SFC Bans Jagjit Singh Dhillon for Life essay sample

Haven't found the essay you need?

We can write it for you. On time. 100% original.

Order Now
Text Preview



Trading in the securities market exchange has mainly been between two parties. Rarely, do these two parties benefit simultaneously. In most cases, almost in all, one party losses while the other gains. However, the investments made through this market usually help investors earn the return from their investments. Players in the financial market, in an effort to make maximum profit, may seek to unfairly influence the decisions of other players to their advantage. This is a turn that can jeopardize the markets if not curbed. Players in the securities exchange market, like Mr. Jagjit Sign Dhillon who negligently or knowingly misguided the decisions of other players, so that their decisions are favorable to themselves at the expense of the interests of those other players, should be disengaged from the market henceforth besides being punished upon discovery.

Facts about the case

Mr. Dhillon was a player in the market because he was a trader in that market. That is, he was an equity index trader who was licensed to credit Suisse Limited and credit Suisse Securities Limited. They collectively were identified as Credit Suisse between 9th June 2012 and 30th may 2007. The mere action of being in the market of Mr. Dhillon willingly, impliedly indicated that he had accepted the responsibility of reasonable care over other traders (Tatiana,2006). The other fact is that Mr. Dhillon did knowingly in two major trading books failed to reveal the actual level of risk exposure for the securities he was expected to trade. Mr. Dhillon was responsible for trading equity derivatives that related to three indices. They included Heng Seng China Enterprises Index (HSCEI), the Hang Seng Index (HIS) and the Korea composite Stock Price Index (HSCEI) that were recorded in two principle books of trading. Mr. Dhillon acted dishonestly and as a result caused direct losses to the company. (D.L.A., 1998).

The legal and compliance issues involved

Mr. Dhillon acted in several dishonest ways or at least ways that were in themselves negligent. They included:Failure to update prices in the systems or entering incorrect prices: The usual routine was that traders were required to report transactions in their trading books into its risk offices and update market prices in the official system. In several instances, he failed to make this update. This led to the use of outdated prices in estimating profits and losses (Stefano, 2010).

Booking of fake trades and subsequent cancellations: During the period of his tenure he entered fake trades for listed options and features. He later canceled them before their settlement day. This disguised the level of market risk for those securities (Bingxin, 2011).

Transferring profits to his books from other books: He in several instances switched transactions between other traders and his own to conceal the losses he had made thus far.

The above-discussed misconduct of Mr. Dhillon resulted in the overstatement in profits and an understatement in the level of risk exposure and worse, he caused credit Suisse to incur a loss of $ 5, 400,000. …

Download Full Essay Show full preview


Samples available at the Examples Assignment Lab are for inspiration and learning purposes only. Do not submit any sample as your own piece of work. Every essay belongs to students, who hold the copyright for the content of those essays. Please, mind that the samples were submitted to the Turnitin and may show plagiarism in case of the secondary submission. Examples Assignment Lab does not bear any responsibility for the unauthorized submission of the samples.