Published October 29, 2012
LONDON – Ex-trader Kweku Adoboli said on Monday that others at UBS , including senior executive Carsten Kengeter, had influenced his trading in the summer of 2011, when he took positions that eventually cost the Swiss bank $2.3 billion.
Adoboli told his fraud trial that colleagues had pressured him into changing his view from bearish to bullish at the start of July 2011, a switch that led him to make huge losses.
"The reality is that the trades that were done over the summer period were the result of the intervention of a lot of people around me," Adoboli told the jury at Southwark Crown Court.
"My market view in July and August was guided, sometimes under considerable pressure, by senior traders around me," he said.
The 32-year-old British-educated Ghanaian was arrested on September 15, 2011. He has pleaded not guilty to two counts of fraud and four of false accounting.
The prosecution say Adoboli traded far in excess of his risk limits, concealed his positions by making fictitious bookings into the accounts, and lied to colleagues about the true state of his trading.
He says his goal was always to generate profits for the bank and that he worked extremely hard to achieve that. Fellow traders on the Exchange Traded Funds (ETFs) desk knew exactly how he worked, as did some traders on other desks, he says.
Standing in the witness box on Monday, Adoboli said that in May and June of 2011 his market view had been bearish but his colleagues had pressured him into adopting a bullish outlook.
He said that weeks of discussions amongst the traders had culminated in his ETFs desk colleague John Hughes sending a caricature of Adoboli as a bear to a large group of people.
"At that stage I broke. I just broke," Adoboli told the court.
These events prompted him to flip his position from short to long on July 1 but the market then crashed and his position became loss-making.
"It sold off 30 percent from peak to trough and I held it all the way down because of the intervention of those around me," Adoboli said.
"I wish I was a rogue trader. I wish I hadn't listened. I wouldn't be here today," he said, arguing that if he had stuck to his short position he would have made profits not losses and would never have got into trouble.
Among those who influenced his thinking during that period, he said, was Kengeter, then the chief executive officer of UBS's investment banking arm.
Adoboli said Kengeter had visited the ETFs desk on July 12, recalling that they had talked about their views of the world.
Kengeter had relayed to Adoboli a conversation with Axel Weber, who had recently stepped down from the European Central Bank and was joining UBS, he said.
"He (Kengeter) had acquired the view (from the Weber conversation) that the market was going to rally. It is churlish of a relatively junior trader to ignore the word of the global head of the whole investment bank," Adoboli told the court.
The trial continues.
(Editing by Andrew Osborn)