Rogue trader costs UBS $2 billion

CaptHenway

linky

Not necessarily bullion related, but they are a major player in the bullion game.

ricko

At least that is the press report...wonder what they are covering up? Cheers, RickO

jmski52

Well, since some of the Bank Bailout money of 2008 went to the New York office of UBS, a foreign entity - it seems fairly obvious that the money helped to pay for this "rogue trader's" excesses. That's the cover story. I'm no more the next Chairman of the Fed than he was a rogue trader.

Cover story. Pure & simple. We, the taxpayers got screwed again. By Paulson, Geithner and Bush.

cohodk

The Swiss Natl Bank's balance sheet is almost 50% of Swiss GDP. UBS's balance sheet is 2.5x the Swiss GDP.

derryb

I'm waiting for Washington to declare "rogue Fed chairman."

renman95

"Rogue President costs US $4 trillion."

Headline fixed.

MsMorrisine

lessee

1. guy is a hacker and a document forger
2. guy had previously authorized access to the back office that was not revoked when he went to work on the other side
3. he had help.


Nick Leeson had #2.

SocGen said Kerviel worked alone, but unless it's one of the first two, then he had help. I never heard of allegations for the first two. I think he had help.

I have to wonder if this new one had help.


The back offices on these banks can't be that bad, can they? Are they going to admit to being so lame they can't settle the books on a day-to-day basis????

CaptHenway

I know that these rogue trader blowups tend to be guys who get in over their heads and then spend money chasing money, but if they lost $2 billion, other traders must have made $2 billion. Who is to say that it wasn't a setup and half a billion wasn't lost to a confederate?

The trader who cost some English bank $6.7 billion back in 1999(?) got three years in prison.

MsMorrisine

CNN just posted this list of big losses from rogue traders

I believe
Yasuo Hamanaka -- $2.6 billion, Sumitomo Corporation
worked out of London and traded through the LME.


a decent movie on the subject is "Rogue Trader" and it is about Nick Leeson.

another decent movie about a diffent subject, micro crap stocks, is "Boiler Room" and I must say that Vin Diesel has the part down well.

Spooly

<< <i>"Rogue President costs US $4 trillion."

Headline fixed. >>



Now that's funny! When will he be arrested?

roadrunner

I'd give good odds that otc derivatives are at the bottom of these losses. It's fairly easy to lose $2 BILL when you're leveraged 50-1 in derivatives
and there's no way day-to-day to know what the darn things are worth.

roadrunner

morgansforever

I thought the banks hired financial terrorists, give then unlimited credit and let em launch
WFD's, Weapons of Financial Destuction. Wonder what the real story is?

roadrunner

Rolling Stone's Matt Taibbi's view of this

And I like one of the reader's comments below the article:

The best part of this story: UBS director of Risk Management held the same position when Lehman Brothers blew up. You can't make that stuff up!

roadrunner

Justacommeman

<< <i>CNN just posted this list of big losses from rogue traders


another decent movie about a diffent subject, micro crap stocks, is "Boiler Room" and I must say that Vin Diesel has the part down well. >>



I lived that when I was a president at Steve Madden. It was pretty accurate. Read Wolf of Wall St by Jordan Belfort. 100% true story. Jordan ran Stratton-Oakmont probably the most notorious Long Island boiler room ever. MJ

jmski52

I'd give good odds that otc derivatives are at the bottom of these losses. It's fairly easy to lose $2 BILL when you're leveraged 50-1 in derivatives
and there's no way day-to-day to know what the darn things are worth.

I agree with Matt Tabbi and love his in-depth expose's of this stuff. The only place I'd differ with him is that I don't believe that these are "rogue trader" incidents, simply because I don't think that they bypassed any internal rules - I think these trades were authorized all the way to the top as an integral part of their firms' business plans.

The only difference is that the guys at the top put themselves in a position to be protected by the guys who are willing to leave themselves legally vulnerable in order to make some bucks and get a shot at a promotion.

MsMorrisine

<< <i>

<< <i>CNN just posted this list of big losses from rogue traders


another decent movie about a diffent subject, micro crap stocks, is "Boiler Room" and I must say that Vin Diesel has the part down well. >>



I lived that when I was a president at Steve Madden. It was pretty accurate. Read Wolf of Wall St by Jordan Belfort. 100% true story. Jordan ran Stratton-Oakmont probably the most notorious Long Island boiler room ever. MJ >>




That guy should have never been allowed to have that book published.

The whole Stratton-Oakmont business model was to use ipo's, market making, and stock brokerage as a way to part other people from their money. To get a book deal out of it is an insult to all the victims, and there are many.

MsMorrisine

<< <i>I'd give good odds that otc derivatives are at the bottom of these losses. It's fairly easy to lose $2 BILL when you're leveraged 50-1 in derivatives
and there's no way day-to-day to know what the darn things are worth.

I agree with Matt Tabbi and love his in-depth expose's of this stuff. The only place I'd differ with him is that I don't believe that these are "rogue trader" incidents, simply because I don't think that they bypassed any internal rules - I think these trades were authorized all the way to the top as an integral part of their firms' business plans.

The only difference is that the guys at the top put themselves in a position to be protected by the guys who are willing to leave themselves legally vulnerable in order to make some bucks and get a shot at a promotion. >>



Like I was saying, they had to have either had access to the back office, hacked their way through or had help.

some of these past rogue traders' stories, leeson as an exception, did not include allegations of hacking or already having access.

Even if the top people didn't know, there were people around and above them that aided and abetted.

Justacommeman

If you hate the idea of making money off of the book you will hate the movie even more. I believe De Capria will play Jordan. If I make it into the movie I want to be played by somebody really really good looking.

Yes, Stratton hurt A LOT of people. MJ

MsMorrisine

Leonardo De Caprio doesn't have the huevos to play that roll. VD would still be a good choice for that one, plus he already has learned at lot about the role by being in the movie BR.

maybe Leo could play you. Give Steve a call, I'll bet he's got an inside line on SM the company's role in the movie.

Justacommeman

Actually Belfort and De Capria look a lot alike. Steve married an ex girl friend of mine. We don't speak that often anymore.

The book was not flattering to Steve in the least. MJ

johnny9434

<< <i>"Rogue President costs US $4 trillion."

Headline fixed. >>



lmao, ya know.

roadrunner

<< <i>I'd give good odds that otc derivatives are at the bottom of these losses. It's fairly easy to lose $2 BILL when you're leveraged 50-1 in derivatives
and there's no way day-to-day to know what the darn things are worth.

I agree with Matt Tabbi and love his in-depth expose's of this stuff. The only place I'd differ with him is that I don't believe that these are "rogue trader" incidents, simply because I don't think that they bypassed any internal rules - I think these trades were authorized all the way to the top as an integral part of their firms' business plans.

The only difference is that the guys at the top put themselves in a position to be protected by the guys who are willing to leave themselves legally vulnerable in order to make some bucks and get a shot at a promotion. >>



Agree. These guys are offered up to appease the masses "to prove" that something is being done to regulate the "unregulables."
But in reality, the large fish just slink away from the crime scene as the little guy goes to jail to atone for their company's sins, while leaving
the trading profits untouched. As Harvey Keitel says in the National Treasure Movies, "Ben, someone has to go to jail."

roadrunner

CaptHenway

They have adjusted it to $2.3 billion. What's $300,000,000 more or less?

MsMorrisine

<< <i>They have adjusted it to $2.3 billion. What's $300,000,000 more or less? >>




anyone else in UBS have some trading losses to get rid of?