BZW confirmed yesterday that it had sacked four traders in its New York office in January and February after discovering errors made in the first half of 1996. The bank said: "This is an isolated incident and as far as we are concerned the matter is closed." The bank said there was no evidence of personal gain or loss. The bank's losses on the errors are thought to be less than $100,000.
It is understood that there were two separate incidents where traders incorrectly completed error slips. These are forms which traders complete when there has been a dispute between the bank and the client about a particular trade.
A BZW spokesman stated yesterday that "BZW under no circumstances has or will take trading losses on behalf of clients." However, with banks needing to maintain good relationships with key clients it is thought to be reasonably common City practice to complete an error form in a clients favour when disputes arise. The incidents were picked up by BZW's compliance procedures and passed to the regulatory authorities.
SEC is specifically examining whether BZW covered certain losses in exchange for future business from favoured customers. The allegations have been made in a confidential testimony by Kate Evans, a former senior BZW trader.Reuse content