Friday, May 22, 2009

Drunk trader David Redmond banned after series of bad decisions

IN HINDSIGHT, perhaps it would have been better for David Redmond to have gone home instead of going back to work after a boozy lunch lasting three-and-a-half hours last February.

Upon his return the 28-year-old commodities trader at Morgan Stanley conducted a $US10 million ($12.9 million) frenzy of alcohol-inspired trades.

Mr Redmond left his office at 1.14pm and did not return until 4.41pm, apparently brimming with false confidence, the British Financial Services Authority said yesterday.

"It appears (his drinking session) affected his behaviour on his return to the office, although he was not visibly drunk," the FSA found.

Mr Redmond began placing large bets with the bank's money on the future cost of freight, The Australian reports.

He seems to have "panicked when he realised at some point after 5.04pm" that he was trading under the influence of alcohol and tried to dig himself out of trouble with a barrage of new trades, spending 1 1/2 hours making an average of one trade every 7.5 seconds.

The FSA analysed the key strokes needed to place the orders showed that it was deliberate and not simply an accident such as leaning on the keyboard, The Guardian reports.

He went home with this tangle of new positions still outstanding, woke up the next morning with a hangover, and realised he might have ended his career by drastically exceeding the trading and credit limits permitted by the bank.

The FSA was not impressed he went to work and secretly traded out of the positions without informing his superiors, This Is Money reports.

"Redmond continued to get his priorities seriously wrong when he focused on trading out of the position rather than telling his managers," the FSA said, .

"Traders must not seek to conceal their positions rather than telling their managers."

Mr Redmond was eventually sacked by Morgan Stanley.

Yesterday he was banned from trading for two years by the FSA. It is the first time the regulator has suggested alcohol might have led to serious misjudgment on a trading floor.

The FSA's director of enforcement, Margaret Cole, told The Daily Mail: "Redmond's conduct showed a lack of honesty and integrity that falls short of the standards the FSA expects of approved persons."

Despite this further humiliation, Mr Redmond has one consolation. After all the trades he had made were unwound, he had made his former employer a profit.,27753,25520832-5012426,00.html

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