UBS, it appears, had no idea that accused rogue trader Kweku Adoboli might be messing around with unauthorized risks in its London office, losing $2 billion. It's shocking that $2 billion could slip away so easily, but that's apparently what happened.
The bank's analytics simply never caught on, and by now, you know what happened from there -- $2 billion is gone, and the 31-year-old Adoboli has been arrested by London police and charged with three counts while UBS, the Swiss bank with global operations, tries to pick up what pieces of its reputation it has left.
But if banking systems aren't sophisticated enough to pick up $2 billion lost in unauthorized trades, perhaps the bank should only monitor the Facebook posts of its trusted traders. Perhaps any big bank should simply monitor the Facebook posts of its trusted trading members.
Banks should consider doing so because while UBS' controls system didn't pick up the unauthorized action and missing money, Adoboli's Facebook friends certainly got hints that something serious was up. All they had to do was read what the Ghana native was writing on his "wall."
"I need a miracle," is one post by Adoboli, which was visible to the roughly 420 Facebook friends he had before his social network page was taken down the afternoon of his London arrest late this week.
And while global markets rocked and roiled last month, Adoboli gave another clue, wondering if the markets would settle and come back: "Will they? Won't they? Reduced to watching Fox News for guidance, it's a grim affair."
"Can we shut down global markets for a week so everyone can just chill out?" Adoboli wrote in one of his social network posts.
Whether Adoboli had shared the news with some friends before apparently confessing to UBS bank that he might be in trouble for unauthorized trading or not isn't yet known. But it is clear, that through his Facebook posts, we know that some friends were worried about Adoboli before he was arrested.
"You are a genuinely good person, honest and humble. You don't deserve this ... You will get through it," one friend wrote on Adoboli's Facebook wall.
Adoboli wept in court Friday in London during a 15-minute hearing in London over a charge of fraud and two charges of false accounting involving a $2 billion loss for the Swiss-based bank.
Wearing an open-necked white shirt and a sky-blue sweatshirt, according to The Telegraph, the 31-year-old Adoboli was handed a tissue from the court clerk and he wiped a tear away during the hearing.
The court read the charges against Adoboli in the brief hearing: "While occupying a position, namely being a senior trader with Global Synthetic Equities, in which you were expected to safeguard, or not to act against, the financial interests of UBS Bank, you dishonestly abused that position intending thereby to make a gain for yourself, causing losses to UBS or to expose UBS to risk of loss."
The court said the fraud offense allegedly occurred between Jan. 1 and Sept. 14 of this year, while the alleged two accusations of false accounting occurred between 2008 and 2009 and between January and September of this year.
UBS, Switzerland's largest bank with global operations, asked British police to arrest the company employee. Adoboli was reportedly arrested at a business address in London at 3:30 a.m. Thursday on charges of fraud and abuse of position in connection with the trading losses.
According to the BBC, Adoboli allegedly told UBS about his activity after the bank's monitoring systems hadn't picked up the loss. He was later arrested at his desk at UBS after the bank contacted London police.
Colleagues at UBS AG called Adoboli "up and coming" and someone who "worked hard ... played quite hard, too."
Adoboli was arrested on Thursday by London police on suspicion of fraud by abuse of position. Born in Ghana, the Nottingham University alum studied computer science in college and went to work at UBS in London in 2006.
According to The Financial Times, a former colleague of Adoboli's who worked in UBS' London-based exchange and sat near the trader said Adoboli was well regarded by fellow workers.
"He came across as someone who worked quite hard to get where he was and played quite hard, too," the acquaintance told The Financial Times. "There is a lot of shock, horror and disbelief. He was incredibly straight and upstanding with very high integrity. He would definitely not be the first place you start looking."
Now, however, Adoboli is precisely who authorities are looking at for UBS' lost $2 billion.