A British prosecutor accused former UBS trader Kweku Adoboli on Friday of fraudulently gambling away $2.3 billion (1.4 billion pounds), believing he had the magic touch but instead causing "chaos and disaster to himself and to all those around him".
Adoboli, 32, is on trial at Southwark Crown Court accused of two counts of fraud and two counts of false accounting. He has pleaded not guilty.
Opening the prosecution case a year almost to the day since the then trader was arrested at UBS's London offices in the middle of the night, counsel Sasha Wass said: "Mr Adoboli had ceased to act as a professional investment banker and had begun to approach his work as a naked gambler. He had become what is sometimes referred to as a rogue trader."
"Adoboli's motive for this behaviour was to increase his bonus, his status within the bank, his job prospects and his ego," Wass said.
"He did this by exceeding his trading limits, by inventing fictitious deals to conceal this and then he lied to his bosses," she told the jury.
Wass said his fraudulent deals had wiped 10 percent, or about $4.5 billion, off the Swiss bank's share price.
At one stage he risked losing nearly $12 billion in unhedged investments. "He had been sucked into the gambler's mindset and he started throwing good money after bad," she said. "He was putting the very existence of the bank at risk."
UBS is not a party to the criminal trial, expected to last eight weeks, but its Chief Executive Sergio Ermotti warned staff last week that the bank's culture and practices were likely to come under scrutiny.
Wearing a grey suit and a purple tie, Adoboli sat on a bench alongside his lawyers at the back of the courtroom. He did not sit in the glass dock because judge Brian Keith allowed him to sit near his lawyers so they could speak and consult documents throughout the case.
The scene in court could not have been more different from a fast-paced trading desk full of men in sharp suits, computers showing live data streams and telephones buzzing.
Following British legal tradition the judge and lawyers wore white wigs and long robes. Telephones, cameras and recording devices were not allowed, and evidence was contained in huge piles of old-fashioned lever-arch files bulging with paperwork.
Adoboli was arrested on September 15, 2011, the day when UBS announced that it had uncovered what it called "unauthorised trading" at its investment banking arm. He remained in custody until June 8, when he was freed on bail.
The episode knocked back UBS in its efforts to recover from near collapse during the 2008 financial crisis. It led to a management shake-up, a change of strategy, a tightening of internal controls and a reduced 2011 bonus round for some staff.
Adoboli's trial will be watched with keen interest by a banking sector scarred by years of bad publicity since the financial crisis began and wary of giving regulators more reasons to tighten rules governing the industry.
The British and Swiss financial regulators, the FSA and FINMA, said on February 3 they were launching enforcement investigations into events at UBS. These are still going on.
Such investigations have sometimes resulted in fines and new regulatory requirements on banks.
Adoboli is the son of a retired United Nations diplomat from Ghana. He was educated in Britain, graduating from Nottingham University with a degree in e-commerce and digital business studies.
At the time of the alleged offences, he was working as a trader on the Exchange Traded Funds (ETFs) desk in London.
ETFs are financial instruments that allow holders to track indices rather than buying the underlying securities outright. They are a way for investors to gain exposure to markets that are illiquid or hard to access.
(Editing by David Stamp)