A $150m fraud allegedly attempted by a former fund manager at Threadneedle Asset Management is linked to a trade in more than a billion Argentinian warrants by former staff at Otkritie, the Russian financial services group.
Threadneedle confirmed on Tuesday that a former trader had been dismissed in August after attempting an allegedly “suspicious trade” that had triggered in-house alarms and had become part of a wider City of London police investigation.
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article.
According to those familiar with the case, earlier in the summer Otkritie had contacted a Threadneedle employee about a large trade in Argentinian warrants set up by a number of Otkritie employees.
Otkritie, which is part owned by VTB, Russia’s second-largest lender, is now embroiled in a lawsuit with several of its former executives, which is expected to come for a preliminary hearing before the High Court next month.
The trader at Threadneedle has been named as Vladimir Gersamia, who worked as an emerging market bond fund manager at the London-based group until the alleged incident involving the Argentinian warrants.
The trade was stopped and Mr Gersamia was dismissed.
Threadneedle, the asset management European arm of Ameriprise, the US financial services group, reported its suspicions to the Financial Services Authority and the City of London police.
Threadneedle confirmed: “In August 2011, our systems stopped a suspicious attempted trade. The matter was immediately reported to the authorities and the individual involved was subsequently dismissed.” It said no client money was lost.
Mr Gersamia could not be reached for comment.
The City of London police said on Wednesday it was investigating the attempted fraud at Threadneedle as part of “a wider criminal investigation into a suspected $150m trading fraud”. The police said a 32-year-old-man in October who was not an employee of Threadneedle had been arrested “on suspicion of fraud by false representation” in connection with the probe.
Alexey Karakhan, deputy chief executive of Otkritie said: “All this happened a year ago, and while it is never pleasant to be the victim of a sophisticated fraud, in this case no client money has been lost and our group’s financial strength is unshaken.
“We are pleased that we have already succeeded in freezing nearly two-thirds of the funds [involved] and we are confident that we will recover the rest.”
George Urumov, a former head of fixed income at Otkritie, was arrested by the City of London police in October last year. He was released on bail and has not been charged. He denies any wrongdoing and will seek to establish his innocence in the courts, a spokesman said.