I Was A Rogue Trader, But My Firm Didn't Fire Me

Rogue Trader

'There are many kinds of rogue trader, of course, although the public usually only finds out about the ones who end up doing great damage to their firms, like Barings' Nick Leeson or SocGen's Jerome Kerviel.

These are generally the guys who bet the bank - and lost. The rogues you don't tend to hear much about, however, are those (like me) who pushed the boundaries a little, and ending up making a lot of money.

No, I wasn't fired and I wasn't marched out of the firm in handcuffs. There was no prison time for me, and I wasn't hauled through the courts, or subjected to abuse from the media and general public. In fact, I was given a couple of very nice bonuses - and promoted because of the large amounts of money I made.

Don't get me wrong, I was no criminal (at least not in the legal sense). I wasn't forging confirmations, setting-up fictitious trades or anything like that. In fact, I did my rogue trading right out in the open - I was a totally transparent rogue trader, who breached his limits on a regular basis, and often ignored orders to cut back on my positions.

Of course, the risk and compliance teams were all over me (as was my boss), but during my 'rogue trading' career I was fortunate enough to mostly be in the black. And that was the problem - yes, I wasn't the most disciplined trader when it came to keeping to my limits, but the fact that my trading was profitable (although not always hugely) made it easier for me to dig in my heels, and more difficult for my firm to lose out on the profits they knew I was capable of delivering.

In the end, of course, I got my knuckles gently rapped a few times, but my limits were increased on each occasion. Luckily for me (and my firm), however, I knew when to stop - I realised that I was pushing my luck, and that one wrong move from me could mean huge losses for my firm (and, more importantly, it would have been the end of my career in the markets). In the end, that was one trade I was unwilling to make.

During my period of 'pushing the envelope', I amassed good profits for my firm, walked off with two big bonus cheques, and was able to leverage my position and achieve a career-defining move to a rival firm, where I now spend most of my time coming down hard on traders who breach their trading limits and ignore instructions from management.

I guess I was one of the lucky ones (and so was my firm), that things didn't go awry. You see, you are only a rogue trader if you lose money, and I got out before I did. Others have not been so lucky.

I break into a sweat sometimes, just thinking how close to the edge I used to sail. And I do wonder how many other undisciplined traders there are out there who are tolerated by their firms because of the profits they make. But it only takes one wrong turn, and that's what now keeps me on my toes, managing our trading book with a rod of iron'.

 

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