A Study of Unauthorized Trading and Its Influences on Investment Banking
How often do you see in the news that a rogue trader has been arrested? In this research project, we will aim to study unauthorised trading and assess how it influences investment banking general. The research will also help us have an improved mastery and a better understanding in the field of investment banking with a broader view of the repercussions faced by rogue traders, and also the full extent of the consequences the banks involved must assume and try to solve. We will also investigate the widespread of this practice in the UK and analyse how detrimental and lucrative it can be, in addition to the potential damages it carries for the bank. Also we’ll look at what the government has planned to reduce rogue trading and …show more content…
He gambled the firm’s capital on a boatload of Brazilian coffee that had arrived in port without a buyer. He bought the entire shipment and resold it at a quick profit. The first proof of his supreme confidence petrified the grey men of Duncan, Sherman. It was probably on the basis of this incident that the firm refused to make Pierpont a partner. In 1861, he struck off on his own forming J.P. Morgan and Company at 54 Exchange Place with his cousin James J. Goodwin.’
In the UK, it is said that the practice of unauthorised trading is very widespread. A piece by the Wall Street journals, which has looked into some rogue traders, reported that UK financial regulators are examining possible cases of unauthorised trading within London banks. The journal also wrote that the current investigations, as well as a handful of less serious cases over the last few years suggest that the problem of unauthorised trading occurs more often than is generally realised. It also raises questions about the abilities of banks to regulate their own traders. Rob Moulton, a partner at London-based law firm Ashurst LLP, said: ‘It does make you wonder how it could be so difficult to pick these up’. This is indeed a true statement.
In the hope of creating stronger and safer banks and due to large numbers of unauthorised trading cases in the UK, the government is planning to implement a ring fence. It will require banks that hold at least