UBS lost $2.2B when a Delta One trader invented fictitious hedges for three years

Kweku Adoboli was a director on the Delta One desk at UBS in London. Beginning in October 2008, he used the bank's money to make unauthorized trades far exceeding his daily limit of $100 million. Rather than hedging his positions, he created fictitious hedging entries in UBS's computer systems to conceal the risk. The deception lasted almost three years.

The scheme unraveled in September 2011 when UBS launched an internal investigation. On September 14, Adoboli sent an email to his manager admitting the unauthorized trades. He was arrested the following day by City of London police. The total loss was $2.2 billion (£1.4 billion), making it the largest unauthorized trading loss in British history at the time.

UBS's share price dropped sharply on the news, wiping approximately $4.5 billion from the bank's market value. The scandal intensified pressure on UBS to shrink its investment bank, a process already underway after the 2008 financial crisis. The bank announced a major restructuring of its investment banking division months later.

Adoboli was charged with two counts of fraud by abuse of position and four counts of false accounting. In November 2012, a jury at Southwark Crown Court found him guilty on both fraud counts and not guilty on the false accounting charges. He was sentenced to seven years in prison and released in June 2015. As a Ghanaian national, he was deported to Ghana in November 2018 after losing his appeal against deportation.