The Financial Services Authority (FSA) has today banned Alexis Stenfors, a former proprietary trader at Merrill Lynch International Bank (MLIB), from performing any function in relation to any regulated activity on the grounds that he is not a fit and proper person.
Stenfors was employed as a senior trader on the short term interest rate trading desk of the London branch of MLIB.
He deliberately mis-marked the positions he traded on behalf of MLIB between mid-January 2009 and mid-February 2009 by around $100 million in order to avoid showing increasing losses in his books. These actions caused MLIB to make a negative adjustment of $456 million to its books and records.
Margaret Cole, FSA director of enforcement and financial crime, said:
“Stenfors actions in deliberately mismarking his positions fell far short of the FSA’s expectations. Market confidence is likely to be damaged by sudden and unexpected write downs and revaluations of securities. Financial instruments must be priced correctly by traders, particularly in more challenging conditions and when it comes to illiquid products.
“We have banned Stenfors because his misconduct was deliberate, frequent and repeated over a one month period. He was a senior and experienced trader who held a position of trust at the firm. He betrayed the trust placed in him by the firm and demonstrated that he is not fit and proper to be approved by the FSA.”
Stenfors co-operated fully with the FSA and MLIB, expressed remorse for his actions and agreed to settle at an early stage of the FSA’s investigation. For these reasons, the FSA is minded to revoke the prohibition order after five years in the absence of any new evidence that he is not fit and proper.
MLIB was fined €2.75million in October 2009 by the Irish Financial Regulator for failures in respect of circumstances that included Stenfors’ mis-marking.