Investigators in Stockholm have established that Mr Archer, 24, had failed to sit an examination all traders must pass before dealing in the Swedish equity market.
He was sacked with two colleagues - members of the "Flaming Ferrari" group of traders, so-named because of their favourite cocktail - after regulators in Sweden identified attempts to distort prices on its stock market. The colleagues, Adrian Ezra and David Crisanti, were dismissed for failing to supervise Mr Archer in the dealings. It now seems, however, that his misdemeanour involved more than dubious trades conducted while unsupervised; he should not have been trading in Sweden at all.
In a statement issued in Stockholm yesterday, the exchange said the share deals made from Credit Suisse First Boston (CSFB), which had employed Mr Archer, were "entered by a trader who was not authorised to trade on the Swedish stock market."
Furthermore, Mats Wilhelmsonn, head of market surveillance at the Stockholm Stock Exchange, said the son of Lord Archer of Weston-super-Mare had been instructed by the bank not to use its trading systems to deal in Stockholm.
A senior official close to the inquiry said: "Archer was told specifically, `Don't trade in Sweden'. When they found out what he had been up to, the firm was astonished. The irony is that the trade - of about pounds 600,000 - was tiny and wouldn't have affected his bonus in any way. We can't understand why he did it."
Mr Archer is understood to have dealt in stocks of Stora, a forestry company, in an attempt to move the OMX, the Swedish Stock Exchange index, to allow him to benefit from bets on futures. The index is made up of only 30 companies, so relatively small deals can affect its overall value.
He and his fellow "Flaming Ferraris" made pounds 100m for the bank last year and were regarded as one of the slickest operations in the City. However, they fell foul of Credit Suisse when their high-living became a feature of news pages.
The Swedish exchange has now passed on its findings to its disciplinary committee, which has the power to ban CSFB for several years or fine it up to pounds 750,000.
Because the bank has co- operated fully and had instructed Mr Archer not to trade in Sweden, a fine is thought to be the most likely punishment.
For Mr Archer, however, the implications could be more serious. The disciplinary committee may pass on the case to the Swedish financial police who have the power to bring a criminal case before the courts.Reuse content