Premium Essay

Rogue Trader

In: Business and Management

Submitted By 1divagirl
Words 888
Pages 4
Rogue Trader

How many times can you go double or nothing before you wind up a billion pounds in debt? In “Rogue Trader”, a film based on the life on Nick Leeson, we get a glimpse into this real world dilemma. The drama begins with Leeson’s promotion to general manager of Barings Futures Singapore. As general manager, he faces a personal quandary and must decide whether to cover for a friend and coworker who made an honest mistake (one that resulted in the loss of a substantial amount of money) or to turn the same person in to face termination. Leeson chooses loyalty to his friend over loyalty to the bank, and covers up the losses by creating an error account. This account served to hide said losses while Leeson tried to make back the money that was lost. After experiencing additional losses, Leeson hit a lucky streak and was able to make up the money due to market growth. However, the profound effects of making so much money in the market quickly got to his head. Riding on the coattails of this success, coupled with other catalytic factors that created another loss, he was once again put in the same position to make up lost dollars in the market. From this point on, we see Leeson gamble on the market, doubling down and hiding his losses from everyone around him until his debt becomes insurmountable. Based on Leeson’s actions, the two COSO components most violated are risk assessment and control activities, of which many examples can be seen throughout the movie.
Risk Assessment is a crucial part of any gamble, not the least of which includes the trading of stocks. However, in “Rogue Trader”, risk assessment is something that is constantly overlooked, leading to risky or poor choices being made. The first example of this can be seen in the scene where the Barings’ Board of Executives meet in London to discuss the amount of money invested into Barings Futures…...

Similar Documents

Free Essay

Traders Psychology

...это сразу скажется на торговле. 2) Воспринимайте трейдинг не как увлекательное дело, а как самую обычную работу. Возможно, это звучит спорно, но… Нашим словам есть очень легкое объяснение. Во время торговли ваша голова должна быть чиста – никаких эмоций. А если у вас эйфория – вы уже не адекватно воспринимаете происходящее и можете потерять деньги 3) Обязательно заведите хобби, которое будет расслаблять вас и придавать энергию. Торговля на фондовых рынках – энергоемкий процесс, и вам нужно научиться быстро восстанавливаться. 4) Не спорьте с базовыми принципами. Постоянно держите их в голове, они сэкономят вам кучу времени – быстрее начнете понимать суть. 5) Ни в коем случае не боритесь с рынком. Вспомните фильм rogue trader – и посмотрите, чем закончилась борьба с рынком. Плывите по течению, и у вас все будет хорошо. 6) Отпускайте упущенные акции, не концентрируйтесь на убытках. Их, конечно, надо осмысливать, но если будете слишком много думать о них – завязнете в депрессухе. 7) Общайтесь с другими трейдерами и инвесторами. Когда вы будете видеть, что через похожие проблемы проходят все биржевики – не будете думать, что вы один такой, и будет легче со всем справиться. 8) Если у вас убыточная серия – лучше на пару дней перейти на бумагу – так вы сможете реабилитироваться и при этом не потерять деньги. Как только увидите, что все опять окей – вернетесь на реал. 9) Не пытайтесь отбиться. Иначе потеряете адекватную оценку......

Words: 373 - Pages: 2

Free Essay

On Leaves, Rogues and Rivalries

...On Leaves, Rogues, and Rivalries Sitting on the front row of my Fine Arts class and watching a film about the artist Gianlorenzo Bernini, I was enthralled with the real “power of art”. Seeing the story of Apollo and Daphne in action was mesmerizing. Looking at the marble-turned-flesh self portrait of Bernini was astounding. Best of all, gazing at the vision of St. Teresa of Avila in ecstasy was an honor. A. Gianlorenzo Bernini in Arts Strengths. As an artist, Bernini knew a lot about human passion, feelings and emotions. He was able to depict the vision of St. Teresa of Avila in the most touching and inspiring angle through his use of a woman’s face in ecstasy. Being visited by an angel and filled by the love of God is pure heaven and happiness. God is the only way to truth and eternal happiness. This is the main point of this sculpture. He was able to capture and immortalize that bliss experienced by this nun who has this deep fervor for the Creator. The saint’s mouth was open as if she was moaning and her eyelids were half closed as if she was loving every second of the sweet torture. Another thing which was very amazing about him is that he can turn marble into leaves, trunks, clothes, and even flesh. Upon viewing his artworks, I was really flabbergasted with his Apollo and Daphne. I have read mythology and their brief love story was one of my favorites. But seeing the two characters in marble made me love the story more. Their flesh looked so real. It was as if I......

Words: 925 - Pages: 4

Free Essay


...Part 1 After watching the “Rogue Trader”, we can say that the main reason for the collapse of Baring Banks is the lack and inadequate internal controls under COSO combine with Nick’s fraudulent activities. The biggest deviation arises from the control activities, particularly the segregation of duties. When Nick Leeson got the job opportunity in Singapore, he was hired as the general manager of the trading floor and also was the person responsible for the settlement which means that he was making the trading transactions and at the same time recording and reporting them into the accounting system. It is a big problem because the positions assumed by Nick are related to generating revenue and doing the record keeping which are 2 areas that can create a conflict of interest, in retrospect those functions should have been held by two different persons and the communications process between them should be monitor to reduce the possibility of collusion or fraud. Another lack in control activities was the total absence of an authorization system. As we saw in the movie, when BeauMarchais asked him to buy 4000 contracts, even though the market average trade was 20000, he did not need any authorization nor anybody review the transaction to be sure that it was in accordance with the company objective. In another instance, he was able to transfer 7.8 billion yen between accounts. To avoid questionable situations and be able to make people accountable for their actions, they could...

Words: 844 - Pages: 4

Premium Essay


...FX OPTIONS TRADER HANDBOOK Understanding the relationship between CME FX Options on Futures and OTC Options. As the world’s leading and most diverse derivatives marketplace, CME Group ( is where the world comes to manage risk. CME Group exchanges offer the widest range of global benchmark products across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather and real estate. CME Group brings buyers and sellers together through its CME Globex® electronic trading platform and its trading facilities in New York and Chicago, and is in the process of launching a London-based derivatives exchange. CME Group also operates CME Clearing, one of the world's leading central counterparty clearing providers, which offers clearing and settlement services across asset classes for exchange-traded contracts and over-the-counter derivatives transactions. These products and services ensure that businesses everywhere can substantially mitigate counterparty credit risk. FX PRODUCTS CME – The Premiere Global Marketplace For FX Averaging $109 billion in daily liquidity and $220 billion in open interest,*CME is not only the world’s largest regulated FX marketplace, we are also the leading FX platform of choice for an increasingly diverse and global customer base. Our high-volume futures and options markets are growing at rates that continue to outperform the......

Words: 4582 - Pages: 19

Free Essay

Rogue Treader

...Société Générale (A): The Rogue Trader Jérôme Kerviel and his lawyer, Elisabeth Meyer Photo © Agence France-Presse 01/2011-5613 This case was written by Mark Hunter, Adjunct Professor, and N. Craig Smith, INSEAD Chair in Ethics and Social Responsibility. It is intended to be used as a basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. Copyright © 2011 INSEAD TO ORDER COPIES OF INSEAD CASES, SEE DETAILS ON THE BACK COVER. COPIES MAY NOT BE MADE WITHOUT PERMISSION. NO PART OF THIS PUBLICATION SY MAY BE COPIED, STORED, TRANSMITTED, REPRODUCED OR DISTRIBUTED IN ANY FORM OR MEDIUM WHATSOEVER WITHOUT THE PERMISSION OF THE COPYRIGHT OWNER. ST O O LS D EM O capital-to-assets fell too low. Often the problem was a difference in values between the time a trade was made and the time it was finalised. ACFI would identify and correct the discrepancy to reflect the final value. A controller identified in reports only as “Agent 6”, working in the Accounting and Regulatory Reporting sub-division of ACFI, noticed a problem with the Cooke ratio for eight trades that originated from a trading desk called Delta One early in January 2008. The desk’s main product was “turbo warrants”, which are a form of “barrier” options. Such options become active or inactive when a price barrier is breached. The barrier can be above or below the spot price of the option. The effect is to provide......

Words: 5388 - Pages: 22

Free Essay

Rogue Trader Assignment

...Rogue Trader: postmortem You recently graduated and just started employment at the New York office of one of the Big Four accounting firms. Your first week at the firm included presentations on the organization of the firm, as well as firm policies and procedures. Tomorrow morning, you begin a two-week training program on internal controls and you have a whole binder of information that you must read in preparation for the exercises and role-playing that are included in the training. You recognize most of the materials in the binder because you studied them in your ACC 409/609 class: The Committee of Sponsoring Organizations Report, Internal Control—Integrated Framework. You also notice that there are several cases addressing internal control issues. One case is the Barings Bank collapse and there is a video of this case that you and the other staff auditors will view as part of the training. You want to be prepared for the discussions during the training sessions, so you conduct some research on these topics, especially Barings Bank, because you are not familiar with that case. The COSO Framework You search the COSO website and find the 2013 Internal Control—Integrated Framework that outlines five essential components of any internal control system: (1) control environment, (2) risk assessment, (3) control activities, (4) information and communication, and (5) monitoring. This updated version of the Framework introduces 17 principles associated with the......

Words: 2441 - Pages: 10

Premium Essay

Trader Joes

...In what ways does Trader Joe's demonstrate the importance of each responsibility in the management process—planning, organizing, leading, and controlling? Trader Joe’s is a company that many fellow corporations aspire to be because of their ultimate success. But how did Trader Joe’s get so successful? Trader Joe’s success built from their understanding that a good team can only succeed if that have a good leader, as in leader I mean manager (which is one of the duties managers are suppose to be on top of). Managers are taught to comply with the four functions that make up the principles of management. These four functions are planning, organizing, leading and controlling. One could say that if a manager does not follow this guideline or a similar personal version of their own, they will not succeed in the management field. So how did Trader Joe’s understand the importance of these functions? First, Founder Joe Coulombe realized there was a gap in the market for grocery stores that offer quality products at low prices. At the time, all competitors either focused on one of the two. One example would be, Whole foods, which focuses on the quality of their food rather than the cost, giving them the nickname of “Whole Paycheck”. Another example, which focuses on minimizing the costs of the food would be Wal-Mart, which promises “guaranteed lowest prices” rather than top quality products. After realizing the need for an improved market, he started the planning to take his......

Words: 666 - Pages: 3

Premium Essay

Trader Jobs

...Job Satisfaction Trader Joe Kimberly Love Dr. Thomas Schaefer Business 520 Leadership and Organizational July 20, 2014 Trader Joe’s founder had a perception for his stores after vacationing in the Caribbean. He perceived that the customers would try new things while on vacationing. Also realized that less is better. Many time customers buy more when there is less to choose from in that store. Their attention is only selective when there is not a big variety of supplies. Trader Joe case describes the business practices and how they reinvented themselves. Trader Joe’s set themselves apart from the 7- Eleven style store they had and they became top competitors to Whole Foods and Dean and Deluca giants. The case gives a description on the history of the retail chain and various aspects of its unique business practices. The retail store offered a selection of exclusive, which were mostly private-labeled products, and replaced poorly performing products with new ones. Trader Joe’s is a small supermarket chain which offers a limited selection of unique food products at reasonable prices. It sales most of its products under the private label 'Trader Joe's' and its variants. T.J. targets its stores at highly educated and travelled, but not necessarily wealthy, segments of the population. Trader Joe has a team of experienced buyers, who does extensive traveling and research before bringing new products into the stores (Palmeri, 2008). Trader Joe also......

Words: 1245 - Pages: 5

Free Essay

Analiisi Rogue Trader

...Analisis financiero Rogue Trader. Nick Leeson entró a formar parte de la leyenda negra del mundo de las finanzas el jueves 23 de febrero de 1995 a las cinco de la tarde. En aquel preciso instante, a dos días de cumplir los 28 años, Leeson, un joven operador de bolsa británico, de origen humilde, encumbrado por sus superiores a la categoría de dios de las finanzas de la noche a la mañana, provocó la sonada quiebra de una de las más venerables instituciones financieras de Reino Unido, la banca Barings, con 223 años de historia a sus espaldas. La banca Barings, la misma que financió la compra de Luisiana por Estados Unidos, la que puso el dinero para la construcción del ferrocarril en la ruta de la seda, la que fue descrita por el cardenal Richelieu como la sexta potencia del mundo y que ayudó en la reparación de Francia tras Waterloo, terminó finalmente vendida por una libra al grupo holandés de servicios financieros Internationale Nederlanden Groep (ING), que prometió hacerse cargo de todas las deudas, devolver los depósitos y encargarse de los acreedores. Barings, todo un emblema del establishment británico, con clientes como Napoleón III o la mismísima reina de Inglaterra -quien al parecer perdió más de un millón de dólares tras la bancarrota-, estaba, para sorpresa de muchos, en las manos de un especulador de 28 años, que suspendió su examen de matemáticas para ingresar en la Universidad, y que dejó un agujero irreparable de 827 millones de libras (1.400 millones de......

Words: 1750 - Pages: 7

Premium Essay

Trader Joes the industry. Given an entire paragraph in the case study, the amount of dedication and care Trader Joe’s shows its crew members are to be envied by big box retailers. With starting benefits, 20 percent increase of pay compared to other peers in the industry and employee discount among others, one can say that management knows how to take care of its employees. The supporting reasoning for this level of support stems from the company’s main ideology and way of doing things that sets it apart from others. Starting at the top of the process, the planning has not derived very much from the founders initial vision for the company, even after being bought out by the Albrecht company. One fact that the public did not know for a long time is that in its infancy while still called Pronto markets, their competitors at the time were convenience stores such as 7-11 and Wawa. However, by changing the image, stock and culture of the company, Trader Joe’s has evolved into being placed into the bracket with big food stores such as Whole Foods, regardless of unique factors such as the location sizes and methods of revenue. Although Joe Coulombre decided the factors of his company over fifty years ago, the concepts still hold true by appealing to their smaller yet more dedicated choice of customers and relying on the same idea of minimalist choice offerings. From a marketing perspective, Trader Joe’s has successfully tapped into a niche that would be more readily willing to buy from a......

Words: 1081 - Pages: 5

Free Essay

Rogue Trader

...the essay should identify and justify your selection of 2 components of the COSO framework that were most violated in the rogue trader movie In Rogue Trader movie Nick Leeson makes unauthorized trades and covers up losses which are sufficient to bankrupt Barings bank. While management thinks that Nick brings large profits to the bank, Nick hides losses under fake error account which people think belongs to a customer. Leeson is able to cover up his losses because bank's management allows him to run both the trading floor and the back office facilities. Nick is afraid of management finding out about his first loss and does things such as finding a new client, requesting funding and so on, to hide his losses and show profits. However, Leeson incurred even more losses, which he is not able to hide in the end. It's not Nick Leeson who collapsed Barings, it's Barings' internal controls and standards that were not present or violated and allowed one employee to bankrupt long standing bank.   One of the most violated component of the COSO framework is the internal control environment of Barings. When Nick's unethical behavior at the bar got him to jail, management didn't care about his unethical behavior, all they cared about is to get him out of jail because he brings in a lot of profit. No one even sat down and talked to Nick in regards to his actions afterwards. Nick was given a freedom and power to act the way he wanted. Management didn't check or control him. When management...

Words: 678 - Pages: 3

Premium Essay

Trader Joe

...John Smith MGT 280 20 January 2016 Case 1 Analysis Questions 1. Trader Joe’s demonstrates the importance of each responsibility in the management process: • Planning- Trader Joe’s demonstrates this in its ‘Cost Control’ section. The company prides itself on its thriftiness and cost-saving measures. The company does this by providing delicacies from all around the world in small stocks making each product fight for its place on the shelf. This process enables customers to make easier decisions on which item to purchase. • Organizing- Trader Joe’s demonstrates this in its ‘From Corner Store to Foodie Mecca’ section. The company states that many different individuals are attracted to the delicious foods and the laid-back but enthusiastic customer service. The company also states that its employees and managers greet customers with smiles and are quick to engage in friendly conversation. This allows the customers to enjoy the atmosphere of the store and as stated by the company, “Shopping at Trader Joe’s in less a chore than it is immersion into another culture”. • Leading- Trader Joe’s demonstrates this in its ‘Strength from Within’ section. The company inspires its employees to work hard to achieve high performance by providing numerous benefits for them such as medical, dental and vision insurance. In addition to this, employees earn up to 20% more than other chain grocers. • Controlling- Trader Joe’s demonstrates this in its ‘Customer Connection’ section.......

Words: 459 - Pages: 2

Free Essay

Rogue Trader Coco Assignment

...Rogue Trader Name(s) ___________________________ Accounting information systems ____________________________ I understand that this exam is to be completed by myself or in a team of two and that any assistance received from other students or any unauthorized source is cheating and subject to the appropriate disciplinary action as deemed by the Office of the Dean of Albers School of Business and Economics. I (we) am aware of the exam policies / rules provided and agree to abide by them. _____________________________________ Student's Signature – Date _____________________________________ Student's Signature – Date Important: Make sure you read all the way through this assignment. Information regarding grading is included in the assignment instructions. “ROGUE TRADER” You are a new graduate, and you just got the job of a lifetime at the New York office of one of the big accounting firms. Yesterday, the managing partner, Connie Rise, set up an appointment for you to meet with her today. “Good morning,” she says, as you wonder what you have done to be summoned to her office at 8 a.m. You are still reeling from relocating to New York and working in this fast-paced environment. Here you are, plucked from a small city located among wine farms and rolling hills on the central coast of California and plunged right into the thick of things in New York City. But you love your new environment. You earn a great salary, pay exorbitant rent......

Words: 2531 - Pages: 11

Premium Essay

The Rogue Individual

...The Rogue Individual In today's constantly connected world, finding solitude has become a lost art. In fact, Western culture tends to equate a desire for solitude with people who are lonely, sad, or have antisocial tendencies. Solitude is the basis for individualism which is an essential aspect to a successful society because individuality reflects strength in a community as a whole. Self-reliant individuals together create a capitalist society in which people are forced to compete for success. Individuality spurs progress, originality, and self-sacrifice. However, expressing individuality is a weak action if it cannot be maintained in the real world. Upholding this is Ralph Waldo Emerson who states in his essay Self Reliance, “It is easy in the world to live after the world’s opinion; it is easy in solitude to live after our own; but the great man is he who in the midst of the crowd keeps with perfect sweetness the independence of solitude” (Emerson 146). Society and individuals are bound by a harmonious union in which the productive outcomes of individuals who spend time alone collectively lead to a progressive civilization. Although Emerson’s nonconformist ideals may come off as selfish when he declares, “What I must do is all that concerns me, not what the people think,” the principle of self-reliance is a significant and valuable asset to have for a gratifying life. The more self-reliant people are, the more they can help others. Justified by the fact that those who......

Words: 1029 - Pages: 5

Premium Essay

Rogue Trader Paper

...Rogue Trader COSO Control Questionnaire Control Environment: 1). The possibility of Nick Leeson being able to defraud Barings can be explained by the lack of management supervision. Since Leeson was making a lot of money for the company, senior executives didn’t punish him. Here are three examples of this: * The funding kept coming even after company realized that Singapore law had funding restrictions * Senior Executives didn’t punish Leeson for the violations he had committed * After Leeson was arrested, management didn’t seek any ways to comment on his actions. 2). Barings bank was more concerned with the bottom line profits rather than compliance with the code of conduct. The film didn’t exactly show if Barings had a code of conduct for its employees. However, it is reasonable to assume that there was one. Nevertheless, senior executives allowed key employees, who were generating sufficient profits for the company, the freedom of actions. 3). The performance and incentive compensation targets portrayed in the movie were unreasonable and unrealistic. For instance, Leeson got a call in the middle of the night from the Head of the Barings Financial Products Group in London, Ron Baker, telling Leeson that he has to generate another two million pounds next month to secure their bonuses. Such unrealistic goals provoked Leeson to manipulate incentive compensation plan results by hiding losses in an account 88888 to make various transactions look......

Words: 2103 - Pages: 9