July 08, 2010 18:26 PM
Bursa Malaysia Reprimands Dealer Representative For False Trading
KUALA LUMPUR, July 8 (Bernama) -- Bursa Malaysia Securities Bhd publicly reprimanded, imposed a fine of RM100,000 and ordered to strike off Lee Beng Huat a commissioned dealer's representative (CDR) with Kenanga Investment Bank Bhd, from the Register for false trading and market manipulation.
In a statement, it said Lee had carried out false trading and market manipulation in his dealing activities in the shares of Axis Incorporation Bhd of approximately 41 million shares out of the market turnover of 104 million Axis shares for 87 trading days in 2006-2007.
During the said period, Lee had dealt in Axis shares predominantly through the accounts of 10 clients (10 Accounts).
The statement said he had entered buy and sell orders which were manipulative in nature and led to false or misleading appearance of active trading in, or market for, Axis shares and this tantamounted to stock market manipulation.
The breach by Lee, among others, involved entry of orders by Lee which were several bids lower than the last done price with no real intention to have the buy orders matched.
Lee also engaged in order splitting, entering a series of buy orders in succession through any one of the 10 Accounts with the same price which gave rise to, and created an impression, of continuous demand for Axis shares which led to false or misleading appearance of active demand/market for Axis shares.
Therefore, the buy and sell orders executed in the 10 Accounts had cross trades which were matched among each other for approximately 12 million units of Axis shares involving Lee as their common CDR in carrying out dealing activities in Axis shares in their accounts.
By engaging in False Trading and Market Manipulations, Lee managed to sell about 72 per cent (or 40.98 million out of 56.67 million units) of the sell orders entered for the 10 Accounts and bought 55 per cent (or 41.6 million out of 76.14 million units) of the buy orders.
The higher volume and percentage of the buy orders, which were subsequently cancelled and/or lapsed due to the orders being lower than the market/last done price resulting in lower percentage of buy orders matched, not only gave an impression of and created an inflated demand for Axis shares but also led to a false or misleading appearance of active demand/market for Axis shares.
-- BERNAMA
http://www.bernama.com/bernama/v5/newsbusiness.php?id=511931
Showing posts with label Rogue trader. Show all posts
Showing posts with label Rogue trader. Show all posts
Thursday, 8 July 2010
Friday, 6 February 2009
Three breeds of rogue trader
Three breeds of rogue trader
The most effective traders, says Hugo Pound, managing director of management consultants RDI, tend to be disciplined, innovative and brave. They enjoy challenges and pushing boundaries. Unfortunately, that profile also fits a different breed of trader – the rogue, writes Tom Drew.
Pound is a psychologist, and part of his job is to weed out potential troublemakers from top banks’ new recruits: “The problem is that after some success, they realise that there is more personal reward available through fraud than they can ever achieve through the system.”
He says fraudulent traders can be divided into three psychological profiles:
The cover-up artist has been playing double or quits and keeps on losing, “so they carry on digging a deeper and deeper hole … in the hope that they will sort themselves out”.
And the benevolent rebel breaches boundaries set by an employer or government authority because he believes that, eventually, it will all come good.
Using Pound’s definitions, Nick Leeson was not a rogue trader at all, but a cover-up artist. As such, Pound thinks he was treated harshly, absorbing most of the blame for a bank whose systems and controls had failed. Jérôme Kerviel, apparently driven by a desire for corporate profit, not personal gain, falls into the benevolent rebel category. “I personally don’t have any experience of traders who have knowingly stepped over the boundary for their own benefit,” says Pound.
He believes it is difficult to measure the incidence of benevolent rebels because much of the time they are successful and stay unnoticed – or are even rewarded. “Banks don’t want to reward the safe traders because they’re not the ones who make the money. So it’s very difficult to get a line between rewarding real, brave [workers] and the people who go too far.”
http://www.ft.com/cms/s/2/2d78785c-e755-11dd-aef2-0000779fd2ac.html
The most effective traders, says Hugo Pound, managing director of management consultants RDI, tend to be disciplined, innovative and brave. They enjoy challenges and pushing boundaries. Unfortunately, that profile also fits a different breed of trader – the rogue, writes Tom Drew.
Pound is a psychologist, and part of his job is to weed out potential troublemakers from top banks’ new recruits: “The problem is that after some success, they realise that there is more personal reward available through fraud than they can ever achieve through the system.”
He says fraudulent traders can be divided into three psychological profiles:
- the rogue trader,
- the cover-up artist, and
- the benevolent rebel.
The cover-up artist has been playing double or quits and keeps on losing, “so they carry on digging a deeper and deeper hole … in the hope that they will sort themselves out”.
And the benevolent rebel breaches boundaries set by an employer or government authority because he believes that, eventually, it will all come good.
Using Pound’s definitions, Nick Leeson was not a rogue trader at all, but a cover-up artist. As such, Pound thinks he was treated harshly, absorbing most of the blame for a bank whose systems and controls had failed. Jérôme Kerviel, apparently driven by a desire for corporate profit, not personal gain, falls into the benevolent rebel category. “I personally don’t have any experience of traders who have knowingly stepped over the boundary for their own benefit,” says Pound.
He believes it is difficult to measure the incidence of benevolent rebels because much of the time they are successful and stay unnoticed – or are even rewarded. “Banks don’t want to reward the safe traders because they’re not the ones who make the money. So it’s very difficult to get a line between rewarding real, brave [workers] and the people who go too far.”
http://www.ft.com/cms/s/2/2d78785c-e755-11dd-aef2-0000779fd2ac.html
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