UBS trader trial: Bank had culture of risk taking
There was a culture of financial risk taking and seeking at a bank where an alleged rogue trader accused of losing �1.4 billion worked, a court heard today.
Kweku Adoboli is facing two counts of fraud and two of false accounting.
The team on UBS’s London exchange traded funds (ETF) desk, including Adoboli, were known to take greater risks than their counterparts in the Swiss bank’s New York office, one of his former supervisors told Southwark Crown Court today.
John DiBacco, who oversaw the bank’s ETF teams and was later sacked, also told the court he informed investigators that more senior managers told him to be careful not to “stifle” Adoboli, 32, and his co-traders, as “they like to trade”.
The court heard that Mr DiBacco told KPMG accountants of “that attitude to risk, to be seeking to accept more risk and take more risk in London than in the US”, adding: “When the traders have less to do, they find things to do.”
Paul Garlic QC, representing Adoboli, asked the American: “The trading, would you say it was very much more aggressive than the equities desk in the US?
“The trading and culture in London was much less risk averse?”
- 1 Woman treated at scene as 40 firefighters called to Bow tower block
- 2 Bow Lock murder defendants blame each other for fatal attack
- 3 Three stabbed in Chrisp Street chicken shop
- 4 Census 2021 indicates baby boom in one east London borough
- 5 8 charged after drugs raids in Hackney and Tower Hamlets
- 6 Council rapped by ombudsman after not following safeguarding procedures
- 7 V&A launches festival to celebrate 150 years in Bethnal Green
- 8 Latest data shows Covid admissions rising again at east London hospitals
- 9 Roman Road shop blaze 'believed to be accidental'
- 10 Footballer convicted of hate crime after homophobic abuse of opponent
He replied: “In my experience that is true.”
Adoboli is facing two counts of fraud and two counts of false accounting between October 2008 and last September, allegedly gambling away the money on high risk illegal trades aimed at boosting his annual bonuses and job prospects.
The former public schoolboy, of Clark Street, Whitechapel, east London, worked for UBS’s global synthetic equities division, buying and selling ETFs, which track different types of stocks, bonds or commodities such as metals.
The court has heard that at one point he was at risk of causing the bank losses of 12 billion US dollars (�7.4 billion).
He claims he acted with the backing of his bosses at the bank.
Mr Garlic asked Mr DiBacco about an email from Adoboli in June last year, telling him he has made six million dollars in one day by taking 200 million dollars-worth of financial risks, far above what he should have taken.
Mr Dibacco replied “well done”.
Asked why he did not censure Adoboli, he said he sent a second more critical email, adding: “The conversation later between Adoboli and myself was much more aggressive.”
Asked what management meant when he was told not to stifle the ETF team, he said: “You have to try not to be an oppressive micro manager.”
He admitted he had been more concerned by the actions of one of Adoboli’s colleagues, who seemed “more aggressive”.
The trial continues.