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Kweku Adoboli: "My Ability To Think Deeply Was Gone"
 
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31-Oct-2012  
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Mr. Adoboli
 
 
 
Kweku Adoboli, the former UBS AG trader standing trial for fraud and false accounting, acknowledged he lost control of his trading activities in the period that led up to the multibillion-dollar loss at the Swiss bank last year.

Testifying in his defense for a third day at Southwark Crown Court in London, the Ghana-born former trader told the court: "I absolutely lost control. I was no longer in control of the decisions around the trades we were doing." Mr. Adoboli also said that "my ability to think rationally and deeply was gone."

Mr. Adoboli, 32 years old, stands accused of two counts of fraud and four of false accounting related to $2.3 billion in trading losses. He denies all of the charges. UBS fired Mr. Adoboli soon after discovering the losses.

Under questioning from his lawyer, Mr. Adoboli told the court that the Swiss bank had pushed its traders to take more risk in order to make greater profits. He recounted a conversation with Yassine Bouhara, former co-head of equities at the bank, who purportedly told him on April 11 last year: "You don't know that you have pushed the boundaries hard enough until you've had a slap on the back of the wrists."

The court first heard about this alleged conversation during Mr. Adoboli's testimony Monday. Mr. Adoboli added Tuesday: "We found that boundary, we found that edge, we fell off, and I got arrested."

Reiterating that he had "lost control over the positions we were holding" in mid-July 2011, Mr. Adoboli told the court about a number of off-book trades and fictitious positions used to construct his so-called umbrella fund. He said these had become a "mess," blaming a "maelstrom" in the financial markets last summer as well as pressure from colleagues at the bank to alter his trading strategies.

He said he had switched from a bearish trading position to a bullish position under pressure from the bank, which he said had developed a "house view" that there would be a "summer bounce" and had instructed all of its traders to go long.

His resulting loss of control led to an increase in frantic trading activity and more breaks being flagged up in UBS's compliance systems, he said.

Mr. Adoboli maintained that the umbrella fund—which allegedly concealed some of his trading profits and losses from the bank—was constructed for the benefit of the bank.
 
 
 
Source: The Wall Street Journal
 
 

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