The Australian Securities and Investments Commission (ASIC) announced today that Andrew Donaldson, a former FX options and futures trader at Deutsche Bank in Australia, has been sentenced to 18 months imprisonment in the District Court in Sydney after pleading guilty to forging entries in the bank’s internal financial records and systems.
Specifically, Donaldson pleaded guilty to one charge of dishonestly using his position with the intention of self-gain either directly or indirectly. Although he was sentenced to 18 months imprisonment, his sentence was fully suspended.
According to the statement from Australian regulator, Donaldson was released on his own recognizance with a condition of two years worth of good behavior. He must also pay a security sum of $10,000. As a result of his conviction, Donaldson is not permitted from managing corporations for five years until February of 2024.
The sentencing follows on from ASIC permanently banning Donaldson from providing financial services after: “finding that he had contravened a financial services law, that his conduct was extremely serious and that ASIC had reason to believe that Mr Donaldson was not of good fame and character.”
Donaldson Portrayed Large Trading Profits to Deutsche Bank
Between July 25, 2013, until June 25, 2014, Donaldson made a total of 85 false entries into Deutsche Bank’s internal records when he was working with the firm as an FX, options, and futures trader based in Sydney.
In these fraudulent entries, Donaldson incorrectly portrayed to Deutsche Bank that he had made profits of more than AU$31 million ($21.95 million) from trading in financial products such as US Treasury Note Futures.
The self-gain that Donaldson was trying to achieve from his falsified entries was to increase his record profit and to cover up his actual trading losses. Furthermore, ASIC insinuates that by doing this, he would then have been able to potentially meet his annual revenue budget, which could lead to larger incentive payments and a promotion.
Commenting on the misconduct, ASIC Commissioner Cathie Armour said: “Dishonest use of position in the financial services industry, in order to gain a personal advantage, threatens the integrity of our financial markets. ASIC will continue to take regulatory action to address this type of misconduct.”
The fraudulent entries that Donaldson submitted were fictitious and were never actually executed in the market. As a result, although he acted illegally, no external parties were affected by his actions.