List of trading losses

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The following contains a list of trading losses of the equivalent of USD100 million or higher. Because of the secretive nature of many hedge funds and fund managers, some notable losses may never be reported to the public. The list is ordered by the real amount lost, starting with the greatest.

This list includes both fraudulent and non-fraudulent losses, but excludes losses associated with Bernie Madoff's Ponzi scheme which is estimated in the $50 billion range because Madoff did not lose the majority of this money in trading.

# Nominal Amount Lost USD FX Rate at time of loss[1] USD Equivalent at time of loss USD Inflation to 2007[2] 2007 USD Amount Lost Country Company Source of Loss Year Person(s) associated with incident
1 USD 9 bn 1 USD 9 bn -3.7% USD 8.67 bn  United States Morgan Stanley[3] Credit Default Swaps 2008 Hubler, HowieHowie Hubler
2 EUR 4.9 bn 1.473 USD 7.22 bn -3.7% USD 6.95 bn  France Société Générale[4] European Index Futures 2008 Kerviel, JérômeJérôme Kerviel
3 USD 6.5 bn 1 USD 6.50 bn 2.8% USD 6.69 bn  United States Amaranth Advisors[5] Gas Futures 2006 Hunter, BrianBrian Hunter
4 USD 4.6 bn 1 USD 4.6 bn 27.2% USD 5.85 bn  United States Long Term Capital Management[6] Interest Rate and Equity Derivatives 1998 Meriwether, JohnJohn Meriwether
5 USD 5.80 bn 1 USD 5.80 bn -7.0% USD 5.80 bn  United Kingdom JPMorgan Chase[7] Credit default swaps 2012 Iksil, BrunoBruno Iksil
6 JPY 285 bn 108.78 USD 2.62 bn 32.1% USD 3.46 bn  Japan Sumitomo Corporation[8] Copper Futures 1996 Hamanaka, YasuoYasuo Hamanaka
7 BRL 4.62 bn 1.833 USD 2.52 bn -3.7% USD 2.43 bn  Brazil Aracruz[9][10] FX Options 2008 Zagury, IsacIsac Zagury, Rafael Sotero
8 USD 1.7 bn[11] 1 USD 1.7 bn 39.9% USD 2.38 bn  United States Orange County[12] Leveraged bond investments 1994 Citron, RobertRobert Citron
9 DEM 2.63 bn 1.655 USD 1.59 bn 43.5% USD 2.28 bn  Germany Metallgesellschaft[13] Oil Futures 1993 Schimmelbusch, HeinzHeinz Schimmelbusch[14]
10 JPY 166 bn 111.08 USD 1.49 bn 43.5% USD 2.14 bn  Japan Showa Shell Sekiyu [15][16] FX Forwards 1993
11 JPY 1536 bn 102.18 USD 1.50 bn 39.9% USD 2.09 bn  Japan Kashima Oil[16] FX Forwards 1994
12 USD 2 bn 1 USD 2 bn -8.5% USD 1.83 bn  United Kingdom UBS[17] Equities ETF and Delta 1 2011 Adoboli, KwekuKweku Adoboli
13 HKD 14.7 bn 7.786 USD 1.89 bn -3.7% USD 1.82 bn  China CITIC Pacific[18] Foreign Exchange Trading 2008 Yung, FrancesFrances Yung
14 GBP 827 mn 1.579 USD 1.31 bn 36.1% USD 1.78 bn  Singapore Barings Bank[19] Nikkei Futures 1995 Leeson, NickNick Leeson
15 USD 1.8 bn 1 USD 1.8 bn -3.7% USD 1.74 bn  United States Deutsche Bank[20] Derivatives 2008 Weinstein, BoazBoaz Weinstein
16 EUR 1.4 bn 0.923 USD 1.29 bn [21] 20.4% USD 1.56 bn  Austria BAWAG [22] Foreign Exchange Trading 2000 [21] Flöttl, WolfgangWolfgang Flöttl, Helmut Elsner[22]
17 USD 1.1 bn 1 USD 1.10 bn 36.1% USD 1.50 bn  Japan Daiwa Bank[23] Bonds 1995 Iguchi, ToshihideToshihide Iguchi
18 USD .8 bn 1 USD .8 bn 82.5% USD 1.46 bn  United Kingdom Soros Fund[24] SP 500 Futures 1987 Soros, GeorgeGeorge Soros
19 EUR 0.75 bn 1.473 USD 1.10 bn -3.7% USD 1.06 bn  France Groupe Caisse d'Epargne[25][26] Derivatives 2008 Picano-Nacci, BorisBoris Picano-Nacci
20 BRL 2 bn 1.833 USD 1.09 bn -3.7% USD 1.05 bn  Brazil Sadia[9][10][27] FX and Credit Options 2008 Ferreira, AdrianoAdriano Ferreira, Álvaro Ballejo
21 GBP 0.4 bn 1.638 USD 0.66 bn 29.2% USD 0.85 bn  United Kingdom Morgan Grenfell[28] Shares 1997 Young, PeterPeter Young
22 USD 0.6 bn 1 USD 0.60 bn 39.9% USD 0.84 bn  United States Askin Capital Management[29] Mortgage-Backed Securities 1994 Askin, DavidDavid Askin
23 EUR 0.60 bn 1.371 USD 0.82 bn 0.0 USD 0.82 bn  Germany WestLB[30] Common and Preferred Shares 2007 Breuers, FriedhelmFriedhelm Breuers[31]
24 USD 0.69 bn 1 USD 0.69 bn 15.3% USD 0.80 bn  United States AIB/Allfirst[32] Foreign Exchange Options 2002 Rusnak, JohnJohn Rusnak
25 DEM 0.47 bn 2.587 USD 0.18 bn 320.6% USD 0.76 bn  Germany Herstatt Bank[33][34] Foreign Exchange Trading 1974 Dattel, DanyDany Dattel
26 CAD 0.68 bn 1.066 USD 0.64 bn 0% USD 0.64 bn  Canada Bank of Montreal[35][36] Natural gas derivatives 2007 David Lee, Kevin Cassidy [37][38]
27 USD 0.55 bn 1 USD 0.55 bn 9.8% USD 0.60 bn  China China Aviation Oil (Singapore)[39] Oil Futures and Options 2004 Jiulin, ChenChen Jiulin
28 CHF 0.63 bn 1.451 USD 0.43 bn 27.2% USD 0.55 bn   Switzerland Union Bank of Switzerland[40] Equity Derivatives 1998 Goldstein, RamyRamy Goldstein
29 USD 0.28 bn 1 USD 0.28 bn 82.5% USD 0.51 bn  United States Merrill Lynch[41] Mortgages (IOs and POs) Trading 1987 Rubin, Howard A.Howard A. Rubin
30 USD 0.28 bn 1 USD 0.28 bn 82.5% USD 0.51 bn  United States State of West Virginia[42] Fixed Income and Interest Rate Derivatives 1987 Manchin, A. JamesA. James Manchin
31 USD 0.35 bn 1 USD 0.35 bn 39.9% USD 0.49 bn  United States Kidder Peabody[43] Government Bonds 1994 Jett, JosephJoseph Jett
32 USD 0.4 bn 1 USD 0.40 bn 20.4% USD 0.48 bn  United States Manhattan Investment Fund[44] Short IT stocks during the internet bubble 2000 Michael Berger
33 EUR 0.30 bn 1.244 USD 0.37 bn 9.8% USD 0.41 bn  Austria Hypo Group Alpe Adria[45] Foreign Exchange Trading 2004
34 USD 0.35 bn 1 USD 0.35 bn 0.0% USD 0.35 bn  United States Calyon[46] Credit Derivatives 2007 Bierbaum, Richard "Chip"Richard "Chip" Bierbaum
35 AUD 0.36 bn 0.854 USD 0.31 bn 9.8% USD 0.34 bn  Australia National Australia Bank[47] Foreign Exchange Trading 2004 Duffy, LukeLuke Duffy, Gianni Gray, Vince Ficarra & David Bullen[48]
36 EUR 0.30 bn 0.895 USD 0.27 bn 17.1% USD 0.31 bn  Belgium Dexia Bank[49] Corporate Bonds 2001
37 USD 0.207 bn 1 USD 0.207 bn 43.5% USD 0.30 bn  Chile Codelco[50] Copper, silver, gold futures 1993 Davila, Juan PabloJuan Pablo Davila
38 USD 0.16 bn 1 USD 0.16 bn 39.9% USD 0.22 bn  United States Procter & Gamble[51] Interest Rate Derivatives 1994 Mains, RaymondRaymond Mains
39 USD 0.2 bn 1 USD 0.20 bn 6.2% USD 0.21 bn  China State Reserves Bureau Copper Scandal[52] Copper Futures 2005 Qibing, LiuLiu Qibing[53]
40 GBP 0.09 bn 1.638 USD 0.15 bn 29.2% USD 0.19 bn  United Kingdom NatWest[54] Interest Rate Options 1997 Papouis, KyriacosKyriacos Papouis
41 USD 0.11 bn 1 USD 0.11 bn 39.9% USD 0.15 bn  United States Cuyahoga County, Ohio[55] Leveraged Fixed Income 1994
42 SEK 1230 bn 7.804 USD 0.15 bn -4.8% USD 0.143 bn  Sweden HQ Bank[56] Equity Derivatives 2010 Crafoord, FredrikFredrik Crafoord, Mikael König, Patrik Enblad
43 USD 0.14 bn 1 USD 0.14 bn -3.7% USD 0.13 bn  United States MF Global[57] Wheat Futures 2008 Dooley, EvanEvan Dooley
44 USD 0.12 bn 1 USD 0.12 bn -3.7% USD 0.12 bn  United States Morgan Stanley[58] Credit-index options 2008 Matt Piper
45 USD 0.1 bn 1 USD 0.10 bn 15.3% USD 0.12 bn  Croatia Riječka banka (Rijeka Bank)[59] Foreign Exchange Trading 2002 Nodilo, EduardEduard Nodilo

See also[edit]

References[edit]

  1. ^ "Foreign Exchange Rates (Annual), Federal Reserve Statistical Release G.5A".  Annual average for year quoted in table (usually year loss reported). All except AUD, EUR, GBP expressed as currency per USD
  2. ^ "US Consumer Price Index".  Using annual average CPI for year cited to 2007 average.
  3. ^ Hubler, Howie (2008-03-25). "More Concerns About Howie Hubler's Loan Value Group". The New York Observer. Retrieved 2008-03-25. 
  4. ^ Schwartz, Nelson D. (2008-01-25). "A Spiral of Losses by a ‘Plain Vanilla’ Trader". The New York Times. Retrieved 2008-01-25. 
  5. ^ Brian Hunter, Amaranth, hedge funds, Bloomberg Businessweek, "A Rogues' Gallery of Traders", September 16, 2011. Retrieved 2014-01-09.
  6. ^ FAILED WIZARDS OF WALL STREET, BusinessWeek, 1998-09-21. Retrieved 2008-03-21
  7. ^ JPMorgan’s ‘London Whale’ Loss Rises to $3 Billion as Lawsuits Fly, Times Business
  8. ^ Rogue copper trader draws eight-year prison term, Japan Times, 1998-03-26. Retrieved 2008-03-21
  9. ^ a b "Brazil Stocks Tumble After Aracruz, Sadia Post Currency Losses". Bloomberg.com. 26 September 2008. Retrieved 27 April 2010. 
  10. ^ a b "Aracruz Fails to Settle $2.13 Billion Derivative Loss (Update6)". Bloomberg.com. 12 December 2008. Retrieved 27 April 2009. 
  11. ^ The Effect of the Orange County Bankruptcy on Residential Real Estate Prices, Thomas A. Evans, Chicago Graduate School of Business, November 14, 2006
  12. ^ Greenwald, John (December 19, 1994). "The California Wipeout". Time Magazine. Retrieved 2007-07-22. 
  13. ^ New York Times, April 5, 1996
  14. ^ International Harald Tribune, August 10, 2007
  15. ^ "Showa Shell Sekiyu K.K.". www.fundinguniverse.com. Retrieved 27 April 2009. 
  16. ^ a b "Determined Loser. (Kashima Oil)". The Economist. April 16, 1994. 
  17. ^ Adoboli, Kweku (2011-09-15). "Kweku Adoboli arrested". Business Insider. Retrieved 2008-03-25. 
  18. ^ CITIC Pacific warns potential $2 billion forex losses, Reuters October 20, 2008
  19. ^ Rogue Trader: How I Brought Down Barings Bank and Shook the Financial World by Nick Leeson and Edward Whitley (Hardcover - Mar 1996) ISBN 0-316-51856-5
  20. ^ Deutsche Bank Fallen Trader Left Behind $1.8 Billion Hole
  21. ^ a b The trading that generated losses ended in 2000 but the losses were not uncovered until 2006. The USD equivalent shown here is for 2000; it is often quoted as USD 1.9 bn which is the euro amount converted at the 2006 FX rate.
  22. ^ a b Groendahl, Boris (July 13, 2007). "Trial begins Monday for suspects in Austrian bank scandal". New York Times. Retrieved 3 May 2010. 
  23. ^ An Unusual Path to Big-Time Trading, New York Times, September 27, 1995. Retrieved 2008-01-24
  24. ^ Martin Schwartz, Paul Flint, Dave Morine, Pit Bull: Lessons from Wall Street's Champion Day Trader, pg. 171, HarperBusiness, 1999 ISBN 0-88730-956-9
  25. ^ Caisse d'Epargne chairman resigns after trading loss, Reuters, October 19, 2008
  26. ^ "France nabs trader over Caisse d'Epargne losses". www.politicalscandalnews.com / AFP Global Edition. 30 October 2008. Retrieved May 4, 2010. 
  27. ^ "Perdigão Acquires Sadia". ThePoultrySite.com. 20 May 2009. Retrieved 27 April 2010. 
  28. ^ Morgan Grenfell case study at ERisk.com
  29. ^ Sad episodes of Global securitisation: The Hall of Shame
  30. ^ Pressure mounts on WestLB to merge after reporting big trading losses, International Herald Tribune, August 30, 2007
  31. ^ WestLB ousts top traders after losses, Times Online, April 5, 2007
  32. ^ Allied Irish Banks case study at ERisk.com
  33. ^ Markham, Jerry W. (2002). A Financial History of the United States, Volume 1. Armonk, NY: me Sharpe. p. 20. 
  34. ^ Heckinger, Richard; David Marshall and Robert Steigerwald (November 1, 2009). "Financial Market Utilities and the Challenge of Just-In-Time Liquidity". Chicago Fed Letter (Chicago: Federal Reserve Bank of Chicago) (268a). 
  35. ^ BMO trading loss hits $680M
  36. ^ Bank of Montreal Raises Trading Loss to C$680 Million
  37. ^ "U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 20811". November 18, 2008. Retrieved 28 April 2009. 
  38. ^ Former bank natgas trader gets $500,000 fine-CFTC Reuters, 6-November-2009
  39. ^ "Jail term for China Aviation boss", BBC News, 21 March 2006
  40. ^ The Fall of the UBS: The Reasons Behind the Decline of the Union Bank of Switzerland by Dirk Schutz, ISBN 0-944188-20-6
  41. ^ Anatomy of a Staggering Loss, New York Times, 1987-05-11, Retrieved 2008-01-24
  42. ^ Treasurer of West Virginia Retires Over Fund's Losses, New York Times, July 10, 1989. Retrieved 2008-03-22
  43. ^ In the Matter of Orlando Joseph Jett, U.S. Securities and Exchange Commission, March 5, 2004
  44. ^ The Bankruptcy Development That Has Wall St. Worried, New York Times, 2007-02-23. Retrieved 2008-01-24
  45. ^ Banking: Watchdogs caught napping, Financial Times, 2007-10-29. Retrieved 2008-01-24
  46. ^ Calyon Trader Fired for Losses Says He's No Rogue, Bloomberg, 2007-10-10. Retrieved 2009-06-01
  47. ^ Former NAB trader pleads guilty, The Age, 2005-06-14. Retrieved 2013-03-16
  48. ^ http://www.abc.net.au/worldtoday/content/2006/s1678388.htm
  49. ^ Dexia sink €300m in bond fraud: a mere drop in the ocean
  50. ^ "Codelco takes $200 million hit.". Futures (Cedar Falls, Iowa) (Futures Magazine Group). 1 March 1994. ISSN 0746-2468. Retrieved 27 April 2009. 
  51. ^ Procter & Gamble's Tale of Derivatives Woe, International Herald Tribune, 1994-04-14. Retrieved 2008-01-24
  52. ^ City gripped by mystery of the phantom copper dealer, The Times, 2005-11-15. Retrieved 2008-01-24
  53. ^ Copper bottom, The Observer, November 20, 2005
  54. ^ SFO probes NatWest black hole, Daily Telegraph, 1997-06-27. Retrieved 2008-01-24
  55. ^ Significant Losses Stemming from the Termination of Its SAFE Investment Program Erode County's Previously Substantial Financial Margins, Business Wire, Jan 5, 1995. Retrieved 2008-03-22
  56. ^ http://asia.news.yahoo.com/rtrs/20100629/tbs-hqbank-7318940.html, Reuters, 2010-06-29
  57. ^ Rogue Wheat Trader Blamed for $141 Million Loss, NYTimes.com, 2006-02-28. Retrieved 2008-03-03
  58. ^ Craig, Suzanne; Mollenkamp, Carrick (2008-06-19). "Still 'Brutal' at Morgan Stanley". The Wall Street Journal (Dow Jones). p. C1. "The trader, identified as Matt Piper, handled credit-index options that can act as insurance against defaults." 
  59. ^ Croat trader puts bank in £70m crisis, Daily Telegraph, 2003-03-24. Retrieved 2008-01-24