Monthly Archives: October 2015

Kweku Adoboli’s Future Career In Music Promotion?

I mentioned earlier Kweku Adoboli’s recent podcast interview with Lindsay Fortado of the FT, and listening to it has convinced me that, though his career as a trader may be over, perhaps he has a future in music promotion.

Let me explain.

Adoboli is the UBS rogue trader who was brought up on criminal charges in the UK stemming from unauthorized trading that first came to light in September 2011. He served about four years in prison and was recently released.

Adoboli was a trader on UBS’s four person ETF desk.  According to Adoboli, he began off-books trading in 2008 using an account nicknamed “umbrella,” which he used as a slush fund to hide profits until he needed them to cover a loss on some later, rainier, day.  As I’ve discussed, such smoothing of profits and losses is a common element in other recent rogue trading cases, including Jerome Kerviel at Société Générale.

As I said at the time:

The umbrella account is the one element of the case that has finally convinced me of the possibility of an Adoboli made-for-television movie (note to networks: I’m willing to consult on the cheap in exchange for hobnobbing with movie stars . . . or just for free lodging).  I think that we’re due for another rogue trading movie.  Though Nick Leeson got a real (not TV) movie out of his ordeal — starring Ewan McGregor, no less — it was a real dud, which hasn’t prevented me from showing it in class about a dozen times.

The umbrella account turned out to be an important element of Adoboli’s defense.  Adoboli’s lawyer, Charles Sherrard argued that all three ETF desk traders, including Adoboli’s supervisor, John Hughes, knew about the umbrella account.  Sherrard introduced numerous email and chat communications referencing Adoboli’s “umbrella,” “Rhianna,” and “ella ella,” in an attempt to establish that Adoboli, far from being a rogue agent, was part of a collaborative scheme in which other bank employees (again, including his direct supervisor) acquiesced.

Fortado asks Adoboli about the account in the podcast (“you had an internal fund that you created for the ETF desk, called the ‘umbrella’ or ‘Rihanna’ which was discussed at trial”) and Adoboli repeats his position that others (“many others”) at UBS knew about the trading scheme and either approved, directly participated, or turned a blind eye to it, because it was profitable.

Adoboli is the only rogue trader that ever gave me an excuse to show part of a Rihanna video at an international conference.

And now, he’s provided another music recommendation. At the end of the podcast, Fortado tells Adoboli that she knows he loves music and asks whether there is a song that is indicative of the way that he felt during the ordeal. His new theme song? Caught in the Hustle, by Immortal Technique:

So if I should ever fall and get caught in a hustle
Let them know that I died while I fought in a struggle
From the hoodrats to the rich kids lost in a bubble
Spray painting on the streets and at the subway tunnels
Write it down and remember that we never gave in
The mind of a child is where the revolution begins
So if the solution has never been to look in yourself
How is it that you expect to find it anywhere else

Well, there’s that then.

I have some thoughts on the interview itself, which I’ll try to return with, schedule permitting.

Related posts:

Kweku Adoboli Speaks!
Ella . . . Ella
AMV Seminario De Control Interno Y Compliance: Bogotá, Colombia
Kweku Adoboli Trial Began Today
The Rogue Trading KISS
When $61bn Seemed Like Real Money
Denial: It Ain’t Just A River In Egypt
It’s The Stupid Culture
It’s The Culture, Stupid
Kerviel’s Fake Trades: Genius Or Copy Cat?
Kerviel’s Fake Trades: The Anatomy of A Cover-Up
On Warning Signs II: Follow The Money
On Warning Signs: You Can’t Get There From Here
Rogues Versus Scapegoats
Kerviel Trial Opens to Fanfare
Société Générale: Back In The Saddle Again
Jérôme Kerviel to Société Générale: Stand By Your Man

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Kweku Adoboli Speaks!

f43adb48-4640-433e-884c-ee4e750195cd.imgWith Lindsay Fortado of the FT, that is.

Adoboli, who just finished a four-year prison term in connection with his loss of $2.3 billion through unauthorized trades while employed at UBS gives a podcast interview with the FT, in which he discusses his life, his work, his rogue trading, and subsequent trial.

The nine-week trial generated substantial public attention, and I blogged about it on a few occasions, which are linked below.

I’ll try to check back in with some thoughts about the interview, but for now, wanted to alert readers to the podcast.

http://podcast.ft.com/2015/10/22/the-crime-and-punishment-of-kweku-adoboli/

Related posts:

Ella . . . Ella

AMV Seminario De Control Interno Y Compliance: Bogotá, Colombia

Kweku Adoboli Trial Began Today

The Rogue Trading KISS

When $61bn Seemed Like Real Money

Denial: It Ain’t Just A River In Egypt

It’s The Stupid Culture

It’s The Culture, Stupid

Kerviel’s Fake Trades: Genius Or Copy Cat?

Kerviel’s Fake Trades: The Anatomy of A Cover-Up

On Warning Signs II: Follow The Money

On Warning Signs: You Can’t Get There From Here

Rogues Versus Scapegoats

Kerviel Trial Opens to Fanfare

Société Générale: Back In The Saddle Again

Jérôme Kerviel to Société Générale: Stand By Your Man

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The NY Times Weighs In On Egg Donor Price Fixing

21wed2-blog427And gets it right.

As I mentioned a few days ago, the NY Times recently published a much-read piece about Kamakahi v. ASRM, the egg donor class action that accuses the American Society for Reproductive Medicine with illegally capping compensation to oocyte donors in violation of US antitrust law. Today, they followed up with an editorial that, perhaps amazingly, given the heated rhetoric surrounding the case, correctly sides with the egg donors in the litigation.

From the editorial board’s letter:

Guidelines issued by the American Society for Reproductive Medicine and the Society for Assisted Reproductive Technology suggest that paying a woman more than $10,000 for her eggs is “beyond what is appropriate” and even paying $5,000 or more requires “justification.”

A vast majority of the nation’s fertility clinics follow these guidelines. The stated rationale behind them is to avoid offering so much money that donors, especially those who are often young and poor, will rush to contribute their eggs without considering the risks.

This payment system is unfair. However well-intentioned, it favors the fertility clinics. . . . Meanwhile, it shortchanges the egg donors, whose wishes are ignored in the equation. And if there are indeed risks, they can be addressed and mitigated by the clinics and the doctors, who can strengthen their screening and counseling procedures and provide more information.

Yep.

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A Cost-Benefit Analysis of Government Compensation of Kidney Donors

left Friends Philip Held and Frank McCormick (together with A. Ojo and J.P. Roberts) have just published A Cost-Benefit Analysis of Government Compensation of Kidney Donors in the latest issue of the American Journal of Transplantation. Here is the abstract:

From 5000 to 10 000 kidney patients die prematurely in the United States each year, and cost_benefit_analysisabout 100 000 more suffer the debilitating effects of dialysis, because of a shortage of transplant kidneys. To reduce this shortage, many advocate having the government compensate kidney donors. This paper presents a comprehensive cost-benefit analysis of such a change. It considers not only the substantial savings to society because kidney recipients would no longer need expensive dialysis treatments—$1.45 million per kidney recipient—but also estimates the monetary value of the longer and healthier lives that kidney recipients enjoy—about $1.3 million per recipient. These numbers dwarf the proposed $45 000-per-kidney compensation that might be needed to end the kidney shortage and eliminate the kidney transplant waiting list. From the viewpoint of society, the net benefit from saving thousands of lives each year and reducing the suffering of 100 000 more receiving dialysis would be about $46 billion per year, with the benefits exceeding the costs by a factor of 3. In addition, it would save taxpayers about $12 billion each year.

And from the accompanying press release:

In a just published paper, a team of researchers propose that the government compensate kidney donors to increase the supply of transplant kidneys, and they show the benefits of such a policy would greatly exceed its costs. Poor people in particular, they find, would enjoy the greatest net benefit, refuting the common allegation that compensation of donors would somehow “exploit” the poor. The proposal would also save a substantial amount of money for taxpayers, which should increase its political appeal. . . .

Given the controversial subject matter of this paper, the authors have appended 12 supplements to explain, justify, and document their key estimates and calculations. The paper — “A Cost-Benefit Analysis of Government Compensation of Kidney Donors” — and the 12 supplements are available online at:

http://onlinelibrary.wiley.com/doi/10.1111/ajt.13490/epdf

 

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If You Want A Market, Have A Market . . . Otherwise

Eggs Donors Cartoon 2By now most readers will have seen the article in Friday’s New York Times discussing Kamakahi v. ASRM, the egg donor price fixing litigation that I’ve blogged about numerous times here. (See links below). I’ll be back later with more to say about the article, but for now wanted to highlight the following quote from Debora Spar, the president of Barnard College and the author of The Baby Business, an excellent book on the assisted reproduction industry. Says Spar:

Our whole system makes no sense . . .We cap the price because of the yuck factor of commodifying human eggs, when we should either say, ‘Egg-selling is bad and we forbid it,’ as some countries do, or ‘Egg-selling is O.K., and the horse is out of the barn, but we’re going to regulate the market for safety.’

I couldn’t agree more and make a similar point in a recent piece in the Journal of Applied Philosophy (the published piece is gated, but you can access an earlier draft here):

ASRM and SART also defend the compensation guidelines on the grounds that they prevent the undue influence and exploitation of egg donors. . . .

It is worth noting at the outset that many countries ban payments to egg donors entirely, due precisely to concerns such as these. Regardless of one’s views on the ultimate wisdom of such bans, they do possess a certain logic — if the lure of payment will cause women to donate who otherwise would not, then one possible solution is to ban payments. An attempt to address inducement concerns through price caps, however, is an entirely different matter.

Happy reading!

Related posts: 

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