Blog#12 Trader Scandal-White Collar Crime

Kweku M. Adoboli, an Ex-UBS trader in London, whose precarious trades ensued a multibillion –dollar loss at a Swiss bank. He is claiming that the bank had knowledge of his actions and encouraged him. Mr. Adoboli’s lawyer, Charles Sherrard stated to the jury that after a series of scandals and missteps at UBS, his client was being singled out. He is being accused of redundancies, reductions in the share price and reputational damage. Mr. Adoboli is charged with six counts of fraud and false accounting in relation to a $2.3 billion loss at the bank. He has pleaded not guilty to the charges and if he is convicted he could be facing 10 years of prison time. His defense contended that the accusations signified a “character assassination,” without holding the UBS roles of management accountable for condoning his trading activity. His lawyer Mr. Sharrard insinuated that the bank’s part demonstrates how the industry is driven exclusively to make money while putting extreme pressure on traders to produce profits. Under British Law, UBS is not considered a defendant and not legally allowed to comment on criminal cases. The defense denied accusations of Mr. Adoboli acting unaccompanied to construct false trades that contributed to concealed losses from 2008 through 2011. Mr. Adoboli’s teams raked in $8.8 million in 2010 and $52 million for the 2^nd quarter of 20ll.
White-collar crime was termed by a sociologist names Edwin Sutherland in 1939.  White collar crimes are crimes executed by persons of a higher social status. Some examples of white collar crime are fraud, insider trading, bankruptcy fraud, bribery, embezzlement, cyber-crime, and forgery. There are many well known cases of white-collar crime in the U.S. such as scandals committed by Martha Stewart and within Enron. These crimes affect society in many ways such as destroying companies and forcing them to raise costs thus causing higher prices for customers, reducing employee wages and creating layoffs, while also causing investors to lose millions of dollars and confidence in the stock market. White collar crime in the U.S. is rising. In 2010 there were 661 cases and in 2011 there were 726 corporate fraud cases of which several of them involved losses on public investments of over $1 billion dollars each. It is evident that white collar crime causes serious social and economic problems. By enforcing harsher punishments for such crimes, this could deter individuals from temptation.
http://dealbook.nytimes.com/2012/11/09/jury-is-told-ex-ubs-trader-was-made-a-scapegoat-for-banks-woes/
http://www.aboutsociology.com/sociology/White_collar_crime
http://money.howstuffworks.com/white-collar-crime5.htm
http://www.fbi.gov/about-us/investigate/white_collar

http://www.fbi.gov/stats-services/publications/financial-crimes-report-2010-2011