Ex-Bankers Trust Trader Cleared of Fraud

A judge has dismissed charges brought by the Federal Reserve against a former Bankers Trust trader related to massive derivatives losses suffered by several of the bank’s customers in the early 1990s. Guillaume Fonkenell was accused of falsifying records to increase his trading profit on a deal with Procter & Gamble and of fraud for helping to hide the risks of derivatives transactions on which two Indonesian firms lost about $100 million. “Fonkenell has not been proven to have violated any law, rule or regulation, or to have engaged in any unsafe or unsound banking practice,” Administrative Law Judge Walter Alprin ruled. Disputes over the losses rocked Bankers Trust, which was acquired last year by Deutsche Bank, when they came to light in 1994. The Federal Reserve declined to comment on the ruling.

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