London police charged Kweku Adoboli, a 31-year-old UBS trader, with fraud on Friday, as the story unfolds on how UBS lost $2 billion from unauthorized trades.  Mr. Adoboli was charged with fraud and false accounting, going back to October 2008, and included falsifying records of ETF transactions with a view to personal gain.  He also was charged with false accounting for falsifying records from January 2010 to September 14. The third charge, abuse of position – also from January 2010 to September 14, 2011 — states that as a senior trader of the global synthetic equities, Mr Adoboli acted against the interests of UBS and "dishonestly abused that position," aiming to make a personal gain. Kweku Adoboli. Adoboli, the son of a retired United Nations employee from Ghana, attended school and university in Britain and joined UBS in 2006, just 3 years after graduating.  He spoke only to confirm his name and address and will be held until 9/22/11 when he's scheduled to appear again in the same court.  Regulators report that, on Thursday, UBS fired Mr. Adoboli, who lives in Bethnal Green, London. Mr. Adoboli was represented in the courtroom by Louise Hodges of the law firm of Kingsley Napley.  Ms. Hodges spoke in court only to confirm that her client would not be making an application for bail at this stage, and she declined to comment further to reporters at the court.  Kingsley Napley previously represented Nicholas Leeson, the trader whose $1 billion in unauthorized losses at Barings caused the 1995 collapse of the bank. The presiding magistrate, Carloyn Wagstaff, agreed that Mr. Adoboli should be kept in custody and appear again at the same court on Thursday for a formal bail hearing.  His committal hearing — when a magistrate decides whether there is enough evidence for the case to go to trial — was scheduled for 10/28/11. A Bank in Turmoil. Once again, UBS was in turmoil as ratings agencies pointed to lax risk management as a reason for downgrading the bank.  Back in 2009, when he took over CEO, Oswald Grübel pledged to improve the glaring weaknesses and deficiencies.  [C-I Note: Perhaps he was only addressing prospective issues and not those that began before he started on his watch.] What has surprised many is that the activities began as early as 2008, which would indicate that there was a "systematic pattern of trading."  Lindsay Thomas, MD at risk management consultancy Sustainable Risks and a former director at Britain’s financial regulator notes that, “If you hide it that long, the only the only way is to hide it in fake client positions." Traders in Europe also were scratching their heads, wondering how Adoboli could amass such a large trading loss having worked in a relatively plain-vanilla version of a complex derivatives trading business known as the Delta One desk.  "He must have worked with leverage or futures, otherwise it’s almost impossible to make such a big loss," said one trader in London who did not want to be named because he did not want to be connected to the case. Financial Services Authority to Begin Investigation. The FSA, Britain’s equivalent of the SEC, along with Swiss market regulators said Friday they'd begin an independent investigation into the bank’s "control failures" - focusing on the details of the unauthorized trading, on the bank’s control failures and the strength of the bank’s existing controls to prevent fraudulent trading in the investment banking operation. For further details, go to [Dealbook, 9/16/11] and [Reuters, 9/16].