October 26, 2012

Accused UBS "rogue trader" Kweku Adoboli said on Friday he did not believe his behaviour had been fraudulent and it was unfair to suggest that his previous jobs in the UBS back office had given him the knowledge and skills to commit fraud.

Adoboli, 32, was speaking for the first time in his six-week trial in London where he denies six charges relating to losses of $2.3 billion incurred by the Swiss bank.

Within seconds of entering the witness box, the former trader broke down in tears when his lawyer pointed out that his father had travelled from Ghana to be present at the trial and had been in the courtroom throughout.

He appeared to choke with emotion, bowed his head, wiped his eyes and was unable to speak. There was a long pause and his lawyer Paul Garlick suggested that he should drink some water to help compose himself.

Adoboli was arrested at UBS's London offices in the middle of the night on Sept. 15, 2011, just hours after he sent an email to a back-office accountant explaining that he had booked fictitious trades to conceal losses made on "off-book" trades.

Giving evidence on Friday, Adoboli said he had been asked to bring his "ability to understand the interaction of systems" to the Exchange Traded Funds (ETFs) desk when he joined as a junior trader in 2006.

"It is not fraudulent, it is finding a way to do your job," he told a packed courtroom.

"OUT OF CONTROL"

Prosecutors have portrayed Adoboli as a greedy, out-of-control rogue trader who recklessly gambled away UBS's money because he wanted to be a star of the trading floor and earn bigger bonuses.

They have described a "pyramid of fraud" in which he routinely exceeded his risk limits, concealed his positions by booking fictitious hedges and lied to the back office when asked about his trades.

Adoboli's defence team have sought to show that others within UBS knew of and condoned some of his methods.

As he gave his evidence, Adoboli shed tears for a second time when talking about Mike Foster, who was in charge of the ETFs desk when Adoboli joined and who has been supporting him throughout his trial. Foster no longer works for UBS.

"He wanted to make sure we could build something we could all be proud of," Adoboli said, his voice choked with emotion, after a long pause during which tears welled up and he was unable to speak.

The judge told Adoboli he should not be embarrassed and that it was clear he was becoming emotional when talking about people he cared about such as his father or Foster, and that it was useful for the jury to get a sense of his personality.

However, in between the moments of emotion, Adoboli spoke in a calm, assured manner and appeared confident.

He said he had learned early in life a sense of responsibility as he was oldest child and only son of a Ghanian U.N. official who was often away on business, leaving him to "look after" mother and three sisters.

He grew up in Ghana, Israel and Syria, and from a young age had acquired an early understanding of geo-politics, while his education at a Quaker boarding school in northern England had taught him "a lot of great values" about community, he said.

Earlier, he pleaded not guilty to two new counts of false accounting which the court heard were added to help clarify the case for the jury. There are now six counts in total, two of fraud and four of false accounting.

The trial continues.

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