UBS internal probe focused only on accused trader

Wed Oct 10, 2012 12:49pm EDT
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By Michael Holden

LONDON (Reuters) - The head of an internal UBS UBSN.VX probe into "rogue trader" Kweku Adoboli, accused of losing the Swiss bank $2.3 billion, did not consider whether others at the bank might have been involved, a London court heard on Wednesday.

However, Ruwan Weerasekera, chief operating officer of UBS's investment arm, said two other independent inquiries had looked into all aspects of the bank's involvement and had found no complicity among the bank's managers.

Adoboli, 32, is on trial at London's Southwark Crown Court accused of two charges of fraud and false accounting, which he denies.

The prosecution say he routinely exceeded his trading limits and hid his illegal activities from the bank with fictitious trades, using an illicit "umbrella" slush fund to disguise profits from unauthorized deals.

His defense team argue he believed he was acting for the good of the bank and colleagues were aware of his activities.

Weerasekera, who led UBS's in-house investigation after Adoboli was arrested on September 15 last year, told the court his focus had been solely on the accused trader.

He said this was because an email Adoboli sent on September 14, confessing to making illegal trades and hiding his risk exposure, stated others were unaware of what he had been doing.

"My remit was to find out what happened," he said, explaining his inquiry, named Project Bronze, was to look at how the loss occurred.   Continued...

Former UBS trader Kweku Adoboli arrives at Southwark Crown Court in London September 27, 2012. REUTERS/Stefan Wermuth