NEW YORK, Feb 6 (Reuters) – A former foreign exchange salesman at J.P. Morgan Chase & Co. has been arrested for making unauthorized trades that resulted in a $6 million loss for the bank, prosecutors said on Monday.
Terrence J. Gumbs, who worked for the bank for 17 years and for nine years on its New York foreign exchange desk, faces one count of wire fraud for selling about 385 million euro on behalf of a client without the client’s permission, according to a criminal complaint unsealed on Monday.
A lawyer for Gumbs could not immediately be contacted. A spokesman for J.P. Morgan said Gumbs was fired when the unauthorized trades were discovered.
According to the complaint filed in U.S. District Court in Manhattan, Gumbs, 36, entered a limit order to sell about 385 million euro in the bank’s computer system on behalf of a client on Dec. 29, 2005. J.P. Morgan’s Tokyo desk executed the transaction on Jan. 3, 2006.
Gumbs later told investigators he made the trade in an effort to offset $300,000 in earlier losses, according to the complaint.
The Connecticut resident faces a maximum of 20 years in prison and a fine of $250,000, or twice the amount gained or lost by the commission of the fraud, whichever is greater.