Two former foreign exchange (forex) traders who used the names of family members to set up trading accounts to cheat their respective banks with bogus US dollar trades were yesterday sentenced to jail.

Former HSBC senior dealer Ivan Chng Kian Wee, 48, was jailed 15 weeks while former Deutsche Bank spot trader Toh Hway Khuan, 51, was jailed eight weeks.

The pair, who had pleaded guilty in January, are the first to be convicted of offences under the Securities and Futures Act relating to fraudulent forex trades.

The two cases are unrelated but both men used the same method - using their respective banks' accounts to trade with themselves, at rates favourable to themselves instead of their employers.

It meant they bought currency at a rate that was lower than the prevailing rate or sold currency at a rate that was higher than the prevailing rate.

In November 2009, Chng made wrongful gains of about $230,000 from 149 trades with a total transactional value of US$778 million.

In the same month, Toh carried out 39 trades amounting to US$257 million and made about $140,000 in wrongful gains.

Prosecutors sought six months' jail for Chng and three months' jail for Toh, while the defence argued for fines.

Justice See Kee Oon said deterrent sentences are justified but noted there was no discernible market impact or significant damage to the banks' reputation.

Chng had opened an account with now-defunct brokerage MF Global in June 2006 in his wife's name.

He placed his personal orders using this account, instructing his broker on the exchange rate and quantity of currency he wanted to buy or sell.

After the orders were accepted, Chng would use HSBC's account - used to trade on behalf of the bank and its customers - to enter an opposite order at a similar rate and quantity to match his personal order.

Toh used a similar modus operandi with an account he set up, also at MF Global, in November 2006 - using the names of his brother and sister-in-law.

Chng and Toh did not disclose these accounts to their employers, even though internal rules required them to obtain prior approval for personal trading accounts, said Deputy Public Prosecutor Muhamad Imaduddien.

Toh's lawyer, Mr Lee Teck Leng, said his client has issued a cheque to the Accountant-General to disgorge his wrongful gains. Chng had to work as an Uber driver after being fired from HSBC, said his lawyer Thong Chee Kun.