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.
Ghanaian-born Mr. 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 his authorized risk limits and making fictitious book entries to hide his true positions.
The judge said Mr. Adoboli had to serve half the sentence before being released on probation, and after taking into account the time already spent in custody would be out of prison in about two and a half years.
The prosecution had portrayed him as a reckless gambler who played God with UBS's money in the arrogant belief that he had the magic touch, driven by a desire to be a star trader with a huge bonus to match.
His defence 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, multibillion-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 Aug. 8, 2011, while his desk's authorized risk limit was $100-million intraday and $50-million overnight.
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 Mr. 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.
Mr. 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.
Wearing a suit and tie, Mr. 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.
Mr. 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.
Mr. Adoboli revealed the losses to his managers in an e-mail on Sept. 14, 2011, and was arrested in the early hours of the following day at UBS offices. His trial started a year later.
A swathe of top UBS executives including former Chief Executive Oswald Gruebel, have resigned, been sacked, or sidelined following the scandal, but the bank and its managers strongly denied encouraging traders to break the rules.
The bank has since slashed the size of its investment banking business, though the ETFs desk has survived.