Ex-Adoboli colleague breaks down in court

Ex-UBS trader John Hughes today broke down in tears as he was shown an email sent by his former colleague Kweku Adoboli, in which Adoboli purportedly admitted he had booked trades without counterparties.

  Hughes, who has faced nearly a week of questioning as a witness in the criminal trial against Adoboli, said that it was the first time he had seen the email, which was apparently sent on September 14 last year.

 

   In the email, entitled "An explanation of my trades", Adoboli is alleged to admit to William Steward, a back-office accountant at UBS, that he had not used counterparties on trades booked on the ledger, as he had previously claimed.

   The email purportedly shows Adoboli saying: "first of all, the ETF trades that you see on the ledger are not trades that I have done with a counterparty as I previously described."

The email has already been read out as evidence in the criminal case against Adoboli, who is accused of causing a $2.3bn unauthorised trading loss at UBS. However, Hughes told Southwark Crown Court that he had not seen the email until today.

 

   Under questioning from Sasha Wass QC, on behalf of the Crown Prosecution Service, Hughes wept as he read the email. He also told the court he had not known of Steward, the email’s recipient.

Wass asked whether Hughes, prior to September 14 and the revelations of the situation UBS was facing, had "any idea of the risk created to UBS as a result" of what Adoboli allegedly admits in the first paragraph.

 

   Hughes replied he had had no idea until September 14. UBS publicly announced that unauthorised trading had taken place the following day and gave an estimate loss of around $2bn.

 

   Hughes’ emotional outburst today concluded five days of giving evidence in the trial. Under previous cross-examination, he has admitted that he had used the "umbrella" that Adoboli is alleged to have used to hide the profits and losses of his unauthorised trading. However, Hughes denied having controlled the “umbrella” or knowing how it was allegedly being used.

 

   It was also revealed last week that Hughes had reported Adoboli for exceeding his trading limit in December 2010 – but that he did not report him after he became aware of the “umbrella”, as he had felt bad after the first time.

 

   Under cross-examination, Hughes had also said he was senior to Adoboli on the London-based ETF trading desk, but denied he was Adoboli’s supervisor.

 

   Adoboli denies two counts of fraud and two of false accounting. The case continues