Kweku Adoboli, the former UBS AG trader on trial for fraud and false accounting, missed a chance to erase billions of dollars in unauthorized trading losses, according to one of his managers at the bank.
Adoboli, who eventually caused UBS to lose $2.3 billion, “had a brief window to take the position to zero, and he didn’t and then the market started to go down,” Ron Greenidge told a London court today. Greenidge, who oversaw the exchange-traded- funds desk until April of last year, was one of the first people to meet with Adoboli on the day he confessed in an e-mail to hiding trades.
Adoboli, 32, admitted he risked $5 billion on Standard & Poor’s 500 futures and a further $3.75 billion in the German futures market, Greenidge said. The former trader has denied the charges and his lawyers have said he is looking forward to providing the jury with his own account of what happened.
“This can’t be true,” Greenidge, who no longer works at UBS, said was his initial reaction when he saw the e-mail. “I could not believe that someone I worked with back at the time would do something like this.”
William Steward, a former accountant in product control for UBS, said yesterday he began looking into trades by Adoboli in August 2011 after receiving a report of a $3.57 billion discrepancy.
“He had been trading in breach of his limits and booking fictitious trades to hide the exposure of his real trades,” Greenidge said Adoboli told him in the meeting on the seventh floor of the UBS London office on Sept. 14 last year.
Adoboli gave them the settlement dates of the fictitious trades so the bank’s operations team could start identifying them.
Adoboli was arrested on Sept. 15 of last year after confessing to Steward in an e-mail to accruing losses during “the aggressive sell-off in the days of July and early August” as a result of the “escalation of the euro-zone crisis,” prosecutors said at the trial last week.