LONDON (Reuters) - The head of an internal UBS UBSN.VX probe into “rogue trader” Kweku Adoboli, accused of losing the Swiss bank $2.3 billion, did not consider whether others at the bank might have been involved, a London court heard on Wednesday.
However, Ruwan Weerasekera, chief operating officer of UBS’s investment arm, said two other independent inquiries had looked into all aspects of the bank’s involvement and had found no complicity among the bank’s managers.
Adoboli, 32, is on trial at London’s Southwark Crown Court accused of two charges of fraud and false accounting, which he denies.
The prosecution say he routinely exceeded his trading limits and hid his illegal activities from the bank with fictitious trades, using an illicit “umbrella” slush fund to disguise profits from unauthorized deals.
His defense team argue he believed he was acting for the good of the bank and colleagues were aware of his activities.
Weerasekera, who led UBS’s in-house investigation after Adoboli was arrested on September 15 last year, told the court his focus had been solely on the accused trader.
He said this was because an email Adoboli sent on September 14, confessing to making illegal trades and hiding his risk exposure, stated others were unaware of what he had been doing.
“My remit was to find out what happened,” he said, explaining his inquiry, named Project Bronze, was to look at how the loss occurred.
But he said he would have extended his investigation had he been aware of chat room exchanges between Adoboli and John Hughes, a senior trader on the Exchange Traded Funds desk, in which he appeared to refer to the umbrella fund.
“If I had seen these at the time I would have looked at it further,” he said.
However, Weerasekera said two other inquiries, one by the bank’s Group Internal Audit unit which reported directly to the UBS board and another by accountancy firm KPMG, had been asked to look at “everything everyone did”.
“Did you find any evidence that the management of UBS were complicit in any way for the loss?” prosecutor Sasha Wass asked Weerasekera, who had acted as liaison for both probes.
He replied: “I did not find any information” that managers were complicit.
Adoboli’s lawyer Paul Garlick told the court some fictitious trades appeared to have been cancelled when the trader was away on holiday in Greece during June 2011.
Weerasekera said even if that were the case, he could not categorically exclude Adoboli from being responsible for them.
The trial continues.
Editing by Andrew Roche