The Financial Services Authority has fined a former executive from Toronto Dominion Bank $1.2 million for intentionally mispricing trading positions in credit derivatives to cover his losses and banned him from working in the financial services industry.

According to the UK securities watchdog, Nabeel Naqui, former head of the European and Asia-Pacific credit products group at TD, tried to cover up his losses on trading credit default and other contracts.

“Over this period Naqui persistently mismarked his trading book in order to overstate his performance and took steps to ensure that this was not detected, providing deliberately altered quotes to those conducting an independent valuation of Toronto Dominion's trading positions," the FSA said in a statement.

Naqui’s fine is among the largest given by the FSA to individuals this year for market abuse, say legal experts. The FSA last year fined Toronto-Dominion $11 million for repeated systems and controls failures after it was forced to cut earnings by about $95.4 million in 2008 because of the mispriced derivatives. In July, the bank settled a U.K. lawsuit against Naqui, in which he was accused of incorrectly pricing.

Naqui was suspended in June 2007 and fired six months later for “gross misconduct.” When TD sued Naqui last year seeking $4.9 million to recoup his bonuses and the cost of its investigation into his activities he admitted that he did not use the quotes for credit default swaps he received from broker-dealers. Instead, he used higher valuations because he felt the contracts were worth more. TD only discovered the pricing errors when Nacqui’s book of business was passed to another trader.

“We cooperated fully with the FSA in its investigation and we think it is appropriate that Mr. Naqui is being held accountable,” said Matthew Fortier, a spokesman for TD in Toronto. “Mr. Naqui’s actions and behavior did not reflect the strong risk culture at TD Securities and we were deeply disappointed that our controls were circumvented.”