FSA bans former broker for £2.7m fraud

21 May 2010 0:00 am | Updated: 21 May 2010 1:10 pm | By Nicole Blackmore

The FSA also referred Bunn to the City of London Police for investigation into suspected criminal offences arising from his conduct.

Bunn was employed as a broker at LCS on the IDB desk. He was permitted to trade on behalf of IDB clients on a ‘matched basis’. Bunn was not authorised to take proprietary positions on behalf of LCS.

The FSA says between July 22 and July 30, 2009, Bunn deliberately entered into several unmatched trades which gave LCS a short position of 6,950,000 HSBC shares.

He concealed this position by writing out false deal slips designed to mislead the LCS back-office into thinking that his sales were ‘matched’ and that LCS did not have a position in the shares.

Despite being challenged over several days, he continued to assert that the trades were genuine.

By the time the fraud was discovered and LCS had closed-out the short position, the firm had lost almost £2.7m.

FSA director of enforcement and financial crime Margaret Cole says: “Bunn undertook unauthorised trades which exposed LCS to a significant market risk. His behaviour was both deliberate and dishonest in creating fraudulent deal-slips to circumvent the firm’s systems and controls.

“Such behaviour is woefully short of that expected of approved persons and will not be tolerated. The FSA will not only take action itself but will continue to work with other agencies to ensure the right overall outcome is achieved in the public interest.”

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