I´ve been closely following the case of Kweku Adoboli, identified as the rogue UBS trader that “apparently” -everyone is presumed innocent until proved otherwise in due process- racked up $2 billion in losses.
Adoboli -proved he´s found guilty- will join the ranks of various “rogue traders“, a term used to describe a trader who acts independently of others – and, typically, recklessly – usually to the detriment of both the clients and the institution that employs him or her. Rogue traders typically trade in high risk investments which can create huge losses but also large gains.
Probably the first time I´ve heard the term was in 1996, when the book accounting the process in which Leeson, a former derivatives broker whose fraudulent, unauthorized speculative trading caused the collapse of Barings Bank, the United Kingdom’s oldest investment bank. The damage was estimated around £827 million pounds. Only a fraction of Adoboli´s figure.
Since there´s a lot of comprehensive coverage out there, I wanted tohave a different approach on the matter and show the case thru a different perspective.
The firs one is a recent publication by the english newspaper, The independent in which Leeson talks about Adoboli´s case, other HIgh Profiles cases, risk managment, accountability and the financial system oversight, as well.
You live in fear. In that very initial period, the heart is racing. You should have closed the position at the earliest opportunity, and taken no more than a slap on the wrist.
You can find the complete article here.
Furthermore, I´ve found the full-version of 25 Million Pounds – NIck Leeson & The Barings Bank Collapse, a documentary film portraiting the collapse. The film won the San Francisco International Film Festival, 1998 for Best Science and Nature Documentary.