What Is a Rogue Trader?

Rogue traders are traders in Western financial markets who trade on behalf of institutions without authorization. The actions of these rogue traders have caused huge losses to financial institutions, and in the end they have to escape legal sanctions. In September 2011, a rogue trader at UBS AG in Switzerland was reported with an estimated loss of $ 2 billion.

Rogue trader

April 1992: Multiple banks and brokers in India were charged with illegally conspiring to withdraw $ 1.3 billion from the interbank securities market, prompting a substantial increase in the stock exchanges of the Bombay Stock Exchange (BSE). The main defendant in the scandal, Harshad Mehta, died in prison during the trial.

February 1995: Barings, one of Britain's oldest investment banks, goes bankrupt because its Singapore-based futures trader Nick Leeson lost $ 1.4 billion in derivatives trading. Risson was jailed in Singapore and Barings was subsequently sold to ING for a pound.

September 1995: Daiwa Bank of Japan suffered a loss of $ 1.1 billion after the bank's U.S. executive Toshihide Iguchi carried out an unauthorized bond transaction. Tokui Iguchi was jailed in 1996.

June 1996: Sumitomo Corporation in Japan suffered a loss of US $ 2.6 billion over 10 years due to unauthorized copper transactions. This loss was mainly due to chief trader Yasuo Hamanaka. Sumitomo Corporation fired Hamamatsu Tainan, who was once known as "Mr. 5%" because the trading team under his leadership was considered to control 5% of global copper transactions. Then Binzhongtai male was sentenced to 8 years in prison.

March 1998: Joseph Jett, a former bond trader at investment bank KidderPeabody, was accused of fabricating $ 350 million in false profits to conceal losses and failed to keep proper records, the scandal eventually led to the bank's sale. Jette was sentenced to pay $ 8.2 million in damages in September 2007 and was fined $ 200,000.

January 2001: ScottSzach, former chief financial officer of the now-defunct investment company GriffinTradingCo, is accused of embezzling more than $ 556 million from a corporate bank account and transferring it to a brokerage trading account Go and conduct unauthorized transactions in the 18 months before the company went out of business.

February 2002: AlliedIrishBank claims that rogue trader John Rusnak scammed $ 691 million from its US subsidiary Allfirst. Rasnak subsequently admitted that he had designed a plan that earned him $ 850,000 in salaries and bonuses between 1997 and 2001, and was sentenced to 7 and a half years in prison.

March and April 2006: Hedge fund AmaranthAdvisorsLLC suffered a loss of $ 6.4 billion, these losses came from natural gas contracts on the New York Mercantile Exchange (NYMEX). Subsequently, the US Commodity Futures Trading Commission (CFTC) sued AmaranthAdvisors and its former chief trader BrianHunter, alleging that it was trying to manipulate natural gas futures prices.

July 2006: David Bullen and Vince Ficarra, former Forex options traders at National Australia Bank, were jailed. The two exposed scandals in 2004, costing the bank 252 million Australian dollar (about $ 187 million). The court found the two guilty, claiming they had conducted false transactions to protect their bonuses and conceal losses, and they were jailed with other former Australian National Bank traders such as Luke Duffy and Gianni Gray Serve a sentence.

February 2009: Alexis Stenfors, a former senior trader at Merrill Lynch in London, was temporarily banned from trading activities for a period of at least 5 years because he intentionally High valuations of its trading positions to conceal losses have forced Merrill Lynch to write down $ 456 million.

May 2009: David Redmon, a former Morgan Stanley (MS) trader, was barred from trading because he had established a large, unapproved crude oil futures position and concealed it Pile transactions.

June 2009: Steve Perkins, a London-based trader of crude oil brokerage firm PVMOilFutures, conducts a series of unauthorized transactions, causing the company to lose nearly $ 10 million, and these transactions are considered Is the main cause of rising global crude oil prices. Subsequently, Perkins was banned from engaging in trading activities.

April 2010: Evan Dooley, an employee of MFGlobal, a US futures and options broker, was charged with fraud and other charges. His speculative activities on wheat futures contracts in February 2008 brought the company 141 million The dollar is losing money. The incident came to light in December 2009, when US regulators fined MFGlobal with a fine of $ 10 million for slack management.

October 2010: Jerome Kerviel, a former trader at Societe Generale (13.04, 0.04, 0.31%) (GLE), was sentenced to three years in a Paris court because it was linked to a trading scandal. At the same time, he was ordered to return 4.9 billion euros (about $ 6.7 billion) to Societe Generale. Kewell was 33 years old in 2010. His charges include breach of trust, computer misuse and counterfeiting, all of which have been convicted.