UBS rogue trader loss less than crisis damage, UK court told

Mon Oct 15, 2012 2:39pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Sarah White and Estelle Shirbon

LONDON (Reuters) - UBS's UBSN.VX losses in the financial crisis dwarfed a $2.3 billion hit from a rogue trading scandal last year and caused longer-lasting damage, lawyers for accused fraudster Kweku Adoboli said in court on Monday.

Adoboli's lawyers have so far argued at his trial that he believed he was trading for the good of the bank, and that colleagues had turned a blind eye to his practices.

In a fresh tack on Monday, lawyers questioned Tom Naratil -- chief financial officer at UBS and the most senior executive to appear as a witness -- on the impact of other losses and probes on the Swiss bank and its share price.

Adoboli, 32, who was arrested in September 2011, is on trial at Southwark Crown Court accused of fraud and false accounting. He denies the charges.

Charles Sherrard, representing Adoboli, said UBS lost close to 50 billion Swiss francs ($53.53 billion) because of the financial crisis and its share price fell almost 80 percent between January 2008 and the day before the trading loss was uncovered in September 2011.

Naratil, appearing via videolink from New York, said that UBS's share price dropped 10 percent when the $2.3 billion loss was announced and had recovered eight days later.

Despite this recovery, Naratil said that the impact on UBS had been material.

"A double-digit decline in the stock price in a single day is a significant event," Naratil said.   Continued...

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