Published October 26, 2012
Former UBS trader Kweku Adoboli wept on Friday as he told a jury that his "off-book trades" were done for the benefit of a bank that meant everything to him.
Addressing the court for the first time since his trial started six weeks ago, Adoboli said he believed his behaviour was not fraudulent and he had worked incredibly hard for years to generate profits.
"UBS was my family and every single thing I did, every single bit of effort I put into that organisation, was for the benefit of the bank," said Adoboli, his voice breaking as he wept and thumped the witness box with his hand.
"That is everything I lived for ... To find yourself in Wandsworth Prison for nine months because all you did was worked so hard for this bank," he said through tears.
The 32-year-old British-educated Ghanaian was arrested on Sept. 15, 2011, and blamed for losses of $2.3 billion. He was in custody until he was granted bail in June 2012.
He has pleaded not guilty to two counts of fraud and four of false accounting, covering the period between October 2008 and September 2011.
The prosecution say Adoboli traded far in excess of his authorised risk limits, concealed his unhedged positions by booking fictitious hedges, and lied to the back office when asked questions about his accounts.
Adoboli told the court that he had begun making what he called "off-book trades" in late 2008 after realising that the Exchange Traded Funds (ETFs) desk where he worked faced mounting costs that would reduce any profits it could make.
Asked about his so-called trading "umbrella", which has been the subject of intense scrutiny during the trial, Adoboli described it as an accounting mechanism that had an legitimate purpose.
He said it consisted of holding some trades off-book for a period of time to try to generate a profit. Then those profits would be leaked back into the profit and loss account to offset costs incurred by the ETFs desk such as funding costs.
"The umbrella was one of the mechanisms we used. Ultimately everybody knew about it," he said, becoming passionate as he explained that it took a lot of hard work to generate the profits kept in the umbrella.
Adoboli described the ETFs desk as over-stretched and under-resourced. He referred to himself and John Hughes, the only two traders on the desk initially, as "babies" and "kids" dealing with a "massive" book.
He said that everything he did was to "make this book work".
The courtroom was packed as Adoboli entered the witness box, wearing a dark suit and dark red tie. Most of the time he appeared confident, speaking loudly and clearly as he answered questions from his lawyer.
But on several occasions Adoboli became emotional.
He cried when his lawyer mentioned that his father had come from Ghana and been present in the courtroom throughout the long-running trial.
He cried again when talking about Mike Foster, who was in charge of the ETFs desk when Adoboli joined it in 2006 and later left UBS. Foster has been sitting next to Adoboli and advising him and his lawyers for free throughout the trial.
"He wanted to make sure we could build something we could all be proud of," Adoboli said, his voice choked with emotion, after a long pause during which tears welled up and he was unable to speak.
Describing how hard he had worked during the financial crisis in 2008, when he said he had feared for the survival of UBS, Adoboli cried again as he recalled that he had missed his grandmother's funeral because of work commitments.
Prosecutors have portrayed Adoboli as a greedy, out-of-control rogue trader who recklessly gambled away UBS's money because he wanted to be a star of the trading floor and earn bigger bonuses.
He said he had felt great loyalty towards UBS, where he worked as an intern during his last summer as a university student in 2002 and then started as a graduate trainee in 2003. He spoke of pride and a sense of belonging and of the respect and friendship he felt for many of his colleagues.
He said he had learned early in life a sense of responsibility as he was oldest child and only son of a Ghanian U.N. official who was often away on business, leaving him to "look after" his mother and three sisters.
He grew up in Ghana, Israel and Syria, and from a young age had acquired an early understanding of geopolitics, while his education at a Quaker boarding school in northern England had taught him "a lot of great values" about community, he said.
The trial continues.