Anshul Rustagi, a stock trader of Indian origin who operated on behalf of the Deutsche Bank here, has been dismissed for allegedly overstating his profits by 30 million pounds.
Rustagi, an award winning former student of Indian Institute of Management was dismissed by the bank after facing disciplinary charges. He was working for the bank since June 2004.
Rustagi, 26, was reportedly dealing in a market for securities known as collateralised debt obligations, or CDOs. He dealt largely in iTraxx indices - derivatives that reflect a basket of credit default swaps.
A colleague, managing the desk while Rustagi was on holiday, reportedly discovered the losses.
The bank's trading volumes in iTraxx indices reportedly doubled in the past year, as have those of many other banks, which hedge and bet on the likelihood of corporate bond issuers defaulting.
As first revealed in The Times, Rustagi was suspended after allegedly overstating profits on his own book.
Although no client seemed to have lost money in the alleged incident and the probe is not criminal, FSA, the financial services regulator has been informed.
Rustagi was said to be a brilliant student at IIM, where he was runner-up in the 'Leaders in Making' award. He graduated in 2003. He was also reported to be a 'star pupil' of the Springdales School in New Delhi.
{{/usCountry}}Rustagi was said to be a brilliant student at IIM, where he was runner-up in the 'Leaders in Making' award. He graduated in 2003. He was also reported to be a 'star pupil' of the Springdales School in New Delhi.
{{/usCountry}}Rustagi was told to stay away from his office last month while an internal inquiry was carried out into the 'alleged embellishment of his performance'.
By overstating profits, a trader would not be able to personally benefit but reports say that a trader could qualify for a much bigger end-of-year bonus. The bank said it was not treating the matter as a criminal fraud but has reported it to the Financial Services Authority.