Liquid lunch and a £10m bet costs London trader his living

Photo / Herald on Sunday

David Redmond is no doubt still rueing the day he decided to flee the pressures of work for a few hours to enjoy a boozy lunch. The former Morgan Stanley trader was banned from the City by the Financial Services Authority yesterday for his post-lunch actions: a two-hour trading frenzy that saw him run up an unauthorised £10m bet on the oil markets.

Redmond, who has already been fired from his job, "showed a lack of honesty and integrity" by trying to conceal his drunken trades and failing to admit to his bosses what he had done, the FSA said.

On the day in question, in February last year, Redmond returned to work at about 4.45pm after a three-and-a-half hour lunchbreak. He then spent more than two hours building a position in oil futures - placing a trade, on average, every 7.5 seconds - which exposed Morgan Stanley to a potential loss of £10m, significantly above his trading limits.

Aware that his bets were unauthorised, Redmond, now 28, transferred some of the trades to an unknowing colleague's account before going home. He returned to work the following day to close out the positions - ironically making a small profit in the process.

It was only when managers at Morgan Stanley challenged his behaviour that Redmond admitted what he had done, though even then he did not confess to the attempts he had made to conceal his trading. He was suspended and subsequently dismissed by the bank for gross misconduct.

The FSA ruled that Redmond should not work in the City for at least two years, though it accepted he had acted out of character and he was trading with Morgan Stanley's money, rather than on clients' accounts.

"He drank alcohol over lunch and it appears this affected his behaviour on his return to the office, although he was not visibly drunk," the regulator said in its report. "Mr Redmond's instinctive reaction to hide his position, to seek to trade out of it himself and not to report it or seek assistance shows a serious lack of judgement."

- THE INDEPENDENT