It’s not a multibillion-dollar crime unless you get caught, right? That’s the question financial columnist John Gapper attempts to answer in How to Be a Rogue Trader, one of the most riveting business books of the season. Gapper analyzes what drove traders including Kidder Peabody’s Joseph Jett, Barings’ Nick Leeson and, most recently, UBS’s Kweku Adoboli to pull off some of the largest scams in Wall Street’s history. The book is a must-read for risk officers or anyone in charge of a trading desk.
For instance, Gapper says certain traits are shared by all notorious rogue traders: They’re perceived as outsiders in their white-shoe firms, and they compensate by being charismatic. They’re control freaks who have spent the formative parts of their careers in back-office jobs where trades are checked and settled. And they’re all very clever. The most mysterious flaw they share: When they have gambled themselves into such a deep hole that it is almost impossible for them to get out, they don’t stop. “They carry on until they are either caught or the loss rises to a disastrous level,” writes Gapper.
For instance, Gapper says certain traits are shared by all notorious rogue traders: They’re perceived as outsiders in their white-shoe firms, and they compensate by being charismatic. They’re control freaks who have spent the formative parts of their careers in back-office jobs where trades are checked and settled. And they’re all very clever. The most mysterious flaw they share: When they have gambled themselves into such a deep hole that it is almost impossible for them to get out, they don’t stop. “They carry on until they are either caught or the loss rises to a disastrous level,” writes Gapper.
