UBS \'rogue trader\' goes on trial in London

A trader accused of a $2.3 billion fraud at Swiss bank UBS was due to go on trial Monday in London in a case expected to once again put the supervision of bankers under the spotlight. Ghanaian-born equities trader Kweku Adoboli denies two counts of fraud and two of false accounting between 2008 and September last year. The son of a Ghanaian former United Nations official, Adoboli worked for UBS\'s global synthetic equities division in the City of London financial district. The 32-year-old, who was privately educated in Britain and attended Nottingham University, was arrested in London on September 15 last year on suspicion of the massive fraud. He had been involved in buying and selling exchange traded funds, which track different types of stocks or commodities such as precious metals. The bank said that the losses -- initially estimated at $2 billion then quickly revised upwards to $2.3 billion (1.8 billion euros) -- arose from allegedly unauthorised speculative trading in S&P500, DAX and EuroStoxx index futures. The true magnitude of the risk exposure had been hidden through \"fictitious\" positions allegedly taken by the trader, the bank said. \"These fictitious trades concealed the fact that the index futures trades violated UBS\'s risk limits,\" it said, adding that the trades -- carried out over a three-month period -- had been unwound and the situation brought back to normal. Adoboli was granted bail on June 8, on condition that he wore an electronic tag. The trial will take place at London\'s Southwark Crown Court, which is expected to be packed with journalists covering the proceedings. Reacting to the allegations, Nick Leeson, the original \"rogue trader\" who in 1995 brought down Barings Bank and served three years in a Singapore jail, said they could illustrate a lack of regulation and control within banks. \"Rogue trading is on the increase. The latest scandals are just a sign that the culture is running riot without any checks in place,\" the Briton told the Independent newspaper last month. \"The rules may be tighter but the behaviour is getting worse. At the moment there is contempt and disdain for the rules.\" Despite the colossal losses, UBS\'s chief executive at the time, Oswald Gruebel, refused to step down. \"I am responsible for everything that happens in the bank. But if you ask me if I feel guilty, then I would say no,\" Gruebel said. The bank\'s honorary chairman Nikolaus Senn, however, said that adequate checks had not been implemented and criticised Gruebel for his over-reliance on the controls system to uncover problems. Gruebel eventually left the bank in the aftermath of Adoboli\'s arrest. His replacement, Sergio Ermotti, admitted in a statement to UBS staff this month that the case would be \"uncomfortable\" for the bank. \"Amidst all the progress that we have made since this incident, we must never forget that our reputation is more important than anything else and that every one of us is a guardian of that reputation,\" he added. The case has sparked debate in Switzerland about the future of investment banking, which was also at the root of UBS\' colossal losses in the US subprime crisis.