Court hears how Whitechapel ‘rogue trader’ lost control
An alleged rogue trader accused of gambling away �1.4 billion while working at the UBS bank described to a jury today how he was encouraged to push boundaries by his senior managers.
Kweku Adoboli, 32, from Whitechapel, is accused of committing Britain’s biggest ever fraud during the global financial crisis.
Jurors at Southwark Crown Court heard the fund was doing well until he changed from a conservative “bearish” position to an aggressive “bullish” stance under pressure from senior managers.
Describing the moment when he began to make serious losses in July last year, he said: “The real problem was a result of the pressure to flip my position from short to long, this broke my control.
“I absolutely lost control, I was no longer in control of the decisions around the trades we were doing.”
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Adoboli made the sign of the cross before giving evidence.
The former public schoolboy, of Clark Street, worked for UBS’s global synthetic equities division, buying and selling exchange traded funds (ETFs), which track different types of stocks, bonds or commodities such as metals.
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He claims senior managers were fully aware of what he was doing.
Yassine Bouhara, former co-head of equities at UBS, allegedly told Adoboli in an email: “You don’t know what your limits are until you push the boundary so far that you receive a slap on the back of the wrist.”
Questioned by his defence barrister Paul Garlick QC, he said: “There were no secrets, there was no hiding, there was no holding back.
“We were told to go for it, we went for it.
“We were told to push the boundaries, so we pushed the boundaries.
“We were told you wouldn’t know where the limit of the boundary was until you got a slap on the back of the wrist.
“We found that boundary, we found the edge, we fell off and I got arrested.”
The court has heard that at one point Adoboli was at risk of causing the bank losses of $12 billion (�7.5 billion).
By 2007 Adoboli, aged 27, and a more senior trader, John Hughes, 25, were in charge of a portfolio of companies with assets of $50 billion.
Although he has described his relationship with Mr Hughes saying they were “brothers”, by 2011 the bond between the two had deteriorated.
Mr Hughes circulated an email to UBS colleagues across the world mocking Adoboli’s bearish position, the court heard.
It was pressure of this sort that pushed him towards a new position which ended in disaster, he claimed.
He denies two counts of fraud and four counts of false accounting between October 2008 and last September after he set up an “umbrella” fund for off-book trades.
The trial continues.