A wheat trader lost $141.5m in the latest trading controversy
A wheat trader at MF Global, one of the world’s biggest commodity brokerages, lost $141.5m through ‘unauthorised activity.’
The broking house announced that on Wednesday morning, February 27, a trader in one of its U.S. branch offices substantially exceeded his authorized trading limit.
The company said it had ‘terminated’ the employee.
MF Global blamed a failure in one of the company's retail order entry systems, which permitted the representative to establish significant positions in his own account. As a result of the activity the company recorded a bad debt provision for the full amount.
The company believes it has made the appropriate adjustments to its order entry systems to prevent a recurrence of unauthorized trading of this type in the future.
“The company said it had ‘terminated’ the employee.
MF Global has engaged a third-party risk technology consultant to review its relevant order entry systems.
It said, ‘client funds are not at all impacted by this event.’
The loss represents approximately 6 % of the company's equity.
Accroding to reports the news wiped more than a quarter off the value of the companies shares.
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