The 20 Largest Trading Losses in History

It’s hard to believe that with only 3% of the world’s stock market capitalization, two of the three largest international trading losses of the past half decade came to pass in our own backyard. Here’s a complete list of “the Top 20 trading disasters” (hat tip to Bloomberg via Canaccord):

Société Générale (SCGLY.PK) (2008)

It lost 4.9 billion euros ($7.2 billion) before taxes after trader went beyond permitted limits on European stock index futures.

Bank of Montreal (BMO) (2007)

Wrong-way bets on natural gas led to a pre-tax loss of about $680 million.

Amaranth Advisors LLC (2006)

Trader Brian Hunter’s bad bets on natural gas triggered $6.6 billion of losses.

Refco Inc. (2005)

It declared bankruptcy after hiding $430 million of debt.

China Aviation Oil (Singapore) Corp. (2004)

It lost $550 million on speculative oil-futures trades, forcing debt restructuring.

Allied Irish Banks Plc (AIB)(2002)

A trader hid $691 million in currency market losses.

Plains All American Pipeline LP (PAA) (1999)

It lost $160 million because of unauthorized crude-oil trading by an employee.

Long-Term Capital (1998)

It lost $4 billion after a debt Management default by Russia.

Peregrine Investments Holdings Ltd.

1998 It collapsed from at least $300 million of debt bought from insolvent companies

National Westminster Bank Plc (1997)

It disclosed $125 million charge to cover options-trading loss

Deutsche Morgan Grenfell (1996)

It fired fund manager Peter Young for unauthorized trading and paid $279 million to bail out investors

Sumitomo Corp.(SSUMY.PK) (1996)

It disclosed a $2.6 billion loss on unauthorized copper trades by Yasuo Hamanaka.

Daiwa Bank (1995)

It disclosed a $1.1 billion loss from unauthorized trades.

Barings Plc (1995)

It collapsed after trader Nick Leeson racked up $1.4 billion in losses.

Orange County, California (1994)

It lost $1.7 billion from debt and derivatives used to expand its investment fund.

Kidder Peabody & Co. (1994)

It took a $210 million charge to reflect what it said were false bond trading profits by trader Joseph Jett.

Codelco (1994)

Trader Juan Pablo Davila lost more than $200 million speculating on copper.

Metallgesellschaft AG (1993)

It lost more than $1.5 billion trading oil futures contracts.

Drexel Burnham Lambert Inc. (1990)

The company filed for bankruptcy after pleading guilty to charges of insider trading and stock manipulation.

Merrill Lynch & Co. (MER) (1987)

A mortgage trader was accused of racking up $377 million loss in unauthorized trades.

Comments

[what the ?:]

also
Bre X Minerals 1997, 6 billion in market cap. wiped out. gold scandal;
Parmalet 2003, at 17 billion ;
World Com 2007 for financial mis statements;
and the biggest
ENRON over 31 biliion

2008 Jan 27 03:55 PM

[john haskell:]

supposedly this blog post was a list of trading losses, but when you add LTCM, Drexel and Peregrine, a better title would have been "bad things that people were unhappy about." LTCM's and Peregrine's losses were in no way unauthorized, they were just mistakes, and the causes of Drexel's collapse were rather complex and certainly not due to a single trader.

2008 Jan 28 09:19 AM

[notsosmart:]

its the climate of ethics( or lack of) & greed @ any cost. these are only the ones that have surfaced so far. there is more coming. sadly our own government is in leadership of lying,spinning & " i cant recall". the individual investor is just lucky if he does well because almost everything is in a black box.

2008 Jan 28 10:40 AM

[what the ?:]

During a tour in 2006, I read a local newspaper item in Southern China that reported hundreds of millions of losses to internal bank corruption in half a year. One could assume that in a FULL year they would find twice as much?
But what about the ones they won't acknowledge or even find out??
Funny how big money corrupts everyone everywhere.

2008 Jan 28 11:46 PM