CHRONOLOGY-Previous major losses through trading upsets
LONDON, Feb 6 (Reuters) - Allied Irish Banks Plc said on Wednesday it was investigating a suspected case of fraud amounting to $750 million in the treasury operation of its U.S. banking subsidiary Allfirst.
Following is a chronology of some previous losses by companies and institutions due to traders' activities since 1990:
1990:
November - Michael Milken, known as the junk bond king as head of bond operations at U.S. firm Drexel Burnham Lambert, was sentenced to 10 years in jail for securities fraud. Drexel filed for bankruptcy after paying $650 million in fines and restitution.
1992:
April - Indian banks and brokers were accused of colluding illegally to siphon $1.3 billion from the inter-bank securities market to fuel a boom on the Bombay Stock Exchange.
1993:
December - German industrial group Metallgesellschaft suffered spectacular losses on energy products-linked derivatives, forcing creditors to mount a $2.2 billion rescue.
1994:
January - Chile Copper Corp, the world's largest copper producer, better known as Codelco, lost $175 million through one trader in a financial scandal that rocked Chile.
April - Wall Street brokerage, Kidder, Peabody & Co. fired the head of its government trading desk, Joseph Jett, after the firm uncovered a scheme that created phantom trades, resulting in a one-time charge of $210 million after tax.
December - Orange County, California, declared bankruptcy after disclosing investment losses estimated at more than $1.6 billion from its investment portfolio, which relied heavily on derivatives.
1995
February - One of Britain's oldest investment banks, Barings, collapsed after trader Nick Leeson racked up losses of $1.4 billion in unauthorised trades, betting a staggering $27 billion on Japanese shares and bonds. The discovery sent markets round the world in a spin. Leeson was sentenced to six-and-half years in jail in Singapore, and Barings was subsequently sold to Dutch bank ING.
July - The Common Fund of the United States, which oversees almost $20 billion of funds for colleges and other educational institutions, said a rogue trader had caused it to lose about $128 million.
September - Daiwa Bank, Japan's fifth largest, suffered a $1.1 billion loss from unauthorised bond trading by Toshihide Iguchi, one of its executives in the United States. U.S. authorities ordered Daiwa to close its U.S. operations. The trader was later sentenced to four years in prison for hiding the losses.
1996:
June - The world's biggest copper merchant, Sumitomo Corp, said it lost an estimated $2.6 billion over 10 years from unauthorised copper trades, primarily by chief copper trader Yasuo Hamanaka, who was later jailed for eight years.
September - Deutsche Morgan Grenfell (DMG) faced a crisis when it emerged that fund manager Peter Young had breached rules at its British fund management arm, Morgan Grenfell Asset Management. The episode cost Deutsche around 400 million pounds in compensation to investors and an immediate cash injection.
1997:
February/March - National Westminster Bank, one of Britain's largest, revealed its NatWest Markets arm had suffered a 90 million pounds ($140 million) loss as a result of systematic mispricing of interest rate options over a two-year period.
August - Swiss banking heavyweight Credit Suisse admitted to losses of below $10 million stemming from unauthorised options trades. An equity options trader left the firm as a result.
1998 - Griffin, a Chicago-based commodity futures firm, collapsed after London trader John Ho Park, who cleared through the firm, allegedly lost $10.3 million trading in German Bund futures on the Swiss-German Eurex, forcing Griffin's closure in December.
1999:
November - U.S. Chase Manhattan Corp. saw fourth-quarter trading revenues cut by $60 million pre-tax because a currency trader inflated his profits for over a year. The trader was fired.
2000:
January - Canadian company TransCanada Pipelines Ltd. announced a $49 million loss from unauthorised trading by a senior staff member at its former natural gas trading subsidiary Pan-Alberta Gas.
February - EOTT Energy Partners LP, a Houston-based independent energy company, said it lost roughly $6.2 million to unauthorised trading and theft of natural gas by a former employee.
2001:
January - Former chief financial officer of the now-defunct Griffin Trading Co., Scott Szach, was charged with diverting more than $5.56 million from a firm bank account to a brokerage trading account to fund unauthorised trading in the 18 months before the firm's demise.
September - Merrill Lynch fired two senior executives for failing to supervise a currency dealer who diverted profits to favoured clients, leaving the bank facing a seven million pound bill.
2002:
February - Ireland's largest bank Allied Irish revealed a rogue U.S. trader had defrauded it of up to $750 million. The U.S. Federal Bureau of Investigation was called in to lead the hunt for the missing dealer, named as John Rusnak. |
