Kweku Adoboli, the former UBS AG trader, said after admitting he made unauthorized trades last year he quickly realized his initial story that he had acted alone would fall apart once it was scrutinized.
“There’s a problem with my story that I acted alone -- it just doesn’t hold water,” Adoboli said in a text message to his girlfriend on Sept. 14, 2011, while he was being interviewed by UBS managers. “There are too many minuscule pieces of evidence that will end up ripping the story to pieces.” He was arrested later that day.
Adoboli, originally from Ghana, is on trial in London accused of fraud and false accounting for a $2.3 billion trading loss. He ended eight days of testimony today by saying the text messages indicated his realization he would “have to tell more of the truth about the involvement of others.”
Adoboli is accused of hiding 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. As part of his defense, he claimed three others on the exchange-traded-funds desk knew of or took part in the activities and chose to let him take the fall alone.
None of the other traders have been charged.
Prosecutor Sasha Wass said today she misspoke earlier in the trial when she said the Crown Prosecution Service believed Adoboli had definitely fabricated certain text messages to help form a defense. Instead, she said, the agency can’t verify whether they are genuine or not.
“I didn’t recently make it up -- it did happen,” Adoboli said of the his claim that his teammates knew of the trades. He cited text messages about a meeting at a bar near UBS’s London office on Sept. 12, 2011, at which Adoboli said it was decided who should take the blame for the losses.
“I’m a little upset because the boys sold me down the river,” one of Adoboli’s texts said, according to phone records read out in court. “I can understand why, because I’d given them the option” to say the trades were my responsibility.
The other three traders -- John Hughes, Simon Taylor and Christophe Bertrand -- all denied attending the meeting.
Adoboli wiped away tears at the end of his testimony after being shown a photograph of himself and the other members of the ETF team.
A report by KPMG LLP on how UBS systems failures allowed the trades to happen found three other instances of unauthorized trading at the bank.
Colin Bell, the global head of operational risk control at UBS, testified earlier in the trial that he was aware of the other incidents. Those cases didn’t involve substantial losses and may not have involved fraud, he said. In two of the three instances, the employees were fired. In the other case, the matter was reviewed and the person still works for the bank, he said.