LONDON Nov 14 The jury in the London trial of
former UBS trader Kweku Adoboli, who is blamed for a
loss of $2.3 billion, retired on Wednesday to consider its
Adoboli, 32, denies two charges of fraud by abuse of
position and four charges of false accounting, covering the
period from October 2008 to his arrest on Sept. 15, 2011. His
trial started on Sept. 10 this year.
There was no way of knowing how long the jury would take to
reach verdicts on all six counts.
There are 11 jurors in the case, meaning that if they cannot
reach a unanimous verdict on one or more counts, a 10-1 majority
decision would be acceptable.
Adoboli joined UBS as a graduate trainee in 2003 and worked
in back and middle office roles until December 2005, when he
became a trader.
He joined the Exchange Traded Funds (ETFs) desk in September
2006 and remained there until his arrest.
He is accused of carrying out unhedged trades far in excess
of his authorised risk limits, concealing his true risk exposure
by booking fictitious hedging trades, and concealing some of his
profits so that he could plough them back into the official
accounts when it suited him.
The prosecution say he was driven by a desire to be a star
trader with huge bonuses to match.
Adoboli accepts that he did those things but says he was not
acting dishonestly because everything he did was to maximise
profits for UBS and his methods were in line with the bank's
As judge Brian Keith put it while summing up the case for
the jury at Southwark Crown Court, Adoboli's defence is that
managers gave traders "a wink and a nod" that it was permissible
to exceed risk limits in pursuit of profits.
Adoboli also says that his three fellow traders on the ETFs
desk were active participants in his trading methods, and that
traders on other desks engaged in similar practices.
THE DISHONESTY QUESTION
The judge explained to the jurors that under British law,
Adoboli should be considered dishonest if he knew at the time
when he was carrying out the alleged crimes that his conduct
would be considered dishonest by sensible and honest people.
The indictment is split into two periods, one from October
2008 to the end of May 2011, and the other from June to
September 2011. It was in the second period that Adoboli racked
up the huge losses.
For each period, Adoboli faces one count of fraud by abuse
of position and two of false accounting.
The fraud charges relate to the unhedged trades in excess of
risk limits. In order to convict him of those charges, the
jurors have to be sure either that he intended to expose the
bank to the risk of losses beyond what was normal for any
trader, or that he intended to make a personal gain for himself,
The first set of false accounting charges relate to the
booking of fictitious hedging trades to conceal the true risk
exposure from the bank.
The second set of false accounting charges relate to the
booking of fictitious cash-only trades. This was the method that
Adoboli used, as part of what he called his "umbrella", to
conceal some of the profits from his unauthorised trades for the
Adoboli says he did this so the ETFs desk would have a "cash
buffer" to offset mounting costs and to give the traders more
confidence to take risk.
The prosecution say he did it to hide losses and smoothe the
desk's profit and loss curve to give the impression that he was
always producing profits.
In order to convict him of the false accounting charges, the
jurors have to be sure that he intended to make a personal gain