A rogue trader is an authorized employee making unauthorized trades on behalf of their employer. It is most often applicable to financial trading, where professional traders make unapproved financial transactions.
This activity is in the grey area between civil and criminal illegality for the reason that the perpetrator is a legitimate employee of a company or institution, yet enters into transactions on behalf of their employer without permission.
One famous rogue trader is Nick Leeson, whose losses were sufficient to bankrupt Barings Bank in 1995 following his ill-advised and unauthorized investments in index futures. Through a combination of poor judgement on his part, lack of oversight by management, a naïve regulatory environment, and unfortunate outside events like the Kobe earthquake, Leeson incurred a $1.3 billion loss that bankrupted the centuries-old financial institution.
Table of largest rogue trader losses
|Jérôme Kerviel ||Paris, France||2006–2008||$6.9 billion (€4.9 billion)||Société Générale||European Stock Index Futures||5 years prison of which 2 years are suspended, pending appeal|
|Yasuo Hamanaka ||Tokyo, Japan||1996||$2.6 billion||Sumitomo Corporation||Copper||8 years prison|
|Kweku Adoboli ||London, United Kingdom||2011||$2.3 billion||UBS||S&P 500, DAX, and EuroStoxx Futures||7 years in prison|
|Nick Leeson ||United Kingdom||1995||$1.3 billion (£827 million)||Barings Bank||Nikkei Index Futures||6.5 years prison|
|Toshihide Iguchi ||Osaka, Japan / New York City, United States||1995||$1.1 billion||Resona Holdings||U.S. Treasury Bonds||4 years prison|
|Boris Picano-Nacci ||Paris, France||2008||$980.3 million (€751 million)||Groupe Caisse d'Epargne||Equity Derivatives||€315 million fine (2 year suspended sentence)|
|John Rusnak ||Maryland, United States||2002||$691 million||Allied Irish Banks||Foreign Exchange Options||7.5 years prison|
|Chen Jiulin||Singapore||2005||$550 million||China Aviation Oil||Jet Fuel Futures||4 years and 3 months prison|
|Melbourne, Australia||2003–2004||$187 million (A$360 million)||National Australia Bank||Foreign Exchange Options||3 years and 8 months prison
2 years and 5 months prison
2 years and 4 months prison
16 months prison
|Matthew Taylor||United States||2007||$118 million||Goldman Sachs||S&P 500 e-mini Futures||Pending Trial|
- MOLLENKAMP, CARRICK (September 16, 2011). "UBS: Rogue Trader Hit Firm". Wall Street Journal. Retrieved 2011-09-16.
- Slater, Steve (September 15, 2011). "Factbox - UBS trader joins rogues' gallery of financial crime". Reuters. Retrieved 2011-09-15.
- "The curse of delta one strikes UBS". Financial Times. September 15, 2011. Retrieved 2011-09-15.
- "French rogue trader handed €315 million fine". The Local. January 28, 2013. Retrieved 2013-08-27.
- "Rogue trader should pay $118 million to Goldman Sachs: US". CNBC. December 3, 2013. Retrieved 2013-12-03.