Some transactions needed to be suspended 'to clarify matters', and there were 'other mitigating factors', Zuidmeer said. The process was used repeatedly to delay certain trading losses from immediately being applied to the desk’s profit-and-loss figures, he said.
Reuters reports that Adoboli's defence team have sought to show throughout the trial that he openly discussed his methods with colleagues and that rule-breaking was condoned as long as profits rolled in.
Zuidmeer denied that he had understood or approved of the true nature of Adoboli's trading.
Paul Garlick, one of Adoboli's lawyers, challenged Zuidmeer by reading out excerpts from an electronic chat between him and Adoboli dated April 26, 2011.
In the chat, Adoboli said he had made what he called a 'cosmetic adjustment' to the accounts because he had expected a revaluation of a particular trade due to the effect of foreign exchange rate fluctuations.
Adoboli went on to say that, if in fact there was no such revaluation, the adjustment should be reversed.
Under cross-examination by Garlick, Zuidmeer acknowledged that he had let pass the reference to 'cosmetic adjustments' without question or challenge. However, he denied that this showed he had known that Adoboli made fictitious entries into the books.
'Obviously with the benefit of hindsight it looks serious', he said.
UBS Controller Allowed Adoboli to Suspend $1 Billion Trade Loss
UBS trader unchallenged over "cosmetic" changes to books, court told
image: © adKinn
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