During the early hours of Wednesday morning, February 27, a registered representative in one of its U.S. branch offices, trading in the wheat futures market in his personal account, substantially exceeded his authorized trading limit. The registered representative concerned has been terminated effective immediately.
Just posted on the MF Global website. The broker, spun out of London-listed Man Group last year, says the unauthorised trades have resulted in losses of $141.5m. For a single morning, that’s pretty grim. The loss represents about six per cent of MF’s equity.
Wheat prices have indeed, had a volatile week. Rising 25 per cent to a record high on Monday, the latest figures showed a drop of 25 to 50 cents a bushel in early morning US trade.
According to some reports, a computer systems failure allowed the trades to be booked.
Update – FT.com names the trader as Evan Dooley, a broker based in the Memphis office. MF Global shares are down more than 18 per cent.
Related links
Rogue wheat trader loses $140m – FT.com