The 20 Largest Trading Losses in History

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Includes: AIBYY, BMO, MER, PAA, SCGLY, SSUMY
by: Mark McQueen

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 (OTCPK:SCGLY) (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 (NYSE: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 (NYSE: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.(OTCPK:SSUMY) (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.