A former OCBC treasury adviser who pleaded guilty to rogue foreign exchange trades is now disputing how much losses he caused. Instead of $3.1 million, he claims the sum involved is around $810,000.
Over more than two years, Lu Chor Sheng, 40, allegedly made unauthorised foreign exchange trades in the bank's system, using bank client accounts.
He was accused of committing 40 offences under the Computer Misuse Act, two other offences involving cheating by personation, as well as five offences related to acquiring, possessing, using, concealing or transferring the benefits of criminal conduct. He pleaded guilty to the charges in October, but is now disputing the amount of losses that the bank had suffered.
According to earlier court documents, Lu was said to have caused the bank about $3.1 million in losses, but yesterday, his lawyer Ramesh Tiwary said the sum was around $810,000 instead.
Lu gained about $1.2 million from the trades and used them to buy foreign currencies.
According to the prosecution, in 2012, OCBC's officers spoke to Lu about his credit status. He had a debt of about $200,000 to $300,000 from football betting and other stock investment losses.
To ensure that his job at OCBC was not jeopardised, Lu decided to place unauthorised trades in his customers' accounts to earn profits, the prosecution added.
Lu approached his friend, Mr Tan Tiong Lin, to incorporate two sole proprietorships, D2D Exchange and Rubik-Cube Investment, and set up business accounts with OCBC for foreign exchange investments. Lu was said to have had control of the bank accounts, pre-signed cheques and pre-signed letters.
Treasury advisers are allowed to enter foreign exchange trades only when they receive instructions from customers, and must check for existing market rates with bank traders before entering deals. Internal checks showed Lu did neither.
In August 2013, an OCBC client had trouble making foreign exchange trades as the account had hit a limit. A check found three outstanding trades placed by Lu under the client, without the client's knowledge.
Lu executed close to 200 unauthorised foreign exchange trades between January 2011 and June 2013, resulting in "significant losses to the bank", an internal probe found.
The prosecution said Lu placed trades in D2D and Rubik's accounts at off-market rates such that they could buy lower and sell higher to generate larger profits. This would not have been possible if he had settled the trades with traders as required.
After the firms realised their profits, new trades were placed in other customers' accounts to hide the earlier ones. Lu would find ways to close customers' accounts with no profit or loss.
Lu was asked to resign from OCBC and left in June 2013, but prosecutors said there were occasions when he instigated Mr Tan to impersonate clients to place transactions even after he had left the bank. In August 2013, OCBC filed a police report.
While the defence disputed OCBC's losses yesterday, Deputy Public Prosecutor Nicholas Khoo said this figure was not challenged earlier in October when Lu initially pleaded guilty and agreed to a statement of facts. The case will be heard again at a later date.