Simon Taylor and Christophe Bertrand, the two former junior traders on UBS AG (UBSN)’s exchange-traded funds desk in London, said they didn’t attend a secret meeting with their co-worker Kweku Adoboli last year to decide who should take the blame for mounting losses from unauthorized trades.
Bertrand, testifying today at Adoboli’s London trial, and Taylor, who was questioned yesterday, both denied meeting Adoboli and another trader on Sept. 12, 2011, at an All Bar One restaurant near the bank’s London office. Adoboli’s lawyer said the meeting was to discuss whether Adoboli would take the blame alone, or if they should do so together.
“The four of you had a discussion in All Bar One because Mr. Adoboli said the losses had gotten to such a point he was going to tell them about the losses and the umbrella,” Adoboli lawyer Charles Sherrard said to Bertrand today, referring to a secret account allegedly used by the team. “The three of you decided to let him do that to save your own skins.”
Bertrand, who now lives in France, said he disagreed. Sherrard asked him why he had left the office with the others for 50 minutes and then returned to work until 7 p.m.
“I believe at the time I was training for a marathon -- maybe I went for a run,” Bertrand testified.
Adoboli, 32, was charged with fraud and false accounting in relation to unauthorized trades on which Zurich-based UBS lost $2.3 billion. He has pleaded not guilty. Sherrard has sought to show his client wasn’t acting alone and that the bank encouraged traders to take risk and exceed trading limits.
Sherrard showed Taylor and Bertrand print-outs of the entry and exit records of UBS’s London office indicating they and Adoboli left after the financial markets closed on the day of the alleged meeting and returned together about an hour later. Taylor said he didn’t remember what he did in that period, and may have returned with Adoboli because he “bumped into him” outside.
“You have feigned memory loss about this whole period,” Sherrard said to Taylor yesterday.
John Hughes, another former trader, also denied attending the meeting at the bar during testimony this week.
Two days after the alleged meeting, Adoboli sent an e-mail to management admitting he faked counterparties for trades -- a message Taylor requested not mention his name, Sherrard said.
Taylor told the jury previously that while he was aware of the secret account, which Adoboli dubbed “the umbrella,” he wasn’t aware of its risk to the bank until after Adoboli sent the e-mail. Bertrand, who joined the ETF desk in June 2010, said Adoboli told him about the umbrella in early 2011, describing it as a way to cover “future losses and dividends.”
Bertrand admitted to altering the settlement date in one of Adoboli’s trades while he was on vacation in June last year after the bank’s trade-support unit questioned it. He denied any knowledge of fictitious trading.
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