A rogue trader is an official employee who makes trades on behalf of the company that are not legal or approved by the company. This term is used to denote the employees who work in financial trading world and turn rogue due to their own negligence or greed. This term is used for professional traders who make trades while in work which are termed as unapproved financial transactions as per the company.
This is an ambiguous region when it comes to law since the trader is making trades as an employee of the company and cannot be held accountable for doing his work. But the intentions that made the trader enter into those transactions are always open to legal scrutiny, especially if those transactions are without approval from the employee.
Nick Leeson is one of the famous rogue trader who lead to bankruptcy of the company he was trading for. Leeson total losses was 1.3 billion dollars, it was so huge that the company he was working for , Barings Bank went bankrupt in 1995 following his advises for investments in index futures.
Rogue traders of the century
- Nick Leeson of the Barings Bank committing a loss of £827 million leading to bank failure in the year 1995
- Toshihide Iguchi of Resona Holdings committing a loss of $1.1 billion in the year 1995
- Yasuo Hamanaka of Sumitomo Corporation committing a loss of $2.6 billion in the year 1996
- John Rusnak of Allied Irish Banks committing a loss of $691 million in the year 2002
- Gianni Gray, David Bullen, Vince Ficarra and Luke Duffy of National Australia Bank committing a loss of AU$360 million in the year 2004
- Chen Jiulin of China Aviation Oil committing a loss of $550 million in the year 2005
- Jérôme Kerviel of Société Générale committing a loss of €4.9 billion in the year 2006–2008
- Boris Picano-Nacci of Groupe Caisse d’Epargne committing a loss of €751 million in the year 2008
- Kweku Adoboli of UBS committing a loss of $2.3 billion in the year 2011