Kweku Adoboli ‘learnt behaviour from colleagues’
The alleged “rogue trader” accused of losing UBS $2.3 billion (£1.4 billion) had learnt his behaviour from colleagues who “stabbed him in the back” when the trades were discovered, a court was told today.
A defence lawyer for Kweku Adoboli, 32, told Southwark Crown Court that his client’s three colleagues on the bank’s exchange traded funds (ETF) desk had taken part in “off-book” trades and were aware of the existence of a secret fund called the “umbrella” that was used to hide their true trading position.
Addressing John Hughes, a senior trader on the ETF desk who was dismissed in the wake of the trading loss, Charles Sherrard, QC, said the evidence showed that Mr Adoboli’s actions were “learnt behaviour”.
“There were other books, other equivalent umbrellas that were being used at UBS and may still be to this day,” Mr Sherrard said. “Secret books that were being used to suppress profits and other data.”
Mr Hughes, who disputed that he was Mr Adoboli’s supervisor, admitted that in January last year he had asked the former public schoolboy to move profits from the 2010 accounts into that year’s records.
“It was a manipulation of the figures,” Mr Sherrard said, to which Mr Hughes replied: “Yes.”
Extracts from an internal chat log were read to the court in which Mr Hughes asked his colleague: “If you can 2010 PnL [profits] as low as possible”.
“Ok sir”, Mr Adoboli replied, to which Mr Hughes added: “Not a daft amount.”
Speaking from the witness box, Mr Hughes admitted it was something that “we would probably try and do [every year]”.
He said that Mr Adoboli was “braver” but “more cavalier” than he was as a trader.
“I had a lot of admiration for his ability to handle risk,” he told the court.
Mr Sherrard said that, rather than being a secret slush fund, there was an “entirely proper” reason for the umbrella. He said that it was used to cope with “unexpected and ever increasing costs that the desk had to bear the burden of”, as well as to give traders “more confidence in the way in which they traded”.
The barrister suggested that Mr Hughes and the two junior members of the desk decided on a “backstabbing strategy” when the trades were discovered last September.
“When the time came and Mr Adoboli called a halt to the trades … your team changed from being the four musketeers into three,” Mr Sherrard said.
He continued: “[You] decided just before he confessed to collectively and individually stab him in the back, ultimately leaving him to bleed to death in prison.”
Mr Adoboli, who has pleaded not guilty, faces two charges of fraud by abuse of position and two of false accounting.
The trial continues.
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