Are "Duties of Fidelity" Causing Harm?

As most of you know by now, former UBS trader Kweku Adoboli is on trial right now for a $2.3 billion trading loss which he conducted without authorization. On November 8th, the closing arguments were heard for both the prosecutors adn the defense, and it seemes that the alleged charges of "off-book, unhedged, and concealed" trades have "detailed and technical evidence from wtinesses" to back them up. However, I think there is more to this than meets the eye.

In this article, Adoboli's side is given a fair look as well. Adoboli claims he wasn't a rogue trader, and that his reckless behavior was known to colleagues and at times even encouraged.The troubling part is that even if this were true, there is a lack of evidence-- not because it isn't there, but because the culture, or "machine," of the bank prevents witnesses from coming forth. Thus, corrobations of his story cannot occur.

Yesterday, Ms Wass called a final witness to unpick that bit of the defence. Jamie Howard, an employment lawyer for UBS, pored over the terms of employee contracts. He said that during or after their employment UBS staff were free to give evidence in criminal proceedings, even though their contract includes a duty of fidelity not to say anything derogatory about the bank. Mr Adoboli says UBS “gagged” potential defence witnesses.

I would love to know how one can simultaneously offer evidence in criminal proceedings with this underlying "duty of fidelity." Not only are there no measures to prevent inevitable backlash against those who do the right thing, (not saying there are such witnesses in this specific incidence, but just generally speaking) but what does "derogatory" mean? If an employee steps to the plate and admits that there was awareness and encouragement of Adoboli's behavior, would he be being derogative by calling UBS a bunch of crooks? Food for thought.

On the other hand, Adoboli hasn't helped himself either. He lied to accountant William Steward to "buy himself time." He lied in an email where he confessed to acting alone. He also lied to UBS's own investigators. However, the problem still remains that if he, or any other suspect in a similar case, is indeed innocent, then a culture of secrecy would kill their chances at freedom.

There is no doubt that the trades caused tremendous losses to UBS and its clients, and that Adoboli conducted them. The question is whether the "machine" at the firm is working its power to place the blame solely on him, rather than diluting it throughout the firm and hurting its image. It's much easier to say that there was a rogue trader than to continue to embody the stereotype of greedy financiers. What do you guys think of this case?