A rogue trader lost $320 million on wrong-way oil bets, prompting Mitsubishi to fire the person and alert police

REUTERS/Kim Kyung-Hoon

• A rogue employee at a unit of Mitsubishi Corporation used unauthorized trades to bet on oil markets.
• Petro-Diamond Singapore, a Mitsubishi Corporation unit, "expects to book a loss of approximately $320 million from its trade of crude oil derivatives."
• The company discovered the trades in August and this week fired the employee and alerted police in a complaint.
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A rogue employee at a unit of Mitsubishi Corporation used unauthorized trades to bet on oil markets, disguised them to look like "hedge transactions" with customers, then lost millions when the market went south.

The employee, at Petro-Diamond Singapore, a Mitsubishi Corporation unit, had been building the positions since January, Mitsubish said on Friday, confirming "that it expects to book a loss of approximately $320 million from its trade of crude oil derivatives."

The falling crude oil price since July translated into "large losses," it said. The company discovered the trades in August and fired the employee and filed a police complaint this week.

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The sudden move in Brent crude caught traders by surprise. The price of Brent crude has settled since Saudi officials sought to ease supply concerns, and Brent is currently hovering at about 7% higher for the week.

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Oil surged this week after attacks on Saudi oil fields.