Don’t press THAT button, it’ll cost you millions! Bungling Deutsche Bank FX trader pays £4 million to US hedge fund by mistake
As if troubled financial institution Deutsche BankDeutsche Bank AG (FRA:DBK) does not have enough concerns about the size of its outflow of cash compared to its inflow, compounded by regulatory fines and class action lawsuits relating to various accounts of malpractice during the past few years. Yesterday, it was revealed that a further has hit […]
As if troubled financial institution Deutsche BankDeutsche Bank AG (FRA:DBK) does not have enough concerns about the size of its outflow of cash compared to its inflow, compounded by regulatory fines and class action lawsuits relating to various accounts of malpractice during the past few years.
Yesterday, it was revealed that a further has hit the bank in the pocket to the tune of almost £4 million as a result of a junior member of Deutsche Bank’s FX trading team erroneously adding several zeros to an FX trade whilst his boss was on vacation.
Looking the other way?
The trade, which took place in June this year, raises serious questions about supervision of the trading desk at the financial giant, which is one of the six major banks that handle a vast proportion of global FX order flow. One of the main concerns that this is likely to highlight is how well the bank supervises the procedure of having each trade vetted by another person before it is processed.
Colloquially known as a ‘fat fingered trade’, referring to the lack of dexterity which could cause incorrect or additional number keys to be pressed during the entry of a trade, this practice is something of an occupational hazard for city traders.
The money was of course returned by the hedge fund to Deutsche Bank, however the metaphorical egg on face is perhaps worse than the final consequence in this case.
