The Financial Services Authority (FSA) has banned Jonathan Bunn, a former inter-dealer broker at Lewis Charles Securities (LCS), from performing any function in relation to any regulated activity on the grounds that he is not a fit and proper person.
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 Inter-Dealer Broker (IDB) desk. Bunn 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.
Between 22 July and 30 July 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 £2.7 million.
Margaret Cole FSA director of enforcement and financial crime said:
“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.”
Background
- The Final Notice for Jonathan Bunn.
- The FSA regulates the financial services industry and has five objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; fighting financial crime; and contributing to the protection and enhancement of the stability of the UK financial system.
