Last week, UBS AG said a rogue trader racked up as much as $2 billion in losses using the firm’s own money. The losses is said to stem from unauthorized derivatives-trading bets by rogue trader Kweku Adoboli.

Moody’s Investors Service said it was reviewing UBS’s credit rating for a possible downgrade, citing concerns about UBS’s reputation and its abilities to manage risk and rebuild its investment bank.

If you recall, in January 2008, French bank Société Générale lost approximately €4.9 billion ($7.1bn) closing out positions over three days of trading beginning January 21, 2008, the bank claimed the losses was caused by Paris-based trader Jérôme Kerviel for his simple transactions, concealed by “sophisticated and varied techniques”.

Another one of the most famous rogue traders is Nick Leeson, who was a derivatives trader at the Singapore office of Britain’s Barings Bank. The $1.3 billion losses made by Leeson in 1995 eventually bankrupted the 233-year-old Barings Bank.

About the Author

Ivan Guan is the author of the popular book "FIRE Your Retirement". He is an independent financial adviser with more than a decade of knowledge and experience in providing financial advisory services to both individuals and businesses. He specializes in investment planning and portfolio management for early retirement. His blog provides practical financial tips, strategies and resources to help people achieve financial freedom. Follow his Telegram Channel to join the FIRE community.
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