Failure to Track Your Trading Could Cost You Millions!
May 6, 2009
There’s a story on the Bloomberg site today with the title MF Global Told to Pay U.K. Trader About $30 Million. It details a case where an account manager misled a day trader into believing that he was making money when in fact he was losing money. The trader ended up blowing up a nearly 10 million pound trading account.
“Gill had sought at least 9.3 million pounds over claims that in 2001 and 2002 an MF Global account manager, who has since left the firm, told him he was making trading gains when he was losing money. Gill claimed he would have changed his strategy if correct information had been provided. Instead, he wiped out a trading account with almost 10 million pounds.”
I am, of course, all for penalizing those who intentionally deceive, so I have absolutely no problem with MF Global having to pony up some cash for this.
I can’t help but wondering, though.
How could this guy not know he was losing money? I mean seriously. If you’re trading an account worth millions shouldn’t you at least be able to track your P&L? At a minimum it is good practice to keep your own records in case there is some kind of goof up with your broker (or outright fraud as it seems in this case). A big part of me thinks this guy should be made to learn a major lesson for his own short-comings here.
Comments?
Struggling with support & resistance and knowing what the key market levels are? Check out the Price Distribution Analysis methods I use.
There should be no room to blame the victim. To learn a lesson or not is the prerogative of the person who has been defrauded. The MF Global Mutual Fund Manager should simply be hanged.