Former bank chief banned by SFA over fake deals: Lapse from 'standards of integrity' results in pounds 25,000 fine
RONALD THURLOW, a former deputy general manager of Den Norske Bank's London office, has been struck off by the Securities and Futures Association and fined pounds 25,000 plus pounds 2,700 costs for making fictitious deals to cover up trading losses.
The SFA said yesterday: 'Mr Thurlow has clearly failed to observe the high standards of integrity and fair dealing that are required.
'He is no longer fit and proper to be registered by SFA in any capacity and has therefore been removed from the registers.'
Mr Thurlow, 56, is one of the City's leading experts on Scandinavian stocks. The SFA's action has in effect ended his career in the City.
His assistant, Steven Royce, has been fined pounds 10,000 plus pounds 1,975 costs and has been severely reprimanded. Both Mr Thurlow and Mr Royce agreed to leave DNB soon after the discrepancies were discovered two years ago.
Mr Thurlow joined DNB from Schroders in 1989 and was given responsibility for the bank's equity trading and market-making functions in Norwegian securities.
In July 1992, DNB discovered that Mr Thurlow had recorded 51 fictitious deals between October 1991 and July 1992 to hide positions that were in excess of the limits imposed by DNB's management.
False purchases or sales were recorded in DNB's records and deal tickets written alleging transactions with certain Norwegian counterparties.
The deals were later cancelled or reversed in DNB's books after a convenient time, according to the SFA. 'On occasion the counterparty was aware of the transaction but it was cancelled on the following day,' it said.
The effect of the non-existent deals was to understate positions in the books of DNB temporarily so that the management was unaware of the real facts, namely that limits were being exceeded and losses were imminent. Mr Thurlow extended his scheme with 11 sale and repurchase deals in the same period for similar reasons.
The SFA said that although Mr Royce helped to carry out the fictitious deals, he 'was relatively inexperienced and relied very closely upon the guidance and training provided by Mr Thurlow'.
Consequently, the association had decided not to remove his registration.
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