This is the transcript of the email headlined “An explanation of my trades” that Kweku Adoboli sent on September 14 last year to William Steward, an accountant working in the back office, who had challenged Mr Adoboli as to why his trades did not balance.


“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 have previously described.

I used the bookings as a way to suppress the PnL losses that I accrued through off book trades that I made. Those trades were previously profit making, became loss making as the market sold off aggressively through 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 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.

These are still live trades on the book that will need to be unwound. Namely a short position in DAX futures [which had been rolled to December expiry] and a short position in S&P500 futures that are due to expire on Friday.

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 was aware of these trades. The reality is that I have maintained that these were EFP [exchange for physical] trades to the member of my team, BUC [the accounts department], trade support and John Di Bacco.

I take responsibility for my actions and the shit 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.”

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