Trader jailed for covering up losses

Former banker concealed HK$239m loss at RBS in what judge calls an 'extremely serious offence'

PUBLISHED : Saturday, 14 September, 2013, 12:00am
UPDATED : Saturday, 14 September, 2013, 4:15am

A former bank trader has been jailed for four years and two months for hiding up to £19.5 million (HK$239.1 million) in investment losses after her efforts to portray her crimes as mild in comparison with those of Nick Leeson and other rogue traders cut no ice with the judge.

Shirlina Tsang Pui-yu, 42, earlier pleaded guilty to one count of fraud. She inflated profits and diminished losses at the Royal Bank of Scotland between mid-2010 and October 14, 2011, so as to cover up the shortfall in her bond transactions.

Judge Garry Tallentire said it was an "extremely serious offence" as the bank suffered huge damage. "Your act has prevented the bank from having full knowledge of the loss," he said in the District Court yesterday.

In pleading for leniency, Tsang's lawyer had cited a number of rogue traders - including Leeson of Britain, Japanese-American Toshihide Iguchi and Frenchman Jerome Kerviel - as references for the judge. All had caused their employers massive investment losses.

In the most serious case, Leeson's unauthorised trading in the Singapore office of Barings investment bank led to losses of £827 million in 1994 and brought down the 233-year-old institution.

Leeson was jailed for 6-1/2 years. Iguchi and Kerviel were jailed for four and three years, respectively.

Tallentire decided these cases did not help Tsang much. He noted that all the cases were different in their backgrounds, compensation and sentencing jurisdictions.

The defendant could not put all the blame on the system, the judge said. "You should [apply] more supervision on yourself," he said. He also noted that the HK$1.05 million bonus Tsang had returned to RBS was too small compared with the bank's losses.

The judge took into consideration that she was depressed after her brother's death in 2010 and suggested she see a pscyhologist in prison.

The court earlier heard that since July 2010, Tsang had recorded false details of bond trading, such as naming a party who had not agreed to a trade and keying in the wrong price. Her supervisor, while reviewing Tsang's records on October 13, 2011, discovered that she had been keeping false records. She was dismissed the next day.

RBS later found the bonds she held had caused losses of £19.5 million. If the bank had made the discovery earlier, it would have taken steps to prevent further losses, the prosecution said.