The recent post by the rogue trader who never got fired stands as a stark reminder of what is wrong with our industry.
Simply put, money talks. If you push the envelope but make money, you can leverage that profit to keep your bosses at bay. And regulators remain powerless if the firms they monitor allow employees to simply game the system.
The very fact that a trader is only a rogue if he (or she) loses money is reckless in the extreme, and any boss that turns a blind eye to traders breaching limits because of his P&L should be taken out back and shot. This is the very type of behaviour that got us into the financial crisis in the first place!
No rogue trader executes a trade to lose money, but eventually many of them will. And it only takes one big case (like Leeson and Kerviel have shown) to cause serious damage to a firm. Remember, when rogue traders get themselves in a hole, they often double up in a (usually futile) attempt to recover their losses and save their jobs. And that's the road to disaster.
Traders have limits for a reason. Learning when to quit winning (and losing) positions comes with the territory. Trading is not a game for folks who are off the reservation.
In my view, this post is symptomatic of the problems we still face in our industry. We need far greater oversight in the financial markets; we need more ethics training; we need mandatory drug testing; and we need to punish wrongdoers with instant dismissal, loss of earnings, bonuses and anything else we can throw at them. We must also remember that a rogue trader is still a rogue - whether he makes money or not!