WA's version of Nick Leeson was behind bars last night after the District Court was told of hidden options dealings that triggered the closure of Perth broking firm Hogan and Partners.
Former Hogan options chief Jonathan Kur will be sentenced tomorrow morning after spending more than three years creating false reports and computer entries that deceived key clients and his bosses at Hogan.
Hogan closed it doors in December 2008 shortly after Kur quit the firm and disclosed trades and computer trickery that was supposed to ultimately benefit three once-wealthy clients from Botswana.
As his secret activities were unravelled, it emerged that these clients had lost more than $7.4 million. Also, Kur had consistently but secretly been on the wrong side of the market as it rallied through 2006 and 2007.
Kur was before Judge Allan Fenbury for sentencing yesterday after pleading guilty to three fraud charges and one count of dishonestly using his position as a Hogan employee.
In pushing for Kur to be given a substantial jail term, prosecutor Fiona Reading said he precipitated Hogan's closure and had exposed it to substantial legal actions.
Ms Reading said he had manipulated data in the firm's computers in a way that would have made discovery of his activities quite difficult.
To get around margin restrictions on the Botswanan accounts, the court was told he put trades in the names of other clients with the Australian Securities Exchange then disguised this in Hogan's records.
It seems the crunch came in late 2008 when Hogan decided to move its options activities to a platform offered by E*Trade. Hogan director Eve Broadley said in a statement she would have realised Kur's arrangements within days of a changeover.
His lawyer Sam Vandongen said that when the options dealer started falling behind, he believed he could catch up with his intelligence and ability.
"His undoing was that his confidence did not match reality," Mr Vandongen said.
The lawyer said Mr Kur was not motivated by financial gain but by getting returns for his clients.
When Judge Fenbury said the case had some similarities to Nick Leeson's, Mr Vandongen said he could not say because he had only read newspaper reports. Mr Leeson, a former star trader, spent four years in jail in Singapore after playing a major role in bringing down Barings merchant bank in 1995.
Judge Fenbury remanded Kur in custody and warned he would get a jail term.