UBS Fraud: ‘Rogue Trader’ Blames Company’s Pressurization and Intimidation

Kweku Adoboli
Kweku Adoboli is accused of costing the bank billions

Ghanaian-born UBS ex-trader Kweku Adoboli has taken the stand in his own defence in London, telling the court that his intentions were not dishonest, but that management pressurized traders to increase profits.

Accused of causing the banking group $2.3 billion in losses through fraudulent trading activities spanning three years of his employment on the UBS Exchange Traded Funds (ETFs) desk, Adoboli faces four counts – two charges of fraud, and two of falsified accounting.  He denies all the charges, and this week takes the stand in his own defence.

Compared by prosecutor Sasha Wass to infamous Societe General trader Jerome Kerviel – who was convicted in 2008 of causing $6.35 billion losses – Adoboli denied that he acted with dishonest or criminal intentions, but pointed to the pressure placed on traders to increase profits even in spite of internal policy or regulations.

He tentatively accepted the comparison by the prosecutor, specifying: “I experienced the same thing…Not because I’m a rogue trader, not because I’m a fraudster, not because I’m a criminal, but because I went in pursuit of the goals set by the organization and the only way we could reach those goals was by ignoring warnings from management.”

Adoboli added: “In pursuit of the profits that our leadership were asking us to pursue, we had to increase our risk…Now it may have been unhedged, it doesn’t mean it was unresearched.”

In support of his claim of undue pressure, Adoboli argued that many members of the company knew about the trades taking place on the ETF desk, but no one raised any questions until after the losses had been revealed and people started to point the finger.  Indeed, colleagues from within UBS have previously in the trial admitted to knowing of the risk-taking and  “breaks” apparent in the desk’s accounts, but no alarm was raised until after the $ 2.3 billion loss was identified.

Adoboli told the court: “It is a long list of people who only asked questions after our trading methodologies were loss-making.”

However, prosecutor Wass derided his explanations, announcing: “You played God with the bank…Your motivation, Mr. Adoboli, was all about you, your reputation, your ego, your desire to be a star trader.”

With eleven representatives of the banking giant present in court during trials, passing notes to the representing lawyers, Adoboli claims he is the victim of an unbalanced trial.  He alleges that witnesses have been too much intimidated to take the stand against UBS, leaving him to fight the bank alone – an impossible task given the resources they have.

“People have been in touch and said we’d like to help you but we can’t…Across the industry, there is no one who’s been willing to stand up to the machine,” Adoboli said.

If found guilty, the Ghanaian may face up to ten years imprisonment.