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Kweku Adoboli, now known by many as the UBS rogue trader, pleaded not guilty this morning in London court to charges that his unauthorised trading activities resulted in a $2.3 billion loss.Since Adoboli’s arrest in September, the $2.3 billion loss has already put a dent in UBS’ 2011 earnings, caused the resignation of its CEO and multiple executives, effected employee bonuses and brought an influx of negative publicity for the bank.
Now that Adoboli’s “not guilty” plea is in, it could only mean more prolonged humiliation for UBS amid reports that the bank may face fines for its conduct leading up to the discovery of the trading loss, the Wall Street Journal reported last night before Adoboli’s court appearance, citing sources close to the situation.
The UK’s Financial Services Authority (FSA) and Switzerland’s Financial Market Supervisory Authority (Finma) have both been investigating UBS’ role in the trading loss—the FSA has the ability to levy fines and Finma can force banks to fire certain employees and executives, according to the WSJ. When that enforcement action is expected to come down, however, is unclear.
With Adoboli’s “not guilty” set in stone, it’s guaranteed that his trial and related tribulations for UBS will play out very much in the public eye. The trial has been set for Sept. 3.