Tricks of the trade

Last September’s UBS rogue trader scandal – which saw the bank lose a massive UK£1.3bn through alleged fraud and false accounting by trader Kweku Adoboli – once again raised the spectre of fraud in financial services. The Head of Operational Risk at a global investment bank provides pointers on detecting and preventing fraud on the trading floor.

Amid the usual questions of ‘How did this happen?’ and ‘How can this keep happening?’ there is a need to review the meaning of fraud in the wider investment banking context. The terms ‘rogue trading’ and ‘unauthorised trading’ are easily bandied about but they warrant explanation.