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Former OCBC dealer allegedly made unauthorised trades to keep his job

SINGAPORE — In trying to keep his job at OCBC bank after the company learnt about his bad credit status, a treasury adviser allegedly made a number of unauthorised foreign exchange trades in his customers’ accounts to earn profits.

SINGAPORE — In trying to keep his job at OCBC bank after the company learnt about his bad credit status, a treasury adviser allegedly made a number of unauthorised foreign exchange trades in his customers’ accounts to earn profits.

Lu Chor Sheng, 40, is accused of committing 163 offences under the Computer Misuse Act. He was also charged with two counts of cheating by personation, one count of using a forged document, and 10 counts of converting benefits from his criminal conduct into foreign currencies.

He pleaded guilty to 47 of the charges in October, but is now disputing the amount of losses that OCBC incurred.

Court documents showed that Lu — who worked eight years as treasury adviser — was said to have allegedly caused the bank close to S$3.2 million in losses, as his actions had gone undetected over two years.

However, the amount was disputed on Thursday (Dec 13) by his lawyer Ramesh Tiwary, who told the court that the sum should be S$810,000.

Lu will return to court on Jan 8 for another hearing, and a pre-trial conference has been scheduled on Jan 17 to resolve the dispute.

In mid-2012, the bank’s human resource officers spoke to Lu about his credit status after noticing that he had numerous outstanding credit facilities with other banks. His outstanding debt of about S$200,000 to S$300,000 was accumulated from football betting and stock investment losses dating from 2004.

Lu then approached Mr Tan Tiong Lin, a friend of about 25 years, to incorporate two new sole proprietorships under his name to set up business accounts with OCBC for foreign exchange investments.

At his instruction, Mr Tan set up D2D Exchange and Rubik-Cube Investment, with Lu having control of the companies’ bank accounts.

Lu also got Mr Tan to pre-sign cheques belonging to the two companies, lying to him that they would be used to place collaterals with the exchange or broker.

At his request, Mr Tan also pre-signed letters of instruction to OCBC — to credit any profits into the bank accounts of D2D and Rubik or debit losses from them — so that Lu could submit instructions on his behalf.

Deputy Public Prosecutor (DPP) Nicholas Khoo said that Lu then allegedly placed unauthorised foreign exchange trades using the accounts of these two companies at off-market rates, generating higher profits by buying lower and selling higher, which would not be possible if he had squared the trades with traders as required.

As a result, D2D and Rubik made profits of more than S$1.2 million.

After D2D and Rubik realised the profits, Lu reportedly placed new trades in the accounts of other customers — including Garmco, Lipico Technologies and Ideacity Agents Ltd — to hide the unauthorised trades. He then closed off the outstanding unauthorised trades at the same rates with no profit and loss impact to the customers when the market moved to the previously executed off-market rates.

When the market did not move to the rates executed, the outstanding unauthorised trades were forwarded to the customers’ accounts, and this continued until the trades could be closed off at no profit or loss, or forwarded to Rubik or D2D to reap the profit.

Lu deliberately chose the accounts of customers with whom he had a close relationship, so that he could call and inform them that erroneous trades were placed in their accounts and that they would be reversed, DPP Khoo said.

Ordinarily, treasury advisers are only allowed to enter foreign exchange trades when they receive instruction from customers, usually via the phone.

Of the S$3.2 million Mr Khoo claimed were OCBC’s losses, the bulk — close to S$2.4 million — was from the account of Ideacity Agents. Losses from Garmco’s account amounted to more than S$575,000, while Lipico Technologies’ account saw losses of more than S$187,000.

DPP Khoo also said that there were S$46,787 in losses incurred when Lu cancelled outstanding forward foreign exchange contracts.

Lu’s actions only came to light in August 2013 — two months after his resignation — when another OCBC treasury adviser told Garmco that its foreign exchange forward line had hit its limit, but the company denied having any outstanding deals.

An internal investigation found that Lu had executed close to 200 unauthorised trades in OCBC’s trade dealing system between January 2011 and June 2013. OCBC later filed a police report.

Lu’s cheating by personation charges came about because, after he resigned, he asked Mr Tan to call the OCBC Treasury Desk to impersonate his former customers, in order to close off fraudulent trades he had placed in the customers’ accounts without authorisation.

For cheating by personation, he could be jailed up to five years, and/or fined.

For converting the benefits from his criminal conduct into foreign currencies, he could face another jail term of up to 10 years, and/or be fined up to S$500,000.

For each charge of modifying the contents of a protected computer without authorisation, he could be jailed up to 20 years and fined up to S$100,000.

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