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Spreadbets and payday loans: Secret life of UBS ‘rogue trader’

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The former UBS trader accused of losing the bank more than $2bn in unauthorised trades owed money to eight payday loan firms when he was arrested last year, a court heard yesterday.

Kweku Adoboli took home a £360,000 salary but was overdrawn and relying on payday lenders after losing huge sums of his own money through a spreadbetting website.

The trader lost £123,000 of his own money through a personal account with IG Index. Adoboli had been officially warned by UBS bosses twice over his undisclosed spreadbetting activities, the Telegraph reports, after the bank banned spreadbetting by traders last year. However, no further action was taken.

The jury was told Adoboli continued trading, but through an account with rival spread-betting firm City Index, and had made a profit of £18,700 on the account by the time of his arrest on 15 September, 2011.

Southwark Crown Court heard he was also overdrawn and owed thousands of pounds on credit cards at the time he was arrested.

Despite seeing £233,000 pass through his NatWest Bank account in the 12 months prior, Adoboli’s account was overdrawn by £3,594 when he was arrested, the court was told.

Across his four bank accounts and two credit cards the 32-year-old trader owed £4,181. His primary current account showed payments to eight pay-day loan companies including Wageday Advance,, Payday UK and Pounds to Pocket, according to the Telegraph.

Dealing in exchange-traded funds (ETFs), Adoboli is alleged to have fraudulently traded for more than two years before he was caught. At one point the former public school head boy had secretly built up a $12bn loss, a sum the prosecution alleges was enough to bring the bank down.

Adoboli’s position was exposed in September last year in an email to his manager stating: “The ETF trades that you see on the ledger are not trades that I have done with a counterparty…The aim had been to try and make the money back before the September cut off expiry date came through but I clearly failed.”

Adoboli is pleading not guilty to the charges against him. The trial continues.


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