There Are More 'Rogue' Traders Out There Than You Think
More in BUSINESS NEWS
back-up- Don't Be Fooled - Firms Are Hiring
- Analysts Predict More Asset Writedowns At Top Firms
- Janus, JPMorgan, Merrill Lynch, Morgan Stanley, UBS, Wachovia
- Top Firm 'Could Bleed To Death Slowly'
- Has Cityboy Finally Lost The Plot ?
- Lying On CVs Is On The Increase
- Cazenove, Citi, Credit Suisse, Goldman, Hedge Funds
- Fidelity, Macquarie, Jefferies, Royal Bank of Scotland, Schwab, Wachovia
- Best Graduate Recruitment & Development Programme Awards - The Qualifiers
- Bodean's BBQ Competition - The Winners
- Welcome To Our Firm - You're Fired!
- Top Firm's Board Urged To Break-Up The Empire
- Click Here To Register For Free News E-Mail Alerts
- Merrill Pay Ruck, Grounds Private Jets To Save On Costs
- Pandit Or Thain - Who's Doing The Best Job ?
- Time To Get Things Into Perspective..........
- Graduates - Lambs For The Slaughter
- BofA Comes Good, Hedge Fund Killing, Bonuses
- JPMorgan, Bear, Barclays, Dresdner, Aberdeen, HSBC
- The Credit Crunch Christmas Party
- Worried About Being Laid-Off ? Don't Be - Here's Why...
- Firms Signing Up For Free Access To Global Candidate Database
- You've Gotta Sing This - Probably The Best Market Ditty Ever
- Hedge Funds Bag New COLOSTOMY Product
- The CDO Song
- CDOs - The Complicated Song
- Market Meltdown - Video Nasty
- A Few Good Men 'Cost Control' Video
- Give Me A Job - The Most Amazing Job Application Ever
- The 'H-E-D-G-E' Song
- So, What Exactly Is 'Subprime Lending' ?
- 'I Got Laid Off & It Hurt Like H.ll'
- His Phone Rang & We Knew He Was Toast
- The Bear Stearns Golfing Song
- Is Your Firm 'In Vogue' In This Credit Crunched World ? (Updated)
- Good As Goldman ?
- Merrill Posts Big Loss, More Writedowns Expected
- Deutsche's Boss Has Been At It Again
- Thain Gets Testy As Merrill Writes Down Another $9.75bn
- Yabba-Dabba-Doo! It's The Finkstones (BlackRock On Top)
- Possibly The Most Daring Trade Of All Time ?
- Doubts Over Pandit, Trouble At Deutsche, RBS & UBS
- BNP Could Buy Dresdner, Credit Suisse Boss Defends 'One Bank'
- Big Boss Goes - Another One Bites The Dust
- The Latest On The Market Turmoil
- US Regulators To Clamp Down On Spread Of False Rumours
- Fortune's Top 25 Banks / Securites Firms By 2007 Revenue
- The Top 12 Completed M&A Deals
- Job Co.k-Up Causes Right Old Stink
- The Art's Gone, The Jet's Gone - It's All Gone
Related Content
- Societe Generale Rogue Trading Report (24/05/2008)
- Mother Puts Foot Down As Hedge Fund Rogue Gives Himself Up (03/07/2008)
- Traders On A Train With Boris Johnson (09/05/2008)
- Old Traders Didn't Gripe, Sue, Cross Dress Or Take Dr.gs (03/05/2008)
Only last week, Here Is The City was tipped off about another rogue trader ( who worked for one of the well known investment banks), who parted company with the firm last year, after it was discovered that he had been mispricing his asset book for around 12 months. He is thought to have racked up losses of up to $30m before he was outed - not in the same league as Leeson or Kerviel, but no small matter nevertheless.
The problem is, of course, that traders are under pressure to perform as never before. And they are eternal optimists - have you ever heard of a trader taking a punt that he thought would lose ? And, despite excellent compliance, audit and risk measures, it will always be difficult to quickly identify a trader determined to hide exactly what he is doing - especially if he has some help from colleagues.
But what happens when a firm uncovers a 'rogue' trader ? Well, that depends. If a material amount has been lost, there is a duty to disclose (as SocGen did). It might be necessary to advise market regulators or the central bank. But it might not. If the loss has been localised, and it is not deemed to be significant, then firms will often take the easy option - deal with the matter in-house, quietly fire the guilty and the responsible and move on (the publicity of a rogue trading scandal - whatever the amount - is not usually good for business!).
So, there are probably a whole lot more rogue traders out there than we know about. Firms will write-off relatively small losses as simply the cost of doing business - some might even unconsciously allow for the odd rogue or two in their annual profit projections!
