Threadneedle Asset Management’s trading
desk has averted a disaster many large banks proved unable to prevent, catching
a potential rogue trader before he was able to cause harm.
The London-based asset manager has revealed
its risk management systems were triggered after identifying a “suspicious
Emerging market bond fund manager Vladimir
Gersamia was dismissed from Threadneedle after the incident.
City of London police are now investigating
the alleged failed rogue trading attempt, which happened in August. Police said
the inquiry was part of a wider criminal investigation of a suspected US$150m
UK watchdog the Financial Services
Authority (FSA) is also thought to be investigating the matter, although a
spokesperson would not confirm the regulator’s involvement.
For actions which could involve criminal
conduct, police criminal proceedings take precedent over FSA regulatory action.
Threadneedle, the European asset management
division of US financial services group Ameriprise, said no client money was
lost in the rogue trading attempt.
The incident marks one of few publically
known successful preventions of a rogue trading incident in recent years.
Last October, UBS revealed internal
controls were failing as far back as December 2010, following an investigation
into the US$2.3 billion loss wrought by alleged rogue trader Kweku Adoboli.
In January 2008, rogue trading activity
cost French bank Société Générale €4.9 billion when Jérôme Kerviel, a trader
responsible for vanilla futures hedging at the bank, executed unauthorised