Do you have to fake it to make it ?
Reuters reports that former UBS CEO Oswald Gruebel pushed bank staff to take more risks when he took charge in 2009 but, as a senior manager told the London trial of alleged 'rogue trader' Kweku Adoboli on Tuesday, controls were also heightened to limit potential losses.
Responding to a question from the defence, which argues that management promotion of risk in pursuit of profit contributed to the 32-year-old Adoboli running up exposures that cost UBS over $2bn, manager Phillip Allison said: 'There was never any question of a diminution of risk control. The known risk in the bank went up, and the focus on it also went up'.
Allison also told the court: 'If a bank does not take risk, it is extremely hard to make money. That is what our jobs are. And we take risk'.
And Bloomberg reports that Adoboli told Damien Byrne Hill, a lawyer at Herbert Smith who represented the Swiss bank, that his colleagues on the exchange-traded funds desk were aware of fake trades from May, though they didn’t know the extent of his positions.
Hill’s notes from the discussion with Adoboli, read out by a prosecutor at the trial Tuesday, indicated that while his colleagues were 'unhappy' about the trades, they didn’t alert managers.
'I f----d up', Adoboli said he told the other traders, according to the lawyer’s notes. 'I’m trying to make it a bit better'
And former colleague John Hughes said he felt Adoboli resented him 'grassing him up'. Adoboli was 'told off' by his line manager after being reported by Hughes in December 2010.
But Hughes told the trial that because of the way the incident had soured their relationship he decided not to report him for a second time, in June 2011, when he realised he had again broke a daily trading limit.
'I went to a school where people didn't grass', said Hughes.
'I should have reported him. Still to this day I wish I had done. We wouldn't be here today. They'd have fired him', Hughes said.
Hughes was dismissed as a result of the trading scandal.
Have something to tell us about this article?