The importance of critical thinking
In October 2016 CFA UK Ethics Committee hosted an interview with Kweku Adoboli - the UBS trader was sentenced to seven years in prison after taking responsibility for losses of 2.3 billion US dollars incurred by UBS in 2011.
Acting ethically is a deliberate decision that requires critical thinking. It may not always be an instinctive reaction. It involves careful thought, and is in many ways a skill that must be learned. It can be easy to follow others, or keep doing what we are doing because it 'works'. However, one must never forget to think about the consequences if things go wrong.
Lessons learnt
Watch the following extract from the event where Kweku shares his thoughts on the critical importance for our industry of learning lessons from the past.
Timeline of events
- 2002: Joined UBS as a summer intern.
- 2006: Became an ETF trader.
- 2008: Started to exceed risk limit by making trades appear hedged when they were not.
- 2010: Promoted to director.
- July 2011: Trades start going wrong during Eurozone debt crisis. Losses start spiralling out of control (ultimately 2.3 billion US dollars).
- August 2011: UBS start investigating trade discrepancies.
- 14 September 2011: Sent email to UBS admitting booking false trades.
- 15 September 2011: Arrested and charged.
- 20 November 2012: Found guilty of fraud and sentenced to 7 years in prison.
- June 2015: Released from prison.
Why we held the event
CFA charterholders and CFA UK members respect and promote ethical behaviour in the investment management industry. All CFA Charterholders make a public commitment to upholding professionalism. CFA UK’s Ethics Committee believes that it is important that ethics training doesn’t just take the form of hearing the theory of ‘how to get it right.’ We must look back at the situations and conditions that applied in each case of wrong-doing, to see what lessons can be learned.
