Accused UBS rogue trader did not act alone - lawyer

LONDON Thu Sep 27, 2012 6:09pm BST

1 of 3. Former UBS trader Kweku Adoboli arrives at Southwark Crown Court in London September 27, 2012. Adoboli is on trial accused of fraud and false accounting that cost the Swiss bank $2.3 billion. He has pleaded not guilty.

Credit: Reuters/Stefan Wermuth

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LONDON (Reuters) - The lawyer for accused UBS rogue trader Kweku Adoboli said in court he did not act alone but in close cooperation with fellow traders who later "stabbed him in the back".

Adoboli, 32, denies charges of fraud and false accounting that cost the Swiss bank $2.3 billion (1.4 billion pounds).

His lawyer, Charles Sherrard, told Southwark Crown Court on Thursday that Adoboli's three colleagues on the bank's Exchange Traded Funds desk had taken part in some of the fraudulent behaviour of which he is accused.

Prosecutors have portrayed Adoboli as an "out of control" rogue trader who abused the bank's trust for personal gain.

His defence team have argued that UBS turned a blind eye to rule-breaking as long as it made the bank money.

"Your team changed from being the four musketeers to three musketeers, who decided just before he (Adoboli) confessed, collectively and individually, to stab him in the back, leaving him to bleed on the prison floor," Sherrard told John Hughes, who along with Adoboli was a senior trader on the four-man desk.

The other two traders, who were more junior, are due to give evidence following Hughes.

Hughes admitted, after Sherrard read out the transcript of a January 2011 chat between him and Adoboli, that he had manipulated figures on the books to make the desk's performance look better.

The 30-year-old Hughes, sacked by UBS for gross misconduct after Adoboli's arrest, told the court he fully deserved to be dismissed.

UMBRELLA LEGEND

He said at the witness stand that Adoboli had told him in early 2011 of his "umbrella", described by the prosecution as a personal slush fund used to hide profits and losses made on unauthorised trades.

Sherrard read out electronic chat, emails and text messages that he said suggested Hughes had not only endorsed the umbrella but made enthusiastic use of it.

In a chat in February 2011 after Adoboli told him how much was in the umbrella that day, Hughes was quoted as responding: "Nice. It can piss down with rain after this. You're a legend. I don't know how you sleep at night."

Hughes said he had been uncomfortable with the umbrella and that he had been "stupid" not to report Adoboli and end the matter there.

Asked to explain exchanges about specific trades, Hughes repeatedly said he could not remember the details, which prompted Sherrard to accuse him of having a selective memory.

"This was a huge trauma," Hughes said, adding that he had received six weeks of counselling in the wake of Adoboli's arrest on September 15, 2011.

"I nearly drove my car into the middle of the motorway. I wasn't a rational human being. I cried all the way home from London to Middlesbrough," he said.

Hughes will resume giving evidence on Friday.

(editing by Jane Baird)

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