LONDON (Reuters) - A former senior trader at UBS, sacked for failing to prevent colleague Kweku Adoboli from perpetrating the biggest fraud in British history, has set up a gambling website.
In a decision likely to be seized upon by critics who say traders have often made casino-style bets, John Hughes started his gambling firm even though his website said his old job had “removed all sense of optimism from his character”.
Adoboli, his former subordinate now serving seven years in jail for running up losses of $2.3 billion, argued during his trial that his own behavior was the result of a risky trading culture encouraged by senior colleagues, and his lawyers alleged that Hughes had played a major role in “off-book” trading.
Hughes admitted he had known of Adoboli’s scheme to hide his giant losses and that he had booked several fictitious trades himself, but denied knowledge of some of Adoboli’s biggest multi-billion dollar trades.
Hughes said he had chosen to call his new gambling website ‘BetsofMates’, a play on the expression “Best of Mates”.
That may grate with Adoboli who complained that his colleagues, including Hughes, had “sold me down the river” after a meeting at which he said it was decided he alone would carry the can for the huge losses.
Hughes and the others said they had no memory of such a meeting.
“We’re not a standard bookie,” Hughes said of his new website, which enables users to play against each other in leagues, with each player placing bets of between two and 200 pounds.
“We facilitate competition. The emphasis is a lot more on competition than yield enhancement,” he told Reuters on Thursday.
The former senior trader on the Exchange Traded Funds desk at UBS in London said Adoboli’s conviction was “just incredibly sad”. He declined to comment further.
Despite a large salary and bonus, Adoboli was himself an avid gambler and lost 123,000 pounds ($200,000) on spread-betting in the year before his arrest.
One prosecutor accused him of being addicted to gambling to which Adoboli countered that spread-betting was common among City traders “like a taxi driver driving his own taxi home”.
Hughes’ profile on his new firm’s website says that “seven years in the City (had) removed all sense of optimism from his character, and made him absurdly superstitious.”
He told Reuters such feelings had arisen “sitting there watching the markets for seven years and watching different news hit the tapes and obviously the last seven years haven’t been the easiest in the financial markets.”
Britain’s Gambling Commission granted a license to his pool betting company ‘Bets of Mates Limited’, which is registered to an East London address, in September 2012, two months before Adoboli was convicted.
Editing by Andrew Osborn