LONDON Ex-trader Kweku Adoboli told a court on Monday his bosses at UBS UBSN.VX, including senior executive Carsten Kengeter, had been pushing him to take more risks when he took positions that eventually cost the Swiss bank $2.3 billion.
Giving evidence at his criminal trial, Adoboli quoted another senior executive as telling him in April 2011 he should keep testing the boundaries until he received "a slap on the back of the wrist".
Adoboli, 32, was arrested on September 15, 2011 and his trial started a year later. He has pleaded not guilty to two counts of fraud and four of false accounting.
The prosecution have described him as a "rogue trader" who far exceeded his risk limits and concealed his unhedged positions by making fictitious bookings into the accounts.
The British-educated Ghanaian does not deny he made fictitious bookings, but he says everything he did was to generate profits for UBS, the Swiss bank he considered his "family".
"I don't believe I was a rogue trader," Adoboli told the jury on Monday, describing himself as a team player who was constantly sharing information and ideas with colleagues.
Adoboli cried in the witness box on Monday as two advertisements from UBS's "We will not rest" campaign were played in court. The campaign was part of the bank's efforts to improve its image after it came close to collapse during the financial crisis of 2008.
The ex-trader testified he had taken the campaign very seriously and that to him, it was an encouragement to "become more innovative", "take more risk" and "be bold".
Asked by his lawyer when he had abandoned his commitment to UBS, he said: "At 3 a.m. (on September 14, 2011), when they told me they had called the police".
"PUSH THE BOUNDARIES"
Adoboli said a "huge cultural change" affected his Exchange Traded Funds (ETFs) desk in April 2011, when as part of an internal re-organisation it was moved from the cash equities division to the Global Synthetic Equities (GSE) unit.
He said GSE was led by senior managers recently hired by UBS from rival Deutsche Bank, who had brought with them a more aggressive trading culture. One was Yassine Bouhara, who later resigned as co-head of global equities at UBS in the wake of Adoboli's arrest.
Adoboli recalled a conversation on April 11, 2011, in which Bouhara had pushed him to take greater risks in pursuit of greater profits.
"He said 'you do not know that you have pushed the boundaries far enough until you get a slap on the back of the wrist'," Adoboli said.
One of his lines of defence has been that the large trading positions he took in the summer of 2011 were in line with a new, more aggressive trading style being promoted by senior management.
His defence team has sought to portray UBS as a bank where supervision was lax and managers turned a blind eye to rule-bending as long as profits rolled in.
He recalled that in May and June 2011 he held a bearish view of the markets and colleagues had relentlessly pressured him into changing his stance.
This culminated in his close colleague John Hughes sending a caricature of Adoboli as a bear to a large group of people.
"At that stage I broke. I just broke," said Adoboli.
"I WISH I WAS A ROGUE TRADER"
These events led Adoboli to flip from a short to a long position on July 1 and to stick to that new stance through a sell-off in August, leading to huge losses.
"It (the market) sold off 30 percent from peak to trough and I held it all the way down because of the intervention of those around me," Adoboli said.
He argued that if he had stuck to his short position he would have made profits, not losses, and would never have got into trouble.
"I wish I was a rogue trader. I wish I hadn't listened. I wouldn't be here today," he said.
Among those who influenced his thinking during that period, he said, was Kengeter, then chief executive officer of UBS's investment banking arm. Since July this year, Kengeter has shared that position with Andrea Orcel.
Adoboli said Kengeter had visited the ETFs desk on July 12, 2011, recalling that they had talked about their views of the world and that Kengeter had told him: "I like your trade."
"He had acquired the view that the market was going to rally. It is churlish of a relatively junior trader to ignore the word of the global head of the whole investment bank," Adoboli told the court.
The trial continues on Tuesday, when Adoboli will continue giving evidence.
(Writing by Estelle Shirbon; editing by Andrew Roche)