A hidden world of business, banking and bad decisions

THREE years ago, Jerome Kerviel, an options trader, lost French bank Societe Generale around £3.7billion.

The single most costly occurrence of rogue trading in history, the revelation wiped tens of billions of pounds off shares on the London Stock Exchange.

The bank said he had hidden his activities using “a scheme of elaborate fictitious transactions.” According to Christian Noyer, governor of the Bank of France, Kerviel “breached five levels of controls” in the bank, and was “a genius of fraud”. Ironically, however, it is understood that the trader made no personal financial gain from his actions.

Kerviel was jailed last October for three years, and ordered – somewhat optimisically - to repay his former employers the amount he cost them. He has appealed, claiming the bank knew about the risk-taking.

The best known scandal, even though its losses have since been surpassed by other controversies, remains Nick Leeson causing the collapse of Barings Bank. It was left in ruins after the Singapore-based futures trader ran up liabilities worth more than the entire capital and reserves of the institution – around £800 million in all.

After being arrested in Frankfurt, Leeson spent a few fraught months trying to avoid extradition to Singapore.

He failed, and in 1995, a court in Singapore sentenced him to six years in prison. Barings was subsequently sold to Dutch bank ING for £1.

After serving four years behind bars, Leeson has made good on his infamy. Two books have been published about his life, while Ewan McGregor played him in the film Rogue Trader. He now lives in Galway in Ireland, where he was CEO of Galway United football club until February. He remains a shareholder in the side, and works as an after-dinner speaker.

Japan’s most notable rogue trader was Yasuo ‘Mr Copper’ Hamanaka.

He was sentenced to eight years in prison for billions of pounds of unauthorised copper trading while working for Japan’s Sumitomo Corporation.

The wreckage of his transactions emerged in 1996, and accountants found Hamanaka had incurred losses of £2.6bn over the course of the previous decade.