Derivatives trader hid trades
A rogue trader in Singapore cost Mitsubishi $320 million by manipulating risk management systems to make trades look like hedges, the company disclosed today.
The trader was handling crude oil trade with China but took directional positions since January and was evidently on the wrong side of the crude oil drop in July.
"Because the employee was manipulating data in [the company's] risk-management system, the derivatives transactions appeared to be associated with actual transactions," the announcement said.
The employee was fired Wednesday and a complaint filed with police yesterday. The positions were closed out and the loss is still just an estimate.
The loss is substantial but pales in comparison to the $6 billion loss from Jerome Kerviel.
