SUMITOMO

Laurent L Jacque

Chapter 7 in Global Derivative Debacles:From Theory to Malpractice, 2015, pp 97-101 from World Scientific Publishing Co. Pte. Ltd.

Abstract: On June 13, 1996 Sumitomo reported a staggering loss of $2.6 billion due to copper trading activities on the London Metals Exchange. Sumitomo — one of the largest and oldest Japanese trading companies—laid the blame unambiguously on its former chief copper trader Hamanaka Yasuo: “These transactions were made solely by Yasuo Hamanaka himself. Hamanaka abused Sumitomo's name, and continued on with such unauthorized trading.” The losses had apparently accumulated over a period of several years and one wonders how the cash-flow trail of trading losses could go undetected for so long: was Hamanaka truly acting alone? Or was Sumitomo engaged in a grand scheme of copper price manipulations and using Hamanaka as a scapegoat when found out…

Keywords: Derivatives; Debacles; Options; Swaps; Futures; Forwards; Financial Engineering; Market Manipulation; Rogue Traders; Speculation; London Whale (search for similar items in EconPapers)
Date: 2015
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