Lure of the big money draws bankers to crime

Published on Thursday 7 February 2002 00:00

IN November 1990, Michael Milken, known as the junk bond king at US firm Drexel Burnham Lambert, was sentenced to ten years for securities fraud. Drexel filed for bankruptcy after paying $650 million in fines.

IN April 1992, Indian banks and brokers were accused of colluding to siphon $1.3 billion from the inter-bank securities market to fuel a boom on the Bombay Stock Exchange.

TWO years later, Wall Street brokerage, Kidder, Peabody & Co, fired Joseph Jett, the head of its government trading desk, after the firm uncovered a scheme creating phantom trades, resulting in a charge of $210 million after tax.

IN September 1995, Daiwa Bank, Japan’s fifth largest, suffered a $1.1 billion loss from unauthorised bond trading by its US executive Toshihide Iguchi. He was jailed for four years.

THE following September, Deutsche Morgan Grenfell faced a crisis when fund manager Peter Young breached rules at its British fund management arm, Morgan Grenfell Asset Management. The episode cost the company about 400 million in compensation.