The original rogue trader’s comment: Compliance is still an afterthought

THIS February marks 30 years since my rogue trading rocked the financial system and cratered Barings, Britain’s oldest and most venerable bank. I racked up US$1 billion in losses right under the noses of Barings’ management and compliance teams, staking vast sums of the bank’s cash in a desperate attempt to dig myself out of an ever-deepening hole. The walls came crashing down a day after my 28th birthday, with the bank declared insolvent while I fled Singapore hoping to avoid arrest.

My flight was in vain, and I was sentenced to six and a half years in jail for cheating. I did the crime, I did the time and – ultimately – I learned from my mistakes and came back chastened. If only the same could be said for the City at large. The recent news that Macquarie Group was fined millions by Britain’s Financial Conduct Authority (FCA) for allowing a rogue trader, Travis Klein, to book 426 fictitious trades to hide his losses should give every market participant pause. (In a statement, Macquarie acknowledged the penalty and said “the unauthorised trading did not affect clients, or the market, and no financial benefit or gain was derived by Macquarie or any other party directly from the activity”.)

The more things change, the more things stay the same.