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A rogue traders’ tale
The personal story of Kweku Adoboli, the British trader who was convicted in 2012 for losing $2.3bn of the Swiss bank UBS, was published in Fall 2015 (Fortado, 2015). Adoboli spent nearly four years in prison for exceeding his risk limits and hiding this by booking fictitious hedging trades. For years, using these methods, he made millions for the bank. In 2010, he was promoted as the Director and was awarded a £250.000 bonus (which he never received), on top of his £110.000 salary.
A former UBS trader was quoted saying that Adoboli was the man to turn to if you had screwed up. He would fix it for you: “We didn’t know how he did it, but we didn’t want to know” (Fortado, 2015, p. 5). Adoboli says that “others did in fact know, and actively encouraged his behaviour for more than two years as long as it was profitable” (Fortado, 2015, p. 8).
Adoboli was convicted and condemned by the public, being the perfect mascot of The City’s “greedy” and misbehaving bankers, at a moment when public trust in banking reached an ultimate low. Yet, according to Adoboli:
by holding up himself and Tom Hayes, the former UBS and Citigroup derivatives trader who was jailed […] for manipulating Libor, as rotten apples in otherwise a clean industry, the banks are moving on without considering what happened to allow or even encourage their misconduct (Fortado, 2015, p. 11).
We may never know what caused Adoboli to commit fraud. But the targets and praise Adoboli received from his management, the calls for aid from his teammates and the fact that others chose not to ask questions likely influenced the way he acted. We, therefore, argue that punishment of individuals such as Adoboli in itself is not sufficient to prevent future misconduct. Root causes of such misconduct can also be found in the professional context in general and the dynamics of the trading team in particular. As long as these contextual root causes are not dealt with, chances are considerable that similar misconduct cases will emerge in the future.
This contribution addresses contextual root causes of misconduct from a social psychological perspective. We argue that shared behavioural patterns reflecting the climate within...