Lehman Brothers in London has become the latest financial firm to suffer losses from unauthorised trader activity, losing a reported $150 million on misvalued exotic equity derivatives trades.
The bank has not made any public statement on the losses, which it detected on February 28 through its own internal checks. Two traders on the London exotic equity derivatives desk were suspended the day after the bank found they had misvalued their portfolios. But the losses will reportedly have no material impact.
The news follows a similar case at Credit Suisse, in which several of its traders failed to update their valuations of portfolios of subprime-linked structured credit products as their values fell. The bank suffered $2.85 billion writedowns last month when the discrepancies were discovered.
Rogue traders at brokerage MF Global and the French bank Société Générale have also cost their employers hundreds of millions.
Lehman is understood to be satisfied that its internal controls detected the mispricing, and is not planning any major overhaul of its risk management.
Topics: Lehman Brothers
Sign up for Risk.net email alerts
Sponsored webinar: IBM Risk Analytics
Nominated for two technology awards
Nominated for post trade technology award
Sponsored webinar: Collateral and counterparty tracking
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.