UBS rogue trader Kweku Adoboli is warning that rigging is seeping into our society – and that traders breaching risk limits is just the beginning.
Kweku Adoboli, who pulled off the biggest fraud in British history at UBS, told finews.asia in a story earlier Tuesday, focusing on the Swiss bank's risk, finance and systems failings over the $2 billion loss «with some concern».
«This is old school thinking predicated on the flawed idea that bad things happen because bad people do bad things,» he said. «The debate needs to move forward.»
Adoboli, released from prison two years ago, is now an Edinburgh-based public speaker and consultant. He is also fighting deportation to his family's native Ghana.
Not Just Rogue Problem
The former trader believes that what historians refer to as the financialization of society – the increasing role of financial incentives and markets as well as their actors and institutions in our economy and society – will wreak havoc if not addressed.
«The growth of cultural and systemic manipulation across all sectors of our global society – in pursuit of increasingly impossible-to-achieve goals – should be your warning that this isn’t a rogue trader problem,» Adoboli said.
«It is rather one of growing complexity, excess conflict and pressure, and institutions that continue to pursue outcomes that fail to meet or support the social contract.»
Fighting Symptons, Not Disease
He cited academic research by Margaret Heffernan, a University of Bath lecturer who argues that people become unable to make morally sound judgements when they are in extreme conflict, pressured or confronted with immense complexity, and Maryam Kouchaki, a Northwestern Kellogg professor who researches why good employees misbehave.
«The continued obsession with treating symptoms rather then the root cause of these systemic failings is truly frightening to me. We clearly still have so much further to go if we truly do want to prevent these negative outcomes whilst developing better institutions that achieve more for our shared global society,» Adoboli said.
The trader eventually cost then-CEO Oswald Gruebel his job and tainted the career of investment banker Carsten Kengeter, now head of Deutsche Boerse. Adoboli is banned from working in finance due to the fraud, which surfaced in 2011.
