Bread-loser

28 February 2008 By Lauren Silva

Maybe only timing. MF Global is the latest to admit to big losses. An employee s oversized bet on wheat will cost it $141m. It s no coincidence that volatile markets bring rogues out of the woodwork. In calmer, rising markets, they might have been lauded as superstars.

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On February 28, futures broker MF Global disclosed a $141.5m loss from unauthorized trades in the wheat market by one of its representatives in the firm's Memphis office. The company blamed the loss on a failure in its systems, and said it also fired the trader involved in the losses. MF Global shares were down nearly 28%.

Wheat prices have more than doubled in the past year.

On January 24, French bank Société Générale announced a E5bn loss, which it blamed on unprecedented fraud by a trader, Jerome Kerviel.

Kerviel, responsible for plain vanilla futures hedging on European equity market indices, took what the bank called "massive fraudulent directional positions in 2007 and 2008 beyond his limited authority".

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