By Suzanne Barlyn

Dec 5 (Reuters) - A former head of the foreign currency desk at a Miami-based financial services company must pay the firm nearly $2.5 million for breaching the terms of his employment by allegedly making unauthorized trades, according to an arbitration ruling.

A Financial Industry Regulatory Authority (FINRA) arbitrator found against Ramses Villela in the case filed in 2011 by Bulltick LLC, a firm specializing in Latin American markets. The firm accused Villela of common law fraud, breaching his employment agreement and converting funds, and other misdeeds, according to the ruling dated Tuesday. The arbitrator specifically found Villela liable for breaching his employment agreement and obligations.

The case illustrates the potential risks that rogue traders pose to financial firms. Villela made the trades using the firm's credit, according to Edward Mullins, a Miami-based lawyer who represented Bulltick. "No client funds were at risk," he told Reuters.

Efforts by Reuters to locate Villela for comment were not successful. He did not respond to Bulltick's filings in the case, according to the ruling. Bulltick discharged Villela in 2011, alleging unauthorized trading, fraud, and forgery, according to a regulatory filing. FINRA, Wall Street's industry-funded watchdog, is also investigating the firm's allegations of fraud and forgery, Bulltick reported in Villela's regulatory filing. Villela claims in his LinkedIn profile to be employed at another financial company in Mexico.

The arbitrator who heard the case awarded Bulltick $2.3 million in damages. Villela must also pay Bulltick $150,000 for its legal fees and $45,000 for costs. The arbitrator did not include reasons for the decision, as is typical of FINRA arbitration rulings.

"It is unfortunate that even when there are procedures in place, there is some individual who will try to take advantage of the system," Bulltick's lawyer, Mullins, told Reuters.

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