ed316
09-21-2006, 01:45 PM
Wall Street’s biggest losers
By making $5 billion vanish, hedge-fund trader Brian Hunter has joined an elite group of investors who have made some extraordinarily bad bets.
By MSN Money staff and wire reports
If there were a Bad Trade Hall of Fame, Brian Hunter would have just secured himself a prominent spot.
Losing $5 billion in a week will do that.
Hunter lost that amount earlier this month, according to The Wall Street Journal, making big, risky bets on natural gas prices for coming winters. Amaranth Advisors, a Connecticut hedge fund that employs Hunter, has informed investors that its assets under management fell from $9 billion to $4.5 billion since the start of September, according to the Journal.
It’s hard to feel too sorry for Hunter, who works out of his hometown of Calgary, Alberta. He still has his job with Amaranth, according to reports, and his winning trades last year helped him reap total compensation of more than $75 million.
But Hunter’s name, like Nicholas Leeson’s, will now be mentioned every time another huge bet goes sour in the global financial markets. Here’s a quick look at some of the most infamous losing trades in the financial markets. Brian Hunter, Amaranth Advisors
To say Hunter, 32, has had an up-and-down year doesn’t quite do justice to his 2006. According to the Journal, his account was up by $2 billion at the end of April. Then he lost $1 billion in May, made that amount back over the summer and finally took his $5 billion bloodbath last week. What’s behind the huge swings? Gyrating prices -- natural gas was above $15 per British thermal unit last December but just at $5 now -- and huge multi-billion-dollar positions, according to the Journal
Nicholas Leeson, Barings PLC
http://moneycentral.msn.com/content/data/images/64/RM/Leeson_*******_64.jpg</IMG>
Barings, at the time the personal bank of the Queen of England, collapsed in February 1995 after suffering more than $1 billion in losses caused by Leeson's massive bets on Japanese stocks. Leeson, just 28 at the time and working from Barings' office in Singapore, went so far as to create a new computer record to hide his trading losses.
In December 1995, Leeson was sentenced to six and a half years in a Singapore prison, from which he was released in 1999. In 2005, soccer team Galway United FC named Leeson its general manager. That same year, Virgin Books published his personal story/self-help book, titled "Back From The Brink, Coping With Stress."
Yasuo Hamanaka, Sumitomo
http://moneycentral.msn.com/content/data/images/64/RM/Hamanaka_*******_64.jpg</IMG>
Hamanaka was also known as "Mr. Five Percent," according to the New York Times, because he once bought as much as 5% of all the copper traded in the world each year. He pleaded guilty in 1997 to hiding more than $2.6 billion in trading losses and served seven years in prison. Copper futures plunged in 1996 after it was discovered that Hamanaka had artificially propped up prices.
John Rusnak, Allied Irish Bank
http://moneycentral.msn.com/content/data/images/64/RM/Rusnak_*******_64.jpg</IMG>
Rusnak lost millions for Allfirst Financial, an Allied subsidiary, by incorrectly gauging the movement of the Japanese yen against the dollar. He forged paperwork to cover further trades and losses he says he incurred in a failed attempt to win the money back for Allfirst, based in Baltimore, Md. He lost $691 million over five years before his activities were discovered in 2002.
In a federal prison in Hazelton, W. Va., Rusnak has taught personal finance to his fellow inmates, according to the Baltimore Sun. The “fat-fingered” Mizuho trader
A Mizuho Securities trader sold 610,000 shares in job recruiting company J-Com Co. for 1 yen apiece, instead of an intended sale of 1 share at 610,000 yen. Mizuho said it was unable to cancel the order, causing it to lose about $340 million. The mistake was attributed to the “fat-finger” syndrome, shorthand for gaffes made when traders hit the wrong button on a keyboard and lose a bundle.
The Tokyo stock exchange later acknowledged that a glitch in its system made it impossible to cancel the trade. Mizuho and the exchange have discussed sharing some of the losses, but have so far failed to reach an agreement. The Hunt brothers
Nelson Bunker Hunt and William Herbert Hunt bought more than 100 million ounces of silver bullion in 1979 and 1980, causing silver prices to soar to a record of more than $50 an ounce before a sharp plunge. After the crash, the brothers were left with silver obligations of $1.75 billion and a silver hoard of 59 million ounces valued then at $1.2 billion, indicating a loss of $550 million, according to the Journal.
The Hunts, whose fortune was once estimated at $6 billion, filed for bankruptcy protection in 1988.
http://articles.moneycentral.msn.com/Investing/Extra/WallStreetsBiggestLosers.aspx?GT1=8579
By making $5 billion vanish, hedge-fund trader Brian Hunter has joined an elite group of investors who have made some extraordinarily bad bets.
By MSN Money staff and wire reports
If there were a Bad Trade Hall of Fame, Brian Hunter would have just secured himself a prominent spot.
Losing $5 billion in a week will do that.
Hunter lost that amount earlier this month, according to The Wall Street Journal, making big, risky bets on natural gas prices for coming winters. Amaranth Advisors, a Connecticut hedge fund that employs Hunter, has informed investors that its assets under management fell from $9 billion to $4.5 billion since the start of September, according to the Journal.
It’s hard to feel too sorry for Hunter, who works out of his hometown of Calgary, Alberta. He still has his job with Amaranth, according to reports, and his winning trades last year helped him reap total compensation of more than $75 million.
But Hunter’s name, like Nicholas Leeson’s, will now be mentioned every time another huge bet goes sour in the global financial markets. Here’s a quick look at some of the most infamous losing trades in the financial markets. Brian Hunter, Amaranth Advisors
To say Hunter, 32, has had an up-and-down year doesn’t quite do justice to his 2006. According to the Journal, his account was up by $2 billion at the end of April. Then he lost $1 billion in May, made that amount back over the summer and finally took his $5 billion bloodbath last week. What’s behind the huge swings? Gyrating prices -- natural gas was above $15 per British thermal unit last December but just at $5 now -- and huge multi-billion-dollar positions, according to the Journal
Nicholas Leeson, Barings PLC
http://moneycentral.msn.com/content/data/images/64/RM/Leeson_*******_64.jpg</IMG>
Barings, at the time the personal bank of the Queen of England, collapsed in February 1995 after suffering more than $1 billion in losses caused by Leeson's massive bets on Japanese stocks. Leeson, just 28 at the time and working from Barings' office in Singapore, went so far as to create a new computer record to hide his trading losses.
In December 1995, Leeson was sentenced to six and a half years in a Singapore prison, from which he was released in 1999. In 2005, soccer team Galway United FC named Leeson its general manager. That same year, Virgin Books published his personal story/self-help book, titled "Back From The Brink, Coping With Stress."
Yasuo Hamanaka, Sumitomo
http://moneycentral.msn.com/content/data/images/64/RM/Hamanaka_*******_64.jpg</IMG>
Hamanaka was also known as "Mr. Five Percent," according to the New York Times, because he once bought as much as 5% of all the copper traded in the world each year. He pleaded guilty in 1997 to hiding more than $2.6 billion in trading losses and served seven years in prison. Copper futures plunged in 1996 after it was discovered that Hamanaka had artificially propped up prices.
John Rusnak, Allied Irish Bank
http://moneycentral.msn.com/content/data/images/64/RM/Rusnak_*******_64.jpg</IMG>
Rusnak lost millions for Allfirst Financial, an Allied subsidiary, by incorrectly gauging the movement of the Japanese yen against the dollar. He forged paperwork to cover further trades and losses he says he incurred in a failed attempt to win the money back for Allfirst, based in Baltimore, Md. He lost $691 million over five years before his activities were discovered in 2002.
In a federal prison in Hazelton, W. Va., Rusnak has taught personal finance to his fellow inmates, according to the Baltimore Sun. The “fat-fingered” Mizuho trader
A Mizuho Securities trader sold 610,000 shares in job recruiting company J-Com Co. for 1 yen apiece, instead of an intended sale of 1 share at 610,000 yen. Mizuho said it was unable to cancel the order, causing it to lose about $340 million. The mistake was attributed to the “fat-finger” syndrome, shorthand for gaffes made when traders hit the wrong button on a keyboard and lose a bundle.
The Tokyo stock exchange later acknowledged that a glitch in its system made it impossible to cancel the trade. Mizuho and the exchange have discussed sharing some of the losses, but have so far failed to reach an agreement. The Hunt brothers
Nelson Bunker Hunt and William Herbert Hunt bought more than 100 million ounces of silver bullion in 1979 and 1980, causing silver prices to soar to a record of more than $50 an ounce before a sharp plunge. After the crash, the brothers were left with silver obligations of $1.75 billion and a silver hoard of 59 million ounces valued then at $1.2 billion, indicating a loss of $550 million, according to the Journal.
The Hunts, whose fortune was once estimated at $6 billion, filed for bankruptcy protection in 1988.
http://articles.moneycentral.msn.com/Investing/Extra/WallStreetsBiggestLosers.aspx?GT1=8579