Rogue trader jailed for losing £3m

A rogue City trader was jailed for two-and-a-half years today after he admitted covering up trades that lost his firm nearly £3m (€3.64m), triggering a dozen redundancies and pay cuts across the board.

A rogue City trader was jailed for two-and-a-half years today after he admitted covering up trades that lost his firm nearly £3m (€3.64m), triggering a dozen redundancies and pay cuts across the board.

Jonathan Bunn, 31, a former inter-deal broker with Lewis Charles Securities (LCS), brought the firm "to its knees" by placing unauthorised trades and then hiding his activities by writing out false deal slips designed to mislead back office employees.

Judge Geoffrey Rivlin, the Honorary Recorder of Westminster, told Bunn: "You were not stealing your company's money but you were gambling with it in a very reckless and dishonest manner."

The judge said Bunn's actions were a "very serious breach of trust" and added: "I think I can fairly say that as a result of your very serious misconduct you have certainly made a very significant contribution to bringing this company, at least temporarily, to its knees."

Bunn was a gambler who owed £60,000 (€72,909) to an online spread-betting company, Southwark Crown Court in central London was told.

He took up a short position equal to 6.95 million shares in HSBC and then lied to LCS by saying he had hedged the trades, insisting that his position was genuine, the court heard.

Bunn, who made £500,000 (€607,576) for LCS and £300,000 (€364,545) commission for himself in just five months at the firm, thought the HSBC shares were overpriced and took a gamble on the price dropping, the court was told.

He then filled in four deal slips to hide the fact he had taken this position.

But the HSBC share price "went up and up and up" and Bunn's gamble "spiralled out of control" as he continued to sell more in a vain bid to average the position out.

David Levy, for the prosecution, said Bunn caused losses of £2,557,026 (€3,107,143) through the deals and a further £322,000 (€391,275) in associated costs.

His actions also caused 12 staff to be made redundant as the firm's profits plummeted and it lost contracts as a direct result of the bad publicity surrounding the case, Mr Levy said.

The remaining staff also suffered 20% salary cuts across the board in a bid to keep the company going.

Gregory Fishwick, defending Bunn, said: "Of course, there was an element of greed in that he wanted to make the commission."

But the profits from the gamble would have been in the tens of thousands, rather than in the hundreds of millions, of pounds.

Bunn's success as a broker was "propping up" LCS and he did not want to admit to his bosses that he had effectively become a failure, Mr Fishwick said.

"He was not a man who was desperate to make a quick buck," he said.

"What started off as a much smaller offence grew beyond his control."

Bunn, who was banned from working in the finance industry by the Financial Services Authority (FSA) in May, admitted false accounting between July 22 and July 24 last year.

He was also thrown out of his home in Weybridge, Surrey, by his wife, and is currently staying which his parents in Manchester, the court heard.

Bunn carried out £38m (€46.18m) of unauthorised trades, Mr Levy, of the CPS's central fraud group, said.

"Bunn went well beyond his authority when he gambled with his employer's reputation and money in the hope of bumping up his commission," he said.

"Today he is paying the price for his actions.

"It is clear he knew exactly what he was doing when, motivated by greed and personal gain, he carried out unauthorised trades worth around £38m (€46.17m)."

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