Hong Kong regulators fine RBS £450,000 over trader losses

Hong Kong regulators fine RBS £450,000 over trader losses
Securities and Futures Commission reprimands bailed-out bank for failings in internal controls that allowed trader to hide losses



Hong Kong regulators have fined Royal Bank of Scotland HK$6m (£450,000) and reprimanded the bailed-out bank for failings in internal controls that allowed one of its traders to hide losses of almost £25m.

The Securities and Futures Commission launched an investigation after being alerted to the activities of Shirlina Tsang Pui Yu by the 81%-taxpayer owned bank on a Saturday in October 2011.

Tsang was sentenced to 50 months in jail after pleading guilty in September 2013 to fraud for attempting to hide her bond trading losses.

Mark Steward, the commission's director of enforcement, said the bank had avoided a stiffer penalty because of its co-operation. "RBS acted quickly in alerting the SFC on a Saturday afternoon which in turn led to action being taken that prevented Tsang from leaving Hong Kong. This deserves substantial credit and is the reason why today's sanctions are not heavier ones," said Steward. "The SFC expects firms to report misconduct concerns immediately, as in this case," he added.

According to the judgement when she was sentenced, Tsang had worked for RBS since May 2004 and had been cancelling and amending transactions in her portfolio to hide losses. Her activities were uncovered after her supervisor reviewed the positions of traders under his supervision and found hers not showing the loss he expected.

Tsang had booked irregular trades before 7pm in Hong Kong and then cancelled or amended the entries after the RBS systems calculated the profit or loss but before any settlement with a counterparty.

As he sentenced her, the judge said: "It is to your credit and a matter of mitigation that the falsely earned bonus has been returned but that is but a small percentage of the losses the bank has suffered. I note your clear record and the achievements in your professional life before your fall from grace."

The SFC found that the internal systems and controls in the bank's emerging markets rates business were seriously inadequate and deficient.

RBS said: "We put in place a comprehensive remediation programme that strengthened our governance and supervisory oversight, and our control environment. We are pleased that the SFC has acknowledged the immediate steps we took to alert them and the significant measures taken to enhance our internal controls".

http://www.theguardian.com/business/2014/apr/22/royal-bank-of-scotland-hong-kong-regulator-fine-trader-losses


It's about time for a good hard look at banks and banking systems and a way installed of holding them to account. It's getting beyond a joke.