LONDON Nov 8 Former UBS trader Kweku
Adoboli caused the largest trading loss in British banking
history through reckless and dishonest methods, a prosecutor
said on Thursday.
Sasha Wass said it was "preposterous" of Adoboli to argue
that UBS managers had encouraged him down the path that led to
losses of $2.3 billion.
Adoboli, 32, was arrested in September 2011 and his trial
started a year later. He denies two counts of fraud and four of
false accounting from October 2008 to September 2011.
"It was his off-book, unhedged and concealed trades that
caused the loss of $2.3 billion," Wass said during her closing
speech in the long-running case.
"It was by any standard of the imagination a huge loss, the
largest trading loss in UK banking history."
The prosecution say Adoboli traded far in excess of his risk
limits, concealed his positions by booking fictitious hedges
into the accounts and lied to the UBS back office when asked
about his trades.
"His reputation as a trader was built on those lies. He had
been awarded promotions, pay rises and bonuses on the back of
those lies. The City banker, the star trader, was a lie, a
fiction, based on a complete fantasy, an accounting
fabrication," said Wass.
Adoboli accepts that he concealed trades with fictitious
hedges and lied to the back office but says he was not dishonest
in doing so. Under British law, the jury must be certain that he
acted dishonestly before they can convict him.
He has argued during the trial that he acted only for the
good of UBS, that the bank wanted profits and did not care how
they were achieved, that questions were asked only when the
trades became loss-making and that colleagues knew of his
trading methods and sometimes used similar ones.
"All you have are his unsupported smears to make it sound
like UBS was replete with rogue traders like himself," Wass told
"It is a fantastical suggestion that the bank knew or
approved of what Mr Adoboli was doing," she said.
"His defence is, in effect, ridiculous."
Wass pointed the jury to two emails that UBS had sent to its
investment banking staff flagging up the case of Jerome Kerviel,
a trader accused of causing a loss of $7 billion at the French
bank Societe Generale.
The first, dated Jan. 25, 2008, alerted UBS staff to the
case, outlined what Kerviel was accused of and listed some "red
flags" that staff should be alert to.
The second, dated Oct. 19, 2010, informed staff that Kerviel
had been convicted of forgery and breach of trust.
Wass said what Adoboli did was almost identical to what
Kerviel had done, and that he could have been in no doubt that
such methods could never have been condoned or authorised by a
bank, and that they were criminal.
"How on earth, with all this (the Kerviel case) going on in
the background, did he think his behaviour was honest and
acceptable?" she said.
Wass also ridiculed Adoboli's account of what happened in
July and August 2011, the period when the huge losses were
racked up. He says he lost control at that time because he was
suffering from burnout.
"He may well have been a little stressed," she said,
reminding the jury that on Aug. 11 Adoboli's hidden risk
exposure had peaked at nearly $12 billion.
"He was stressed because his wild and reckless gambles were
making losses and he feared he might get caught," she said.
After nine weeks of painstaking evidence, Adoboli's trial is
drawing to a close. After the prosecution's closing speech on
Thursday, the defence is expected to make its own closing speech
The judge will sum up the case for the 11 jurors early next
week and then they will retire to consider their verdict.