a combined salary and bonus of £360,000 Adoboli existed in financial chaos, losing £123,000 in a year on private markets-based spread betting and taking out a string of payday loans to cover the shortfall." Guardian - 20 November 2012

He must be one of those "vulnerable people who are offered inappropriate loans" : - OFT investigates payday loan companies amid 'serious concerns' - Telegraph - 20/11/2012

Edited November 21, 2012 by Sledgehead

[Ulfar]

As for the banks not being criminals because they haven't been convicted, the holes in that logic are laughable.

One point in case LIBOR, deliberately fudged by the banks involved costing everyone money. Have they been prosecuted no, are they guilty of criminal behaviour hell yes.

[ChumpusRex]

so. a trader makes a mistake on his accounts..how did he do this...surely he bought and sold on and exchange and the exchange would have brought the account to the attention of his bank seconds after the trades were made....

Apparently, there is a loophole in the handling of exchange traded securities. The trade is communicated to the bank immediately, but the trade, while agreed immediately, does not need to take place immediately. Not just that, but accounting rules allow the cash from a sale to be "booked" immediately, even if the sale hasn't taken place.

So the banks books could show a surplus cash pool until the trades settle; normally this would be a very short period of time, but with certain assets, such as ETFs it was possible to drag this process out for days. This was how the cash loss was covered, until it got too big.

[justthisbloke]

So what was his game?

Make big bets at work which, if they come good, result in a nice big bonus. While, at the same time, making a counter spreadbet at home so that if the work bet goes bad he can still meet his champagne bill with his winnings.

I went into the wrong line of work, it seems.