Villains of 2011: Part 4
Remember Barings Bank and Nick Leeson? Well 16 years since the oldest merchant bank collapsed, it's as if the world has learnt nothing. Another rogue trader was caught at UBS in September having amassed losses of $2bn (nearly double Leeson's fateful dealing disaster) on highly risky exchange-rated funds (ETFs).
Regulators had already voiced concerns over this extremely high-risk financial instruments but major banks kept watching the profits flood in. The 31 year-old Adoboli had joined the bank as a graduate and was described as a "high flyer" – another term for risk junkie – and rose quickly to become on the leading Delta One desk stars.Like Jerome Kerviel, the Societe Generale Delta One trader who blew a €4.9bn hole in the French bank, Adoboli was regarded a "nice guy" but socially stayed under the radar, a loner who "kept his flat clean and worked very hard". Maybe these new rogue traders had learnt one thing from Leeson, not to be ostentatious or flamboyant with money, the diametric opposite of the Flaming Ferraris of the 1990s.
It worked. No-one questioned his amazing performance and compliance missed his "unauthorised trades" and "falsifying records on his trading accounts".