Don's top 10 Idiot Traders - There is no accounting for some fools

Dear Reader,

I often think it is important to know about key characters in the world of finance. You have all heard of Warren Buffett and George Soros. But what about the ones that lost incredibly stupid amounts of money?  For a little light relief for you on a Saturday I thought I should come up with a list of likely contenders for the most prolific loss making  traders in the last few generations.

Toshihide Iguchi 

Liu Qibing

Kweku Adoboli   

Kweku not only would be a very high scoring word in scrabble he was also convicted of illegally trading and causing UBS to lose 2 billion USD.  Only 2 years after graduating in 2006 he had gone from analyst to trading on the ETF desk. Apparently he began fraud even then inputting false information into the bank's risk system and not hedging his trades. By 2011 UBS began an investigation and he fessed up to illegal trading. He cost hundreds of people their jobs because of the losses and the bank's share price took a $4.5 billion hit.  Nice darts there.  He has since been deported to Ghana after serving three and a half years.  Personally I think he would make a great body double for Lenny Henry if he is short of work.

Bruno Iksil

Bruno is not in fact a popular American singer. He worked at JPM london back in 2012  on the Credit default swap desk and seemed yet again to be one of those traders that thought his bank was bigger than the market. In fact at the time he earned the nickname of 'The Whale'. A few hedge funds had noted that he was making large bets against the direction of the market and they all took him on.  It went their way and he ended up losing $2 billion (although some reports are that the bank wore losses of up to 7 billion). The good old FCA , or as I like to call them 'The Eye of Sauron', tried to fine him £1 million but ended up dropping the case and not banning him from banking.  The bank was fined 1 billion greenbacks and his manager $1 million for poor attitude in dealing with the authorities.

Jerome Kerveil    $7,200,000,000   losses

Jezzer had managed to work out how to hack Societe Generale's risk surveillance system in 2007. He worked on the arbitrage desk and was supposed to play long short indices trades. In reality by Jan 9 2008 he went long only on 30 billion euros of Eurostoxx contracts, 18 billion euros  Dax futures and 2 billion euros of FTSE. I read somewhere that his total book position in the end was 73 billion usd.  

  The date should stand out as important - it was the beginning of the sub prime crisis.  By the time the bank back office discovered there was no hedge against these trades on Jan 18 they were already in the hole by 1.4 billion dollars. That plus the news leaking out and Soc Gen's share price plunging 8% means that Jezzer is clearly a winner. Getting out of everything in a firesale over the next few days cost the bank 7.2 yards.

The kicker in all this is he only spent 5 months in prison and is now working as an IT consultant.  

Howard Hubler III

Howie comes in at number one for me (aside from Bernie Madoff of course). His 9 billion dollar loss in 2007 stands out as a testament to the fact that bandwaggons often crash.  At the time he was a bond trader with 8 others at Morgan Stanley and his group was responsible for 20% of the bank's profits. He caused the losses by being long sub prime and short CDS against them. The MBS went on to lose 93% of their value.  Rather than face any form of prosecution he was paid 10 million when he left the bank in back pay.