Rogue trading will certainly make headlines and ruin lives. When a single person can lose millions or even billions of dollars that don’t even belong to them, most people’s ears perk up with interest in the story. If you’ve never heard of rogue trading before or you’re just curious to know more about some of the biggest losers in finance, we’ve compiled a list of the top 10 most high profile and all-around biggest losers in finance.
John Rusnak – $691 Million in Losses
John Rusnak is the least of the biggest losers in finance. Rusnak was hired on as a currency trader in 1993 by Allfirst Financial, a subsidiary of Allied Irish Bank. He started with a modest attitude, but it only took him a few years to start taking larger risks on the Japanese yen in 1996. The following year, he had already lost $29.1 million, and by 2001 his losings toll was up to $300 million. He was quite the “wise guy”: he was able to hide his losses by somehow making it look like the bank was earning money.and with this tactic he made more than $430,000 in bonuses. Around the time that his losses hit $691 million after he wrote $300,000 in options, he got sentenced 7 ½ years jail time and he’s been ordered to pay back all $691 million.
Liu Qibing – Up To $1 Billion in Losses
Liu Qibing had a huge hunch that copper prices were going to fall. To no big surprise, copper prices rose substantially and he lost majorly. It is rumored that Liu Qibing might have once been a senior metal trader for the government, but those reports have not been proven. The paper trail that Qibing left behind lead back to the Chinese State Reserve Bureau and it got out that the Chinese government was trying to depress prices by saying that copper reserves were much larger than before. Because of the Chinese and their tendency to be tight-lipped, the exact details of the amount loss is still up for discussion, and no one has seen or heard from LIu Qibing since…
Nick Leeson – $1.3 Billion in Losses
NIck Leeson is one of the most well-known rogue traders of all time and he’s definitely one of the biggest losers in finance. Leeson was 28 years old and cutthroat in 1992, and in no time he had made his way into a position as head of Barings Bank operations for the Singapore International Monetary Exchange. He began to get slammed with heavy losses with his unauthorized trade of NIkkei futures and options and he made sure to hide those losses in a private account. After an earthquake hit in Kobe, he continued to lose and he eventually bankrupted his firm in 1995.
Yasuo Hamanaka – $2.6 Billion in Losses
Known best by his nickname Mr. Copper, Yasuo specialized in copper trade for his company, Sumtomo Corporation. Yasuo is definitely known as one of the biggest losers in finance. There was a time when he controlled more than 5% of the world’s copper market. He eventually went on to serve 7 years of his 8 year prison sentence from 1998 to 2005. Many believe that he might have been a member of a price-fixing conspiracy because of the range of his actions while with the firm.
John Meriwether – $5.8 Billion in Losses
Meriwether founded the Long-Term Capital Management hedge fund in 1994 which managed more than $100 billion in assets. The fund collapses after it betted on the Russian market no to return back to normal and Russia defaulted on its loan.
Brian Hunter – $6.5 Billion In Losses
Hunter was a trader of the Amaranth Advisors hedge fund that took a gamble in natural gas futures that paid off enormously after hurricanes Katrina and Rita hit in 2005. When he placed the same trades the following year, the price of natural gas dropped severely and he cost Amaranth more than $6 billion in losses.
Jérôme Kérviél – $7.1 Billion in Losses
Jerome took the title as one of the biggest losers in finance in 2008 when he lost more than $7 billion for Société Générale. He had many unauthorized speculations about European futures, and because he was first employed with the firm as a compliance officer, it was very easy for him to use the system to cover up his losses.
All of these examples go to show you just how dangerous trading and greed can really be. Once a trader believes that they are invincible, they go on to make poor decisions in pursuit of nothing more than a hefty bonus. That bad judgment lands most of them a spot on the list of the biggest losers in finance. One should forever be mindful that seeking out large returns will also bring on the possibility of even bigger risks.