That anodyne description headed what prosecutors yesterday said was a confession to 30 months of reckless gambling on the markets by the 32-year-old to try to make good snowballing losses that threatened to topple the Swiss bank and were created by his thirst for an ever-increasing bonus.
An hour before his email arrived, Mr Adoboli, a director on UBS's City trading floor hitherto considered one of its brightest and best, had abruptly left the office leaving a note to say he had an appointment to see a doctor.
The financier was indeed in need of advice. But a jury at Southwark Crown Court in south London heard that it was a lawyer rather than a medic whose counsel Mr Adoboli, of Whitechapel, east London, required.
Over the previous four weeks, the trader had been fielding a series of fraught calls from William Steward, a chartered accountant in UBS's London headquarters, who was trying to reconcile unbalanced entries and "other oddities" in Mr Adoboli's accounts on the bank's "double entry" auditing system.
Initially, just as he had done on numerous occasions before, the eloquent financial whizz successfully offered a convoluted explanation that all was well and his trades in a niche financial product known as exchange-traded funds (ETFs) were sufficiently hedged – or counterbalanced by opposite deals of a similar value – to keep UBS and its shareholders safe.
But Mr Steward kept encountering discrepancies and gaps in Mr Adoboli's records. In particular, on 14 September the trader was unable to offer the names of the "counterparties" or buyers for trades which the accountant could see had exposed UBS to losses of billions of pounds.
Jurors heard yesterday that nearly two and a half years of allegedly fraudulent trading by Mr Adoboli, a system of false accounts, and an unauthorised slush fund said to have been used to conceal potential losses that at one point reached £7.4bn had "crashed like a car hitting a wall at high speed".
In the opening line of his email, prosecutors said, the trader confessed that the ETF trades – deals in bundles of stocks, bonds or commodities that are traded as a job lot – queried by Mr Steward were a fiction.
He wrote: "Dear Will, it is with great stress that I write this mail. First of all, the ETF trades that you see on the ledger are not trades that I had done with a counterparty as I previously described."
Over the following paragraphs, the court heard that Mr Adoboli in effect acknowledged he had flouted his bank's rules and lied to colleagues to conceal losses that eventually amounted to £1.4bn.
The trader, with an apparent slip, concluded: "I take full responsibility for my actions and the stilt [sic] storm that will now ensue. I am deeply sorry to have left this mess for everyone and to have put my bank and my colleagues at risk. Thanks, Kweku." By the time of his arrest the following day after meetings with UBS managers that lasted until 2.30am, Mr Adoboli's painstakingly constructed financial fortress of investments outwardly based on shrewd analysis of global events and market behaviour had been revealed to be built on a quicksand of unhedged gambles and contrived deals to cover subsequent losses, the court heard.
The trader, who denies four fraud charges, will claim that his actions, including the formation of a rainy day fund to offset losses, were known about by colleagues and managers, the court heard.
But Sasha Wass QC, prosecuting, said Mr Adoboli had acted alone and conducted himself as a "master fraudster" by using his knowledge of UBS's "back office" operations to manipulate its accounting system, extending the deadlines for payments, exceeding the daily trading limit of $100m and massaging away losses.
What were supposed to be carefully-controlled investments designed to increase the value of pension funds and other holdings by predicting market movements had turned into open-ended liabilities, the court heard.
Ms Wass said: "In effect, Mr Adoboli was risking the very existence of the bank by gambling its resources ultimately for his own benefit. He had ceased to act as a professional investment banker and had begun to approach his work as a naked gambler. He had become what is sometimes referred to as a rogue trader."
The well-spoken trader, who was head boy at his English public school and graduated from Nottingham University in 2003 with a degree in e-commerce and business studies, had enjoyed a meteoric rise through the ranks of UBS, which employs 63,500 people worldwide.
After joining as a graduate trainee, he started life in the bank's "back office" responsible for reconciling the deals carried out by traders.
By 2005, he had moved to the "front office" with the prospect of joining the ranks of the City's élite, who regularly pick up six-figure bonuses.
His salary that year was £33,000 plus a bonus of £7,500. By 2010, when Mr Adoboli was a director on the ETF desk, his income had increased ten-fold to a £110,000 salary and a £250,000 bonus.
The court heard that the trader's downfall had begun in October 2008 when he registered a $400,000 loss on a single trade which he explained away with a fictitious matching profitable deal. At the same time he began "off-the-book" deals which led to the formation of what he described as his "umbrella" – a shadow fund which by May last year held tens of millions of pounds.
But the court heard the umbrella ultimately could do nothing to withhold the storm that hit Mr Adoboli and UBS a year ago. Ms Wass said the trader's motivation had been simple: "He did this to increase not only the profit of the bank and, more importantly, the bonus he hoped to receive.
"When you put your life savings in a pension fund, you do not expect an investment banker to gamble it on the toss of a coin."
A slush fund was used to conceal losses that at one time amounted to £7.4bn, the court heard
Double your losses: The 'martingale'
Behind the losses attributed by prosecutors to Kweku Adoboli lay a gambling mindset known as the "martingale", the court heard.
The principle behind the gambling system is simple and – provided its user's funds are limitless – cannot fail on any two-way bet. It involves the gambler doubling his or her bet after each loss on the basis that eventually their luck will change.
For example, if a £100 bet on the toss of a coin resulting in heads is lost, the gambler simply places a £200 bet on heads and so on. Logically, heads will eventually turn up and all losses will be made good.
But in the words of Sasha Wass QC yesterday: "The trouble is that 'eventually' can be a long time coming."
The court heard that the deals and trades made by Mr Adoboli were considerably more complex than a straight martingale system but he had been sucked into a gambler's mindset and "started throwing good money after bad".
Ms Wass added: "It takes very deep pockets to continue to run such a system: pockets the size of the UBS bank. It is these pockets, these resources that Mr Adoboli was using to back his bets."
The explosive email in full: ‘I have left the office for the sake of discretion’
This is the text of the "bombshell email" that Kweku Adoboli sent to William Steward, a chartered accountant at UBS, after allegedly causing the Swiss bank to lose £1.4bn.
Dear Will,
It is with great stress that I write this mail. First of all the ETF [exchange-traded funds] trades that you see on the ledger are not trades that I have done with a counterparty as I previously described.
I used the bookings as a way to suppress the PnL [profit and loss] losses that I have accrued through off-book trades that I made. Those trades were previously profit making, became loss making as the market sold off aggressively though the aggressive sell-off days of July and early August.
Initially, I had been short futures through June and those lost money when the first Greek confidence vote went through in mid-June. In order to try and make the money back I flipped the trade long through the rally.
Although I had a couple of opportunities to unwind the long trade for a negligible loss, I did not move quickly enough for the market weakness on the back of the first back macro data and then an escalation Eurozone crisis cost me the losses you will see when the ETF bookings are cancelled. The aim had been to try and make the money back before the September expiry date came through but I clearly failed.
I have now left the office for the sake of discretion. I will need to come back in to discuss the positions and explain face to face, but for reasons that are obvious, I did not think it wise to stay on the desk this afternoon. I will expect that questions will be asked as to why nobody else was aware of these trades. The reality is that I have always maintained that these were EFP [exchange for physical] trades to the member of my team, BUC, trade support and John Di Bacco [Adoboli's manager].
I take full responsibility for my actions and the stilt storm that will now ensue. I am deeply sorry to have left this mess for everyone and to have put my bank and my colleagues at risk.
Thanks, Kweku
