The Wall Street Journal: Rogue oil trader in Singapore loses $320 million

Japan’s Mitsubishi Corp. MSBHY, -3.25%   said a subsidiary has lost about $320 million on energy derivatives, after a rogue employee in Singapore entered into secret unauthorized trades and then lost money as crude prices fell.

Mitsubishi said on Friday it had quickly closed the positions, which it uncovered in August when the employee was absent from work. It said it fired the employee on Wednesday and filed a complaint with police in Singapore the following day.

“[Mitsubishi Corp.] recognizes the seriousness of this matter and shall be redoubling efforts throughout the entire MC Group to ensure that it does not happen again,” it said.

The Japanese trading house said it was examining the potential impact on earnings for the current financial year from the losses at the unit, Petro-Diamond Singapore (Pte) Ltd.

The company said the employee, who was handling crude-oil trades with China, had disguised the derivatives trades as hedges, and manipulated data in the unit’s risk-management system. Mitsubishi said the trader is a male Chinese national, but didn’t disclose his name. It said his whereabouts were unknown.

Read the full version of this article at WSJ.com.

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