Jury Is Told Ex-UBS Trader Was Made a Scapegoat for Bank\'s Woes

LONDON â€" Kweku M. Adoboli, a former UBS trader in London, was made a scapegoat for major problems at the Swiss bank, a jury was told on Friday.

Mr. Adoboli, 32, is accused of causing a multibillion-dollar trading loss at the Swiss financial giant, and the prosecution has portrayed him as an “arrogant” investment banker who sidestepped the rules whenever it suited him.

During his closing arguments on Friday, Charles Sherrard, Mr. Adoboli's lawyer, said the allegations represented a “character assassination” that failed to highlight the role of UBS' management in condoning his trading activity.

Despite several scandals at the Swiss bank, including a $780 million settlement in 2009 to settle tax evasion charges in the United States, Mr. Sherrard said UBS's management had singled out his client to be held accountable for the firm's previous wrongdoings.

“He has had to bare the brunt about what has been going on at UBS,” Mr. Sherrard told t he jury in London on Friday. “He has been blamed for redundancies, the share price fall and reputational damage.”

Mr. Sherrard added that UBS' actions were representative of a banking industry that was driven solely to make money and that put pressure on traders to make massive profits.

“Senior management are never to blame,” Mr. Sherrard added.

UBS is not a defendant in the case, and is not permitted to comment on criminal cases, according to British law.

Mr. Adoboli is charged with six counts of fraud and false accounting in connection with a $2.3 billion loss at the Swiss bank. If convicted, he could face more than 10 years in prison. He has pleaded not guilty to the charges.

During almost five hours of closing arguments on Friday, the defense rebutted accusations that Mr. Adoboli acted alone to create false trades and hide losses between 2008 and 2011.

Mr. Sherrard told the jury that several layers of UBS's management knew abou t the former trader's activities, but did not stop him because he was earning profits for the Swiss bank.

Mr. Adoboli joined UBS in 2003 and rose quickly to work on the Delta One desk, a plain-vanilla version of derivatives trading. Traders in the unit create investments that track specific financial assets, like a basket of company stocks.

He is accused of creating false trades to hide his trading losses, which he concealed from colleagues, according to the prosecution. To hide his trades, Mr. Adoboli created separate accounts, which he called his “umbrella,” to handle the profits and losses from his unauthorized activities.

The defense said Mr. Adoboli's activities were well-known in the bank, and that his supervisors condoned his actions because they proved to be so profitable.

Mr. Adoboli's team earned an $8.8 million profit in 2010, Mr. Sherrard told the jury on Friday. That figure rose to $52 million for the just second quarter in 2011. In o ne day, the former UBS trader's unit posted a $6 million profit, the jury was told.

“The next level of supervisors knew much of what he was doing,” Mr. Sherrard said. “For almost three years, everyone basked in his glory.”

While Mr. Sherrard acknowledged that his client had lied to UBS officials before coming clean in September, 2011, he said Mr. Adoboli had been buying time to recoup his losses. The former trader also initially said he was solely to blame to protect his colleagues, the jury was told. Later, Mr. Adoboli said others at UBS had been aware of his actions.

The defense also responded to accusations that Mr. Adoboli acted alone. Mr. Sherrard told the jury that members of his client's team used the so-called umbrella to cover their trading activity.

The prosecutors are “trying to desperately portray this man as a rogue trader,” the jury was told on Friday. “The minute you see that the whole desk was working as a team,” the pr osecution's case falls apart, Mr. Sherrard added.

The defense countered claims that Mr. Adoboli had gambled with UBS's money to gain promotion and financial rewards for himself. Mr. Sherrard read excerpts from the former trader's UBS evaluations, which portrayed him as hard-working, humble and a teamplayer.

The defense said these glowing reviews during the period when Mr. Adoboli was carrying out his trading activity debunked accusations that he was only driven by profit.

“The notion is absurd,” Mr. Sherrard said.