The UBS scandal: history's biggest rogue traders
The arrest of UBS trader Kweku Adoboli for alleged fraud marks the latest in a long line of so called 'rogue traders' at investment banks. David Stevenson looks at some of the biggest, and what happened to them.
A 'rogue trader', according to Wikipedia, is "an authorised employee making unauthorised trades on behalf of their employer". The most recent case is that of Kweku Adoboli, who's been arrested by police in London for an alleged rogue trading scheme that's cost Swiss bank UBS $2.3bn. But he's just the latest in a long line.
Nick Leeson, Barings Bank
Lost £827m, sentenced to six and a half years in jailThe most famous rogue trader is probably Nick Leeson. In 1995 he bet Barings Bank against the Japanese market and lost. The ultimate loss was £827m, literally enough to break the bank Barings didn't survive. Leeson was sentenced to six and a half years in Singapore's Changi prison. He now lives in Ireland.
Toshihide Iguchi, Daiwa Bank
Lost $1.1bn, sentenced to four years in jailLess well known than Leeson, Toshihide Iguchi lost $1.1bn for his employer Daiwa Bank in 1995. He was sentenced to four years in jail, and is now a best-selling author.
Mr Copper, Sumitomo Corp
Lost $2.6bn, sentenced to eight years in jail In 1996, Yasuo Hamanaka, aka Mr Copper because of his role as chief copper trader at Sumitomo Corp dropped $1.8bn in unauthorised trading in the metal on the London Metal Exchange. Sumitomo later admitted the hit was much higher at $2.6bn, and was sentenced to an eight-year stretch for his troubles.
John Rusnak, Allfirst
Lost $691m, sentenced to seven and a half years in jailRogue traders seemed to hibernate during the dotcom boom (it's often the way booms hide a multitude of sins). But in 2002, John Rusnak hit the headlines. He had hidden $691m in losses he'd run up at Baltimore-based AIB subsidiary Allfirst. Rusnak served just under six years behind bars. What's more, he's still on the hook for the full $691m, but prosecutors said the amount he pays back will depend on how much money he can now make.
Chen Juilin, China Aviation Oil
Lost $550m, sentenced to four years in jail In 2005, Chen Juilin lost $550m punting on jet fuel futures for his firm, the China Aviation Oil Corporation. It was a spectacular fall from grace for the business legend and 'King of Aviation Oil', and resulted in a four-year prison term.
Jerome Kerviel, Socit Gnrale
Lost €4.9bn, sentenced to three years in jail (pending appeal)Between 2006 and 2008, French banker Jerome Kerviel managed to drop a stunning €4.9bn while working at Socit Gnrale. The bank says Kerviel acted alone and without authorisation. But he claims similar trades were commonplace at Soc Gen, and that management turned a blind eye while profits were being made. Kerviel was sentenced to three years and was ordered to repay the cash, but he's planning to appeal.
Robert Citron, Orange County, California
Lost $2bn, sentenced to 1,000 hours community serviceThe sentences dished out to the rogue traders above just go to show how times have changed. Maybe the best time to be a rogue trader was 'pre-Leeson'. Prior to 1994, Robert Citron, Treasurer of Orange County in California, ran up a $2bn deficit on financial instruments called repos and FRNs. Orange County effectively went bust, every programme was cut and 3,000 employees were sacked. But Citron avoided jail he claimed he lacked the sophistication to understand the products he'd been sold. He was given five years supervised probation, and had to do just 1,000 hours of community service.