The FSA’s final notice for Redmond notes that before taking out the short position, which he failed to disclose, he had been on an extended lunch hour over which he drank alcohol and the regulator believes this may have affected his behaviour, although it says he was not “visibly drunk”.
Redmond was employed as a trader on the freight desk of Morgan Stanley’s commodities division in London where he traded both freight and oil.
The regulator says that in breach of Morgan Stanley policies and procedures, Redmond built up a substantial short position in WTI Futures on the ICE Futures (Europe) web-based trading platform on February 6, 2008. He then concealed the position overnight, exposing Morgan Stanley to the risk of incurring a significant loss.
The next day, rather than informing the firm of his actions, he traded out of the position. Redmond only admitted concealing the position when directly challenged by the firm.
FSA director of enforcement Margaret Cole says: “Redmond’s conduct on 6 and 7 February 2008 showed a lack of honesty and integrity that falls short of the standards the FSA expects of approved persons. Having created a large short position which he tried to hide overnight, Redmond continued to get his priorities seriously wrong when he focused on trading out of the position rather than telling his managers. Traders must not seek to conceal their positions from their firms.”