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Rogue trader costs Mitsubishi $ 320 million on oil spill



Mitsubishi Corp. ( MSBHY ) reported the loss on Friday. In a statement, the company said the employee was hired by one of its subsidiaries, Petro-Diamond Singapore (PDS), to oversee oil trade with China.
The employee conducted a series of unauthorized transactions from January this year, manipulating risk management systems to make the transactions legitimate, the company said. But the losses on these industries that went up after crude oil prices began to fall sharply in July.

Mitsubishi said that it detected the fraudulent transactions in August, while the employee was absent from work. The Japanese company said that losses from the transactions could increase further.

"Although PDS has already closed the current position and determined how much was lost on the underlying derivatives, we are now investigating the total loss amount," it states.

The amount lost by Mitsubishi's rogue trader was compared to other notorious cases such as Jerome Kerviel, which cost the French bank Societe Generale ( SCGLF ) over $ 6 billion dollars in the early 2000s, and Nick Leeson, another Singapore-based trader who lost $ 1
.3 billion in trades that brought down the British bank Barings.

Mitsubishi said it jumped into action soon after discovering the losses, brought in a lawyer outside and set up an investigative team.

PDS fired the employee two days ago and filed a complaint with police Thursday, Mitsubishi said in the statement.


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