LONDON (Reuters) - Former UBS UBSN.VX trader Kweku Adoboli wept on Friday as he told a jury that his “off-book” trading was done for the benefit of the bank that meant everything to him.
Addressing the court for the first time in his long-running trial in London, Adoboli said he had no reason to believe he was doing anything wrong since he was doing it to generate profits and colleagues knew about it.
“UBS was my family and every single thing I did, every single bit of effort I put into that organization, was for the benefit of the bank,” said Adoboli, his voice breaking as he wept and thumped the witness box with his hand.
“That is everything I lived for ... To find yourself in Wandsworth Prison for nine months because all you did was worked so hard for this bank,” he said through tears.
The 32-year-old British-educated Ghanaian was arrested on September 15, 2011, and blamed for losses of $2.3 billion. He was in custody until he was granted bail in June 2012.
He has pleaded not guilty to two counts of fraud and four of false accounting, covering the period between October 2008 and September 2011.
The prosecution says Adoboli traded far in excess of his authorized risk limits, concealed his unhedged positions by booking fictitious hedges, and lied to the back office when asked questions about his accounts.
Adoboli said he had developed an accounting mechanism he called his “umbrella” which allowed him to keep certain trades and the profits they generated “off-book”.
He said this “profit pool” served two purposes: to help offset mounting costs that were a drain on the desk’s profits, and to give him and his desk colleagues confidence to trade in the knowledge that they had a “cash buffer” to fall back on should they make losses.
Adoboli said he did not think this was dishonest or contrary to the bank’s rules because it was aimed at making a profit, which was the purpose of his job.
“Ultimately that’s what everyone cares about,” he said.
He also said that when he explained his umbrella to his three fellow traders on the Exchange Traded Funds (ETFs) desk and to colleagues from other trading desks, nobody gave any sign that they disapproved.
“The response I got from everyone else is ‘OK, that’s a way of doing it, that’s an accounting practice, keep on doing it’,” he told the court.
Asked about a comment from fellow trader John Hughes that “your umbrella is going to get us fired”, Adoboli said this was a joke.
Adoboli described the ETFs desk as over-stretched and under-resourced. He referred to himself and Hughes, the only two traders on the desk initially, as “babies” and “kids” dealing with a “massive” $50 billion book.
The courtroom was packed as Adoboli gave his evidence, wearing a dark suit and dark red tie. Most of the time he appeared confident, speaking loudly and clearly as he answered questions from his lawyer.
But Adoboli cried on several occasions when friends and family were mentioned. The first was when his lawyer mentioned that his father had come from Ghana and been present in the courtroom throughout the trial, which started on September 10.
Describing how hard he had worked during the financial crisis in 2008, when he said he had feared for the survival of UBS, Adoboli wept again as he recalled that he had missed his grandmother’s funeral because of how committed he was to his job.
The most dramatic moment in the first day of his evidence came just before the court adjourned for lunch, when Adoboli broke down as he tried to explain what his work had meant to him.
“It’s hard to find the words to describe the relationship I had with UBS,” he said, launching into a passionate speech during which he sobbed, struggled to catch his breath and thumped the desk in front of him with his right hand.
After a summer internship at UBS in 2002, when he was a student, Adoboli joined the bank as a graduate trainee in 2003. Throughout his evidence on Friday, he spoke of pride and a sense of belonging and of the respect and friendship he felt for many of his colleagues.
The trial continues on Monday, when Adoboli will continue giving evidence.
Editing by Pravin Char