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Former Deutsche FX Trader Sentenced for Fraudulent Activity

An Australian court has sentenced former Sydney-based Deutsche Bank FX options and futures trader Andrew Donaldson to 18 months imprisonment after he pled guilty to falsifying entries in Deutsche’s internal financial records and systems.

Donaldson pleaded guilty to one charge of using his position dishonestly with the intention of directly or indirectly gaining an advantage for himself, however the sentence was fully suspended and he was released on his own recognisance with a condition to be of good behaviour for two years and a security sum of AUD 10,000.

The Australian Securities and Investment Commission (ASIC), which originally investigated Donaldson, says that between 25 July 2013 and 25 June 2014 Donaldson made a total of 85 false entries into Deutsche’s internal records. By making these entries, he was falsely representing to the bank that he had made substantial profits of more than AUD 31 million from his trading in financial products, including US Treasury Note Futures.

As detailed in the agreed facts on sentence, the direct or indirect advantage that Donaldson sought to gain by recording these false transactions was to falsely increase his recorded profit, and to mask his actual trading losses. He was then potentially able to meet his annual revenue budget, be eligible for larger incentive payments, and promote himself to a prospective employer.

As the entries related to trades that were fictitious and never executed in the market, no external parties were affected, says ASIC. At the time Donaldson’s conduct was detected by Deutsche and reported to ASIC, the bank also conducted an investigation into its relevant processes and controls to identify weaknesses and notified ASIC of the measures it believed would better monitor and detect such conduct in the future.

“Dishonest use of position in the financial services industry, in order to gain a personal advantage, threatens the integrity of our financial markets, says ASIC commissioner Cathy Armour. “ASIC will continue to take regulatory action to address this type of misconduct.”

Colin Lambert

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