Rogue Trading within Bank Industry about Nick Leeson Research Paper

Rogue Trading within Bank Industry about Nick Leeson - Research Paper faceThe research tells that corporate scandals can be of different types and in any kind of corporate scandals generally top executive managements are involved repayable to personal gains and other biasness. Corporate scandal may include the offences deal frauds, insider work, manipulation of financial statement for misguiding stakeholders, excessive compensation to top executives etc. Among these scallywag trading is excessively a kind of corporate scandal which hurts investors interests. Generally, those traders who are authorized by corporate bodies as an employee indulge in such activities. The knave trader acts as an independent trader in high risk environment. To make huge profits, such traders invest in risky financial instruments like derivatives. Here the potential of losing money is also high. Ethically responsible firms never allow such risky investments considering shareholders interest and busi ness sustainability. Since the rogue trading good example of Nick Leeson in 1995, there have been several instances of unethical and unauthorized trading that caused billions of losses to shareholders. The persons found to be engaged in rouge trading are charged with severe offences and have to face legal consequences. The rogue traders have taken the investments activities to the level of gambling where along with huge returns, risks are also too high. In most cases rogue traders keep doubling their bets in order to recover the previous losses without considering future consequences. The tricks doubling up the bets are quite common for them for camouflaging the previous losses with higher level of risk as by averaging down, they try to reduce the volatility. In a simpler term, when a