Accused UBS rogue trader: 'I lost control'

LONDON (Reuters) - Former UBS trader Kweku Adoboli told a London court on Tuesday he had "lost control" of his trading in the summer of 2011 but insisted he never acted dishonestly in the frantic weeks that resulted in losses of $2.3 billion.

Adoboli also attacked the culture of investment banks, arguing that compliance rules were "aspirational" and that traders knew they had to bend rules to achieve the goals set by senior management.

The 32-year-old British-educated Ghanaian, who used to be a senior trader on the Exchange Traded Funds (ETFs) desk at UBS's London offices, was arrested on September 15, 2011. He denies two counts of fraud and four of false accounting.

The prosecution says he traded far in excess of his risk limits and concealed his positions with fictitious accounting. Adoboli says everything he did was for the benefit of UBS.

The ex-trader said his troubles started on July 1, 2011, when, under intense pressure from fellow traders and managers, he abandoned a long-standing bearish stance and flipped his trading position to a long one. Just after he did so, the market started to sell off.

"I lost control. The result of that loss of control was an increasing number of breaks (accounting problems), a more frantic trading activity, a less controlled decision-making process," he said.

Later that month, as losses mounted in a volatile market, Adoboli recalled that exhaustion and stress levels reached such a peak that it caused him to briefly break up with his long-term girlfriend.

He said that on the evening of July 23 the couple had been supposed to go out for dinner but he found himself unable to talk to her.

"I went a bit catatonic. I was curled up on my bed. She was asking me what was wrong. I just couldn't explain," he said.

About two weeks later he reunited with his girlfriend and she, over time, persuaded him to stop trying to recoup the losses and open up to someone about his true position.

"In the end she was the strength. She was the person who said to me 'Look, Kwek, if you can't do this, if you can't fix this, then look within yourself and maybe go and tell someone.'

"This is going to kill you. You can't keep fighting this battle that you are clearly not winning," Adoboli quoted his girlfriend as telling him.

He said that by the end of August he came around to her point of view.

"I had told loads of people different stories about what the trades were to buy us more time to recoup the losses. Eventually I accepted that I would have to tell someone about the true nature, the full scale of the losses," he said.

MORE RISKS, MORE PROFIT

In a separate strand of his evidence, Adoboli said he did not believe he had done anything dishonest because he was trying to deliver what UBS management wanted: greater risks in pursuit of greater profits.

He said that in the spring of 2011 the ETFs desk was doing so well that it was held up as an example to other UBS trading desks.

"There were no secrets. There was no hiding. There was no holding back," he said, describing that period.

"We were told to go for it. We went for it. We were told to push the boundaries ... We found the boundary. We found the edge. We fell off the edge and I got arrested," he said.

Adoboli said UBS and investment banks in general set traders unrealistic objectives and everyone knew they could only be met with a certain amount of rule-bending in areas like risk limits.

"The policies were aspirational policies, and on the ground - at the coalface - you had to put in place mechanisms to achieve what you had to achieve," he said.

"In order to achieve what the bank leadership wanted us to achieve, we cannot stick to the policy. We are allowed, it is approved, in reality, that we're going to try to meet in the middle somewhere."

The trial continues. (Editing by Robin Pomeroy)

Source: http://news.yahoo.com/accused-ubs-rogue-trader-lost-control-152349105--sector.html

key largo arnold palmer invitational ryan madson louisiana primary syracuse basketball chipper jones chipper jones