The Hong Kong Securities and Futures Commission (SFC) has banned a former trader from re-entering the industry for life.

Mr Jagjit Singh Dhillon traded at Credit Suisse Securities (Hong Kong) Limited and Credit Suisse (Hong Kong) Limited (collectively Credit Suisse). His misconduct concerned improper activities in two principal trading books for which he had responsibility.

The disciplinary action follows an SFC investigation that found that Dhillon, who was responsible for trading equity derivatives, took various steps to cover up the losses and the real level of risk exposure in his trading books between 8 and 17 May 2012. He filled the trading books with fictitious trades and other spurious market data.

Dhillon’s conduct led to an overstatement of profits and an understatement of risk exposure, resulting in Credit Suisse having to make negative adjustments of US$5.4 million to the cumulative monthly profit and loss figures for its trading books on 18 May 2012, and recalculate the level of risk exposure recorded in its risk management systems.

Dhillon also provided his supervisors with false information when they first became suspicious of the activities in his trading books.

The SFC says that Dhillon’s conduct was intentional, dishonest and serious. It is the dishonesty that rankles most.

Dhillon was licensed under the Securities and Futures Ordinance to carry on Type 1 (dealing in securities), Type 2 (dealing in futures contracts) and Type 7 (providing automated trading services) regulated activities.  His licence was revoked when he left Credit Suisse on 9 June 2012. He is no longer licensed by the SFC.

The SFC referred the matter to the police in June 2012. Dhillon was arrested by the police and holding charges were laid against him. The holding charges were withdrawn in May 2013 due to lack of co-operation from key witnesses and Dhillon left Hong Kong immediately.