Former Rogue UBS Trader Kweku Adoboli Loses Deportation Appeal

14 10 2015

In comparison to Tom Hayes (who got 14 years’ imprisonment and is appealing his sentence and conviction) and others being prosecuted for benchmark rigging, it is arguably quite scandalous that UBS rogue trader Kweku Adoboli (who was convicted of two counts of fraud and sentenced to seven years’ imprisonment) was released from prison after spending just a bit over three years behind bars for losing $2.5 billion in unauthorised trading. Ghana-born Adoboli – who travelled the world as a child – is said to be the son of a United Nations official/diplomat. Because of his misconduct, the Financial Conduct Authority (FCA) understandably wishes to ban Adoboli, who reckoned he had a “magic touch”, from being a regulated person in financial services. But now it has emerged that Adoboli was notified of his liability to deportation and has lost his appeal in relation to the decision to deport him from the UK. The 35-year old Ghanaian national, who has resided in the UK for 23 years but never got around to obtaining British nationality, was released from prison in June 2015 and reportedly found the immigration tribunal’s decision upholding his deportation to be “heartbreaking”. His rogue trading wiped off £2.7 billion ($4.5 billion) from UBS’s share price.

The media suggests that the former public school head boy and University of Nottingham graduate – holding a degree in e-commerce and digital business studies – plans to appeal the tribunal’s decision. It has been reported that the home office only seeks to deport individuals whose sentence is longer than four years (Immigration Rules, Part 13, Deportation and Article 8, para 398(a)) unless they are able to demonstrate otherwise. (A sentence of four years’ imprisonment or more means the person is a serious criminal and “very compelling circumstances” is an extremely high threshold. As a general principle, the greater the public interest in deporting the foreign criminal, the more compelling the foreign criminal’s circumstances must be in order to outweigh it.) However, under para 398(b) the deportation of a person from the UK is conducive to the public good and in the public interest where they have been convicted of an offence for which they have been sentenced to a period of imprisonment of less than four years but at least 12 months. It is common knowledge that anyone who has been convicted of an offence exceeding 12 months’ imprisonment is caught by “automatic deportation” because after the foreign national prisoners crisis the government legislated in the form of the UK Borders Act 2007 to close the “institutional blind spot” represented by the authorities’ negligence in releasing foreign criminals (who had served prison terms) into the community without considering them for deportation.

The relevant provisions of the Act were brought into force on 1 August 2008 by the UK Borders Act 2007 (Commencement No. 3 and Transitional Provisions) Order 2008. They apply to all convicted persons who are not British citizens, whether they are citizens of the EU or not.

Adoboli’s arrogance did not serve him well during his criminal trial and the court remarked that he was a rogue trader who disregarded the rules for trading. UBS was fined £30 million for lack of adequate oversight mechanisms, control and supervision – shortcomings that allowed the largest loss for unauthorised trading to precipitate without its signs showing up on the Swiss lender’s radar.

In Seven Deadly Sins: ‘Retrospectivity, Culpability and Responsibility’ my friend Professor Roger McCormick (tweeting as @ConductCosts see also the Conduct Costs Project) expertly classifies Adoboli’s misconduct as “Individual Criminality”, or a “Case 5 event”, which is where there is clear evidence that a crime has been committed by a bank employee and the culprit (usually acting alone) is identified. Insider trading and the “rogue trader” are classic examples of Case 5 events.

Although Adoboli thinks that his nationality has nothing to do with his offence the plain sad truth for him is that his actions were such that deportation to Ghana is very much on the cards for him. People have been deported for doing much less but, with two decades of UK residence under his belt, Adoboli does have a good claim under Article 8 of the European Convention on Human Rights (ECHR), i.e. his right to a private and family life.

A foreign criminal is by section 32 of the 2007 Act any person who has received a sentence of imprisonment of at least 12 months after 1 August 2008 or is in custody pursuant to such a sentence on that date and had not been served with a notice of deportation before then. Moreover, section 32(4) and (5) provide that for the purpose of section 3(5)(a) of the Immigration Act 1971, the deportation of a foreign criminal is conducive to the public good and that the home secretary must make a deportation order in respect of a foreign criminal (subject to section 33). So far as is material, under section 33, section 32(4) and (5) do not apply where an exception in this section applies and for example exception 1 is where removal of the foreign criminal in pursuance of the deportation order would breach his ECHR rights or UK’s obligations under the Refugee Convention.

Section 32(2) of the 2007 Act sets out that the automatic deportation provisions apply to those sentenced to a period of imprisonment of at least 12 months and section 38 defines what is meant by “imprisonment”: see section 32(2) and section 38.

A foreign criminal is defined, as set out at section 117D(2) of the Nationality, Immigration and Asylum Act 2002, as a person who is not a British citizen, who has been convicted in the UK of an offence, and who has been sentenced to a period of imprisonment of at least 12 months, or has been convicted of an offence that has caused serious harm, or is a persistent offender.

Pending in the Supreme Court

The deportation system is the subject of constant controversy and some appeals are pending in the Supreme Court on this nebulous but interesting area of law. On 28 July 2015, Lord Kerr, Lord Wilson and Lord Carwath JJSC granted permission to appeal in the following trio of cases:

The Public Interest

Article 8 claims advanced by foreign criminals are considered under paragraphs 398 to 399A of the Immigration Rules and these rather troublesome rules are underpinned by sections 117A to 117D of the Nationality, Immigration and Asylum Act 2002 (as amended by section 19 of the Immigration Act 2014 see here). The provisions came into force 28 July 2014 and:

  • Section 117A sets out how the Article 8 provisions are to be applied.
  • Section 117B sets out Parliament’s view of the public interest in Article 8 claims made by any foreign nationals, including foreign criminals.
  • Section 117C sets out Parliament’s view of the public interest in Article 8 claims made by foreign criminals liable to deportation.
  • Section 117D sets out the interpretation of sections 117A to 117C.

Some notable tribunal cases on these new public interest provisions are:

The Criminal Trial 2012

In fighting the fraud case against him at UBS’s London unit, the Ghanaian argued at trial that managers at Zurich-based UBS pressurised him to take multiple risks and like Tom Hayes he contended that disregarding the rules the bank was widespread. Although Adoboli admitted that he caused the losses, he nevertheless argued that his actions were not dishonest. His application for permission to challenge the conviction was rejected by a panel of three judges at the Court of Appeal in London on 4 June 2014 when Sir Brian Leveson, Patterson J and Sir Richard Henriques decided to throw out his case.

“The case was in truth overwhelming and the applicant can have no complaint,” explained Sir Brian Leveson. Pointing out that all the grounds upon which the application was mounted had been considered with “great care” by the panel, the Court of Appeal concluded that:

We have no doubt that his convictions are unassailable.

Similarly, in his sentencing remarks, Keith J made it extremely clear to Adoboli:

Whatever the verdict of the jury you would forever have been known as the man responsible for the largest trading loss in British banking history.

Your fall from grace as a result of these convictions is spectacular. The fact is you are profoundly unselfconscious of your own failings …

There is a strong streak of the gambler in you. You were arrogant to think the bank’s rules for traders did not apply to you.

During the trial, the judge gave the jury a majority verdict direction, saying they could deliver a 9-1 verdict on the second fraud charge and the four false accounting charges. The jury – which found Adoboli guilty by a majority verdict of fraud but acquitted him of the other charges – had been reduced to five men and five women after two jurors were discharged. Adoboli, who claimed to have lost control over his trades during a period of market turbulence in 2011, informed the jury that his senior managers encouraged him to take risks and were aware of his actions.

Adoboli claimed to have been acting in the bank’s interest, calling his colleagues “family”, but the prosecution attacked him for being a gambler who had misconceptions about his own “magic touch” abilities. He also said that employees at UBS were encouraged to take risks until they got “a slap on the back of the wrist”. Arguing that he had “lost control in the maelstrom of the financial crisis”, he pleaded his case on the basis that he was doing well until he changed his conservative “bearish” position to an aggressive “bullish” stance because of pressure from his senior management.

The role of section 3(6), which has not been repealed, of the Immigration Act 1971 has been reduced in light of the regime created by the 2007 Act and in R v Kluxen [2010] EWCA Crim 1081 analysing the circumstances in which a court should recommend an offender’s deportation, the Court of Appeal (Criminal Division) held that:

  • Subsequent to the coming into force of the 2007 Act, it was generally inappropriate for a court to recommend the deportation of a “foreign criminal” as defined by section 32: para 9.
  • In light of the observation that the “conducive” liability to deportation within the meaning of section 3(5)(a) of the 1971 Act remained available, “it will rarely be appropriate to recommend the deportation of an offender who is not a British citizen, but to whom the 2007 Act does not apply and this is so whether or not offender is a citizen of the EU”: paras 27-28.
  • Thomas LJ, Maddison J and Sir Geoffery Grigson upheld Kluxen’s sentence but dismissed the recommendation to deport her because it should never have been made. However, at para 35, the court wrongly found that she was a Ghanaian national. See my post on an interesting judgment connected to deportation proceedings in Kluxen’s case: she was a poor and elderly woman in a difficult predicament that involved her young grandchildren. So if a high-ranking judicial figure like Sir John Thomas of Cwmgiedd can make a mistake in Kluxen’s case, then Kweku Adoboli may well have a chance of mounting a successful challenge against the dismissal of his deportation appeal.
  • It will be interesting to see how far Kweku Adoboli’s case will get in the court system and whether he will make it to the Court of Appeal and the Supreme Court? It is hard to see why the son of an African diplomat should be treated any better than the “common criminals” routinely deported by the home office.

Deportation Order and ILR

Adoboli is neither British nor a Union citizen and information in the public domain suggests that he is a settled person with indefinite leave to remain (ILR). If he is loses his immigration appeal then he may apply for the revocation of his deportation order. Notably, under the Supreme Court’s decision in R (George) v Secretary of State for the Home Department [2014] UKSC 28 the revocation of a deportation order does not revive a criminal immigrant’s past ILR. Rather, the home secretary is free to decide afresh what leave to grant: see Deportation Order Terminates ILR.

Where it is decided to abandon deportation action against a foreign national for whatever reason, e.g. removal would breach human rights, consideration must be given to punish the foreign criminal by revoking any ILR.

The appeals regime under the Immigration Act 2014 offloaded appellate rights under the old regime which catered for appeal rights where the home office refused to revoke a person’s deportation order.

Benchmark Rigging Trials

Just to compare Adoboli’s predicament with others caught up in corporate crime – such as the “flash crash” trader Navinder Sarao who is resisting extradition to the US and is accused of “spoofing” and may get sentenced to 380 years’ imprisonment – getting deported to Ghana is probably not that bad an outcome. (It will be interesting to see how far Sarao gets with his extradition appeal? He was luckily able to have it adjourned from September 2015 to January 2016)

I posted on benchmark (LIBOR) rigging, in which UBS remained a core institution, a few days back and soon enough @MChawlaQC followed me on @globalcorplaw

Arguably, such high-flying criminals have no respect for anyone and really should be punished in a full-on kind of way. Why should only the poor suffer under the law?

After all, Adoboli’s actions not only cost other traders their jobs and prompted the CEO’s resignation they also wiped off £2.7 billion ($4.5 billion) from UBS’s share price. It does not look like he got the full treatment for his mischief.


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14 10 2015
Former Rogue UBS Trader Kweku Adoboli Loses Deportation Appeal | United Kingdom Immigration Law Blog

[…] few days back and soon enough @MChawlaQC followed me on @globalcorplaw so I thought I should share my post here to expose the kind of environment people like Adoboli were operating […]

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