
Lehman Brothers suffers mispricing losses
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.
See also: Mispricings at Credit Suisse cause $2.85 billion loss
Rogue trade loses MF Global $141.5 million
Genius or blunder?
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net