ASIC Bans Jeremy Kaviraj Nambiar over False AUD/USD Trades Made to Hide $1M loss

The investigation alleges Mr. Nambiar entered over 100 fictitious trading entries including off-market trades that created the false appearance of

asicThe Australian Securities & Investment Commission (ASIC) announced today that it has banned a former Sydney trader, Jeremy Kaviraj Nambiar for a period of 8 years from providing financial services, after an ASIC investigation discovered he had allegedly created a series of fictitious trades as well as a falsified document.

One period reference in the investigation was between 2009 and 2010, when Mr. Nambiar, of St. Ives, New South Wales, was employed at Westpac Institutional Bank to trade on a range of financial products including foreign exchange and cross-currency swaps on behalf of Westpac, according to the description in the ASIC circular.

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No Clients Affected, Nambiar Didn’t Profit as Trades Were for Bank’s Own Book

During his time at Westpac, the ASIC’s investigation found that Mr. Nambiar entered more than a 100 fictitious trading entries including off-market trades that created the false appearance of profit, known as wash trades. The press release explained that ASIC found that some of the fictitious trading entries were created to conceal a spot foreign exchange loss of more than $1 million in the AUD/USD currency pair.

Approximately $17.6 million was written off from the income statement of Westpac’s financial statements for the period ended 31 March, 2011, as a result of Mr. Nambiar’s conduct, according to the press release, which added that Mr. Nambiar did not personally benefit from the trades, and how the trades were internal to Westpac and how no customers were affected.

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Perhaps these were mitigating factors that lessened the severity of the ban handed down from ASIC, making it only 8 years as opposed to a permanent ban for example. The story as disconcerting as it may be, draws parallels from the 1999 UK blockbuster movie “Rogue Trader,” based on the real-life character Nick Leeson whose fictitious trades were blamed on the demise and eventual bankruptcy of Barings Bank in the U.K. in 1995.

Falsified Email at Nomura Was Likely to Mislead Staff

In 2010, Mr. Nambiar started work at Nomura Australia Ltd. as an associate in its fixed income division. It was found that in 2011 while employed at Nomura, Mr. Nambiar created a false email purporting to be from an external broker containing broker quotes. It was found that the email was likely to mislead Nomura staff.

Mr. Nambiar has the right of appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision. He was described in the document as being employed at Westpac from February 4, 2008 to August 11, 2010, and at Nomura from August 23, 2010 to March 29, 2011.

Westpac and Nomura assisted ASIC in its investigation, and according to ASIC Commissioner Greg Tanzer, who explained in the official press release: “ASIC will continue to protect the public and maintain investor and consumer confidence by taking action against people in the industry who disregard their obligations.”

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