MF Global hit by rogue trading
LOSSES & LAWSUITS
LONDON & BERMUDA - Another rogue trading scandal has taken place at futures broker MF Global. A US-based broker at the firm, headquarted in Bermuda, exceeded his personal account ceiling before losing $141.5 million on unauthorised wheat futures. Meanwhile, two London-based equity traders at investment bank Lehman Brothers have been suspended after irregularities were found in their valuations of complex equity derivatives.
Lehman Bros has said its investigation is not fraud-based and it is working with the Financial Services Authority (FSA) in connection with its internal investigation.
MF Global blamed the fraud on a failure of its retail order computer systems, allowing the broker to take on the excessive positions. The firm said it discovered the trade soon after it had taken place, in addition to shoring up risk controls and hiring an external consultancy to investigate the incident. MF has since fired the trader involved, although the business will have to cover the loss - 6% of its capital.
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 [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact [email protected] to find out more.
You are currently unable to copy this content. Please contact [email protected] 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 [email protected]
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 [email protected]
More on Regulation
Derivatives
Repo-linked renminbi floaters fail to excite investors
Muted demand dents China’s hope for repo fixing to become debt market’s benchmark of choice
Receive this by email