A British stockbroker who tried to hide £42 million in unauthorized trades by pointing the finger at a hedge fund has been sentenced to two-and-a-half years in prison.
Jonathan Bunn gave his bosses at Lewis Charles Securities the names of the traders he said were counterparties to the short-sales when queried about the trades last year. But the firm checked with the hedge fund the brokers were supposed to be working for—and the hedge fund had never heard of them.
The counterparties listed on Bunn’s trading slips also said they had played no part in the trades, leaving Lewis Charles with a £2.67 million loss on an unmatched short position in HSBC Holdings shares.
When confronted, Bunn admitted his misdeeds, and pleaded guilty to false accounting in May.
Lewis Charles said it was forced to lay off a dozen employees and cut salaries by 20% because of the losses suffered in Bunn’s trades.