Kweku Adoboli, 31 year old ETF trader held over $2bn rogue trade

Discussion in 'Wall St. News' started by ASusilovic, Sep 15, 2011.

  1. most of it was collected by the many fine traders here on et.
     
    #81     Sep 19, 2011
  2. MJTrading

    MJTrading

    Are his trades described in detail anywhere? I see a link to a WSJ article, but I don't subscribe.


    Based on what I have read so far, it sounds like he was supposed to be - for example, buying ES (stock index futures) and short an equivalent position in SPY (ETF), and he was permitted to build up a huge position if hedged properly. I am a little skeptical here; How big of a total asset or notional position would he be permitted to take, even if fully hedged?

    So, it sounds like he took the futures side of the position, but faked the other side: The article states he entered fictitious forward settlement trades. Stock trades settle T + 3, so perhaps he entered tickets for trades that settled weeks in advance? I really don't understand how UBS' systems could be so weak that they don't send out confirmations with counterparties and confirm trades, and furthermore - forward settling trades are supposed to raise red flags with credit risk. Any broker/dealer will have lower counterparty limits for forward settlement trades to reflect that credit risk. For their internal controls to be so full of holes in this day and age, after Nick Leeson and Joe Jett and lord knows who else, is criminal on the part of UBS.
     
    #82     Sep 19, 2011
  3. Why has he not be caught yet? I can smell a rat.. posibly arms deals
     
    #83     Sep 19, 2011
  4. 67.130 called it at 53.00 Up nearly 14 points since the call. Not bad for a scam call. I think it goes hire. IM BACK.

    Shorting BAC that son of a *((_()&& moynihan is a loser. I think its a good trade and more foreclosures coming soon. The default rates are going higher as the pinch in the financials happen again.

    When rates are low and the banks are on the verge of collapse if the public calls in their deposits how long before the house topples.

    I'm half off the table on the FAZ and letting the rest ride. trader now becomes long term investor.
     
    #84     Oct 3, 2011
  5. I heard in UK prisons, the prison officers have to address the convict as SIR or face punishment under the Human rights act.
     
    #85     Oct 3, 2011