Stockbroker jailed for unauthorised trading

A City stockbroker has been jailed for two-and-a-half years after he cost his employer nearly £3 million having made a number of unauthorised trades.

Jonathan Bunn, who worked at Lewis Charles Securities (LCS), was sentenced at Southwark Crown Court, after pleading guilty to four charges of false accounting as he attempted to try and hide a £42 million deal to short HSBC.

Bunn, who was hired in March 2009 to match buyers and sellers of securities, was not allowed to use the firm's capital to trade, but he broke these rules in July after making a number of unauthorised sales which left LCS holding a short position of more than four million HSBC shares.

City of London Police said he then submitted four fraudulent share purchase slips to give them impression that the sales had been matched by buyers, before taking the next day off.

Bunn then increased the short position to almost seven million shares, and when he finally told LCS it was forced to buy back the 7 million HSBC shares at a higher price, costing the firm £2.67 million.

The FSA were notified of Bunn’s activities and shortly afterwards referred the matter to the City of London Police, who immediately launched a criminal investigation. In November 2009 detectives arrested the trader at his Weybridge home.

DS Simon Russen, from the City of London Police’s Economic Crime Directorate, said: 'This was an experienced trader who breached the trust of his employer. But for their prompt reactions, this reckless dealing could have ruined their business.

'A sentence of this size will hopefully be a deterrent to anyone else who considers embarking on such high risk gambling with someone else’s money.'