Rogue trader sacked at Credit Suisse

Credit Suisse, one of the world's largest banks, has sacked one of its traders for allegedly amassing hundreds of millions of pounds worth of unauthorised positions in the options market. The bank moved to dismiss Philip Penner, who is believed to have been working for its client management department, after he confessed to the trades earlier this month.

An internal investigation is now under way to discover how Mr Penner could have taken the positions on options without the full authorisation of his employer.

The Securities and Futures Authority, the top City regulator, has been informed of his dismissal. A regulatory source said yesterday: "I can confirm that we have received a report that he was dismissed for not rectifying his position. His registration [with the SFA] has been suspended as a result."

The alleged unauthorised trading at Credit Suisse follows a series of high profile scandals, that include the rogue trading by Nick Leeson which led to the collapse of Barings and by Peter Young, a fund manager at Morgan Grenfell, part of Deutsche Bank. Mr Young set up a series of dummy companies in 1995 and 1996 to conceal his activities, which eventually cost Deutsche up to pounds 400m.

In 1995, Barings, one of the UK's oldest merchant banks, collapsed after it admitted losses of up to pounds 800m caused by Leeson, who is currently serving a six-year jail sentence in Singapore.

It is believed Credit Suisse managed to contain the losses to less than pounds 10m by liquidating the positions immediately after Mr Penner admitted his unauthorised activities to senior staff.

A spokeswoman at the bank said: "[Mr Penner] has left the firm. The situation is that this has been brought to the attention of the regulator. We believe that he is currently being investigated." She declined to say in which area of Credit Suisse's operations Mr Penner worked or how long he had been there, and would not elaborate on the precise nature of his unauthorised activities.

Sources said yesterday that Mr Penner had been authorised to take a position of up to pounds 40m in FT-SE options. However, he was subsequently told to liquidate them.

But apparently unbeknown to the bank, Mr Penner did not adhere to the liquidation instruction and allegedly continued to extend his positions - betting on future stock market movements - to the extent that by the time he owned up, the bank's exposure ran to hundreds of millions of pounds.

The Credit Suisse spokeswoman refused to comment on suggestions that the extent of the bank's exposure ran to at least pounds 400m or that the unauthorised trading took place while Mr Penner was officially on holiday last month. Mr Penner could not be contacted for comment.

Richard Farrant, chief executive at the SFA, said: "[Credit Suisse] appear to have operated very efficiently in this instance and have acted with prompt dispatch." He confirmed that an initial report on the bank's immediate steps had been sent to the regulator and that the SFA was waiting for a second report into how the unauthorised trades could have taken place.

Credit Suisse is one of the leading financial services groups in the world, employing more than 10,000 staff in 30 countries. The organisation, with headquarters in Zurich, is capitalised at more than $7.2bn (pounds 5bn).

The company is split into four main business units, including worldwide private banking, corporate and investment banking as Credit Suisse First Boston, asset management for institutions and a division catering for Swiss corporate and individual customers.

In 1996, a Credit Suisse bond salesman, David Santangelo who concealed a loss believed to be around $6m (pounds 4m) from a client was fined pounds 25,000 by the SFA.