A rogue trader at MF Global Ltd. has racked up $141.5 million in losses by bypassing an entry-order system that should have blocked his efforts, according to the Associated Press.
Evan Dooley, a trader at the Bermuda-based brokers Memphis, Tenn., branch was found to be trading wheat contracts that exceeded the amount he was allowed to trade.
MF Global said it has fired Dooley and liquidated the wheat contracts, which led to a $141.5 million loss. MF Globals stock plunged 19.7% to $23.51 on Thursday.
Kevin Davis, CEO of MF Global, said Dooley didnt have nearly enough cash to support his large position and the computer system should have blocked the trade.
This is an absolutely awful event, but we believe it was an aberration in our risk control, Davis said. We are deeply, deeply upset that this has happened, but we believe weve fixed it and it will never happen again.
A few weeks ago, Societe Generales trader Jerome Kerviel rang up more than $7 billion in losses by placing unauthorized bets on European stock indexes.