September 20, 2012 / 10:48 AM / in 6 years

UBS risk limits "didn't matter": ex-trader's lawyer

A woman stands in front of the office of Swiss bank UBS at Paradeplatz square in Zurich August 10, 2012. REUTERS/Arnd Wiegmann

LONDON (Reuters) - The culture at Swiss bank UBS UBSN.VX when accused “rogue trader” Kweku Adoboli was working there was that risk limits could be exceeded as long as the bank was making money, Adoboli’s defense lawyer told a London court on Thursday.

Adoboli, 32, was arrested on September 15, 2011 and is now on trial accused of fraud and false accounting that cost UBS $2.3 billion. He has pleaded not guilty.

Cross-examining Ronald Greenidge, one of Adoboli’s ex-bosses, defense counsel Charles Sherrard read out an exchange between the two men that took place on an electronic chatroom on April 14, 2011. In the conversation, Adoboli made it clear he was finishing the trading day with a risk exposure of $40 million, beyond his desk’s agreed $25 million overnight limit. Greenidge did not raise any questions about that.

“This is, I suggest, the first example of where the culture and practice of the bank you were both working for was that risk limits didn’t matter as long as you were making money,” Sherrard said.

Greenidge answered: “That’s not true.”

Almost immediately after the exchange, Greenidge asked judge Brian Keith for a pause, looking unwell. Keith immediately adjourned the hearing.

Reporting by Estelle Shirbon; editing by Guy Faulconbridge and Peter Griffiths

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