Continued from page 1

“He was very nice, very polite,” Octave said. He said Adoboli was untidy and had fallen behind on the rent on two occasions but paid up after some prodding. He said there were no problems with Adoboli’s references.

The rent was a hefty 4,000 pounds per month, or about $6,300. Once downtrodden, Adoboli’s neighborhood has become popular with traders who can walk to work. It is popular with tourists because of its antique shops and vintage clothing stores.

The apartment, which Adoboli left four months ago, was in a handsome three-story brick building near London’s storied Brick Lane — a busy street of curry houses, bars and boutiques a few blocks from UBS’s modernist U.K. headquarters.

Adoboli traveled often to France and the United States, had been dating a nurse for at least a year and enjoyed the neighborhood bars, Octave said. The University of Nottingham said he graduated in 2003 with a degree in e-commerce and digital business.

Adoboli’s profile on Facebook showed a smiling black-and-white photograph and listed his interests as photography, cycling and boutique wines. The profile was taken down hours after his arrest.

UBS is struggling to restore its reputation after heavy losses from subprime mortgages and an embarrassing U.S. tax evasion case that blew a hole in Switzerland’s storied tradition of banking secrecy. UBS took a $60 billion bailout from the Swiss government in 2008.

The bank already planned to cut 3,500 jobs over two years, and the $2 billion loss is likely to further anger shareholders. Its stock closed 11 percent lower in Zurich on Thursday. In the United States, it trades at about one-sixth what it did in 2007.

UBS said the trading was under investigation and no client money was involved.

Peter Thorne, a London equities analyst at Helvea, said the loss was manageable for UBS but a blow to its reputation and management. He said it would probably add to calls for UBS to cut back its investment banking unit.

Banking industry observers immediately highlighted similarities to the Kerviel case, which also involved a young trader entrusted with vast sums of money.

Kerviel, who traded at Societe Generale, France’s second-largest bank, was convicted in October 2010 of covering up bets worth almost $68 billion in all, with losses of $6.7 billion.

He was ordered to pay the bank back all the money he had lost and was banned for life from the financial industry. Kerviel has appealed the verdict.

Leeson lost $1.38 billion, or about $2 billion in today’s dollars, betting on Asian futures markets for Barings bank until he was discovered in 1995. The bank, which had been in business for more than 230 years, collapsed.

By coincidence, the Swiss parliament began a long-slated debate on the future of the country’s banking industry Thursday.

Lawmakers are being asked to consider proposals to assure that Switzerland’s two biggest banks, UBS and Credit Suisse Group, are brought under tighter control. Some lawmakers want the banks split up to make sure they are not “too big to fail” — so massive that they would wreak enormous damage on the economy if they went under.

Story Continues →