Adoboli’s lawyers cite culture at UBS
ACCORDING to Kweku Adoboli’s lawyers, UBS has a culture that overlooks trading limits and other rules “as long as you are making money”.
During cross-examination of one of Adoboli’s former bosses at a fraud trial in London yesterday, Adoboli lawyer Charles Sherrard said the bank became “more aggressive in terms of its desire to make profits” in 2011. “The culture, practice at the bank you were working for, didn’t matter as long as you were making money,” Sherrard said to Ron Greenidge, who oversaw UBS’s exchange traded funds (ETFs) desk until April of last year.
Adoboli, 32, is on trial on charges of fraud and false accounting over unauthorised trades that lost $2.3 billion (R18.9bn) last year.
Adoboli admitted that he risked $5bn on Standard & Poor’s 500 futures and a further $3.75bn in the German futures market, Greenidge said in testimony on Wednesday.
Greenidge, who worked at UBS for 19 years, said yesterday that he was dismissed for gross misconduct because of Adoboli’s trades. He said he felt that the bank was making him a scapegoat.
Sherrard read out performance reviews from 2009 written by Greenidge that said Adoboli needed to achieve a better work-life balance. Greenidge agreed Adoboli was a “great ambassador for the ETF product”, and had an outstanding performance that year.
Greenidge, who said he had daily contact with Adoboli after he became a trader in 2006, was one of the first people to meet with Adoboli on the day he confessed in an e-mail to hiding trades last year. In the September 14, 2011, meeting, Adoboli said his first fictitious trade was made in October 2008, Greenidge testified on Wednesday.
Adoboli, who eventually caused UBS to lose $2.3bn, “had a brief window to take the position to zero and he didn’t, and then the market started to go down”, Greenidge testified on Wednesday.
Adoboli has denied the charges and the former trader’s lawyers have said he was looking forward to providing the jury with his own account of what happened.
“This can’t be true,” Greenidge said was his initial reaction when he saw Adoboli’s e-mail. “I could not believe that someone I worked with… would do something like this.”
William Steward, a former accountant in product control for UBS, said previously he began looking into Adoboli’s trades in August 2011 after receiving a report of a $3.57bn discrepancy. Steward said he believed Adoboli’s initial explanations that he hadn’t had time to book all of his trades.
Adoboli’s losses piled up when he increased the size of his positions in June last year and then made “incorrect” trades, Greenidge said. – Bloomberg