Deutsche Bank has dismissed a London-based credit derivatives trader it accused of overstating profits on his trading book, following a disciplinary hearing, a source close to the situation said today.
But Anshul Rustagi, 26, who traded complex financial instruments known as synthetic collateralised debt obligations (CDOs), has a right to an appeal. This has yet to be heard.
Rustagi, who was reported to have overstated profits by some £30m sterling over a two-month period last year, left the bank following a disciplinary hearing last Tuesday, the source said. The overstatement was discovered when the trader went on holiday and a colleague took over his trading book.
Rustagi was listed as inactive from 11 January, the day after his hearing, on a Financial Services Authority register of individuals falling under its regulatory jurisdiction.
Deutsche Bank has an appeal process in place for all such cases, but it was not known when that might go ahead, the source said. Deutsche Bank said it had no comment.
Synthetic CDOs are portfolios of credit default swaps, or insurances against non-payment of corporate debt, that can be sliced into tranches to enable investors to take large risks for a small upfront cost.
Deutsche, Germany's biggest bank, runs one of the largest synthetic CDO books in the booming credit derivatives market, which has grown from almost nothing to around $12 trillion in the past five years.
