Rogue trading at the Guernsey branch of the Bank of Bermuda caused a $1.36 million loss which was blamed on a group of investors, the English High Court has been told.

The case -- which began on Monday -- sees the bank suing Henry Fink, one of the investors who was also acting as the group's advisor, for a 400,000 guarantee which he put up on behalf of the other investors when the deal encountered trouble.

Mr. Fink is counter-claiming to have the guarantee set aside.

British national broadsheet newspaper The Guardian reported yesterday that Mr.

Justice Bell heard Mr. Fink's legal counsel Peter McMaster opening the proceedings on Monday.

The lawyer blamed unnamed persons at the Guernsey branch for disregarding the investors' instructions and instead plunging into a series of loss-making foreign currency speculations, The Guardian reported.

He said the bank itself had admitted, in an internal report, that it found no warnings in tapes of calls to Mr. Fink, that the group was "incurring substantial losses''.

Recordings of calls from Mr. Fink to the bank's chief dealer John Marquis were not always audible and the bank itself had not been able to find anything to suggest that Mr. Fink was warned the facility was running into the red.

And the internal bank report also concluded that incomplete information had been supplied to its credit committee on the matter, which Mr. McMaster said was a "very serious matter''.

He told the judge that Mr. Fink, acting for the investor group, opened a 1.5 million foreign currency trading facility with the bank in autumn 1992.

And almost immediately it did not operate according to plan.

No meaningful statements were sent to clients for two months or more after trading began and it had since become clear that the fund dived into the red very swiftly, he told the court.

And his client Mr. Fink was adamant that he ordered none of the loss-making trades and "his instructions would have produced a profit''. Mr. Fink's legal counsel said the rogue trading occurred in two ways.

Firstly the facility was not operated as had been intended which would have limited losses incurred.

And on top of that unauthorised trades also took place, worsening the problem.

Figures now available showed the facility made an initial profit of $164,000 ( 100,000) followed quickly in 1992 by a loss of $41,000 and then of $96,600.

Eventually the facility made a gross loss of $2.8 million which saw it drop $1.36 million into the red.

The case continued in court yesterday.