Kweku Adoboli, the UBS AG trader accused of making unauthorized transactions that cost the Swiss bank as much as $2.3 billion, pleaded not guilty to two counts of fraud and two counts of false accounting in a London court on Monday.
British authorities arrested Mr. Adoboli in connection with allegations of rogue trading in mid-September but the trader entered a plea for the first time only on Monday. The 31-year-old trader had more than once requested additional time to evaluate the evidence and obtain legal advice before deciding on a plea.
In a statement last September, UBS attributed the multibillion dollar loss to "unauthorized speculative trading in various S&P 500, DAX, and EuroStoxx index futures over the last three months." The bank said the transactions were carried out by a trader on its Global Synthetic Equities desk in London. At the time, people familiar with the matter identified that trader as Mr. Adoboli.
Though UBS said that the rogue trades occurred in the months immediately before Mr. Adoboli's arrest in September, U.K. prosecutors have charged the trader with crimes stretching as far back as 2008.
In a hearing last autumn, Mr. Adoboli said through his lawyer that he was "sorry beyond words." On Monday, the trader appeared in a gray suit and blue tie, speaking only to confirm his name and his not-guilty plea on each of the four counts.
The scandal over the alleged rogue trading has rocked the Swiss bank in recent months, leading to the resignation last September of UBS chief executive Oswald Grübel and a joint investigation by British and Swiss financial regulators.
Though that joint investigation was initially seen as more of a fact-finding mission to determine what went wrong, people familiar with the situation told The Wall Street Journal this week that the regulators are now likely to penalize UBS for gaps in oversight that permitted the alleged rogue trading.
The U.K. Financial Services Authority and the Swiss Financial Market Supervisory Authority, or Finma, are likely to soon complete the investigation but it could take longer for the regulators to bring any enforcement action.
Mr. Adoboli, who grew up in Ghana and attended a private boarding school in Britain, is the son of a United Nations official and a graduate of the University of Nottingham. He began working at UBS in London after graduating from university, working his way up to a position on the company's London equities desk from a back-office job.
Monday's plea hearing comes about a month after Mr. Adoboli dropped his lawyer from the London law firm Kingsley Napley and switched to an attorney from another London law firm, Bark & Co., which specializes in matters related to fraud.
The judge at London's Southwark Crown Court said Mr. Adoboli's trial would begin Sept. 3.
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