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Rogue Traders

September 19, 2011

I wanted to make a couple of quick notes and observations regarding last week’s revelations regarding UBS and its “rogue” trader, Kweku Adoboli.

As with standard procedure, the weapon of choice with a control fraud is accounting fraud. The case with UBS is no different.

Mr. Adoboli is being hailed as a rogue trader. But is he really? Often with cases such as this one, the CEO is the one who molds and creates the type of environment that rewards employees–traders in this case–for taking high risks in order to generate vasts sums of profits. Those unwilling or unable to adapt to this environment are dismissed or do not reap the benefits of the rewards. From my estimation, Mr. Adoboli was simply nothing more than a product of this type of environment. It wouldn’t surprise me if there are traders who are already taking over Mr. Adoboli’s spot at UBS and continuing this high-risk game.

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