Kweku Adoboli, the former UBS AG (UBSN) trader on trial over a $2.3 billion loss, was encouraged by superiors to exceed risk limits as he made record profits from unauthorized trades, his lawyer said.
Adoboli, 32, shared the process he used for such trades with his teammates and bosses on the exchange-traded funds desk, showing he didn’t think it was dishonest, his lawyer Charles Sherrard told a London jury in closing arguments today.
“You can’t make $6 million profit in one day by not being massively in excess of risk limits,” Sherrard said. “In the end, did he lose control and miscalculate? Yes, he did. He got it wrong and he apologized.”
Adoboli, originally from Ghana, is accused of fraud and false accounting for the $2.3 billion trading loss. Prosecutors say he hid the risk of his trades by booking fake hedges at the Swiss bank and then hiding profit to cover future losses before market fluctuations made his positions untenable.
Prosecutors are “trying desperately to paint this man as a rogue trader” who worked alone, like Jerome Kerviel, the former Societe Generale SA trader convicted over a 4.9 billion-euro ($6.23 billion) loss, Sherrard said. The bank ignored evidence that others, particularly Adoboli colleague John Hughes, participated in the trading to blame Adoboli alone, Sherrard said.
“The minute you see it’s the whole desk working as a team,” the prosecution falls apart, Sherrard said. “That’s why they’re so anxious to protect John Hughes.”
Sherrard said Adoboli initially lied to protect Hughes and the other traders on the desk. The other men, who deny involvement, have “amnesia,” Sherrard said.
Hughes testified for the prosecution and cried on the stand when he read a Sept. 14, 2011, e-mail in which Adoboli told his bosses about the trades and took full responsibility.
Sherrard also read excerpts from internal reviews and descriptions of Adoboli before the scandal erupted, including a comment that “too many people take his good nature for granted” and that he works too hard.
Adoboli is also being wrongfully blamed for the bank’s layoffs and poor reputation, as well as a drop in the bank’s shares after the loss that quickly recovered, Sherrard said.
“He has had to bear the brunt of the problems at UBS,” Sherrard said. The prosecution made false claims about Adoboli because it “can’t get around the evidence.”
Prosecutor Sasha Wass ended her closing argument today by saying Adoboli is arrogant, reckless and dishonest. She said he lied to his colleagues to cover his crime, and then lied in the trial using “long-winded, convoluted answers” to explain himself.
“We invite you to see through those lies and convict Mr. Adoboli,” Wass said to the jury as Adoboli shook his head back and forth.
Wass compared his actions to those of shoplifters, pedophiles and rapists who admit their crimes and then blame their victims.
“Isn’t that just a little bit much?” Sherrard said to the jury, referring to Wass’s comparison to rape.
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