In 2013 Kweku Adeboli was jailed for 7 years for committing the biggest White Collar fraud in UK history. This case study can be used to selectively criticise aspects of the Marxist theory of crime.
A City trader recklessly gambled with illicit trades to boost his bonus, and ran up potential losses of more than £7bn at one point, a sum big enough to sink his employer, the global bank UBS, a court has heard.
Kweku Adoboli, a trusted and experienced member of UBS’s exchange traded fund (ETF) desk in London, risked ever-greater sums in an attempt to conceal his losses over two and a half years before he was caught in September 2011, Southwark crown court was told.
Sasha Wass QC, prosecuting, said “Mr Adoboli’s motive was to increase his bonus, his status, his job prospects and his ego. Like most gamblers he believed he had the magic touch. Like most gamblers, when he lost, he caused chaos and disaster to himself and all of those around him.”
The total losses to UBS were eventually calculated at $2.3bn, or just over £1.4bn. Wass told the jury: “This colossal loss rose purely as a result of Mr Adoboli’s fraudulent deal making, which amounted to naked gambling.” However, she added, at one point the scale of Adoboli’s liabilities to the bank through vast trades, reached almost $12bn which risked the very existence of the bank itself.
Adoboli racked up the giant losses undetected through three means. First, he often exceeded the official daily trading limit per employee of $100m. He also failed to hedge trades by making balancing trades to mitigate potential losses, an insurance method that also caps potential profits. Finally, he falsified data so as not to record his trades properly, often inventing false clients and trades for hedges.
But on 14 September, under intense scrutiny and aware a number of trades were “about to hit the buffers”, Adoboli panicked and walked out of the UBS office, saying he had to see a doctor. Using his home email account he sent his bosses a message which, Wass argued, admitted his guilt.
In the email, read to the court, Adoboli said he had tried to suppress losses from “off book” trades, a number of which were, he warned, still “live”. It continued: “I have now left the office for the sake of discretion. I will need to come back in to discuss the positions and explain face to face but for reasons that are obvious I did not think it was wise to stay on the desk this afternoon.”
Adoboli, a former public schoolboy, denies four counts of fraud and false accounting between October 2008 and September 2011.Adoboli became a trader in December 2005, was promoted to associate director in March 2008 and then director in March 2010. His salary rose dramatically as his career progressed. In 2007 he earned £40,000 and a bonus of £55,000; in 2008 he earned £50,000 and a bonus of £15,000. Then in 2009 he earned £100,000 with a £95,000 bonus; and in 2010 his salary was £100 000 and bonus £200 000
What aspects of the Marxist theory of crime does this support or criticise?