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Dutch Commodity Trading Firm Suffers Massive Loss, Blames It On "Rogue Trader"

Tyler Durden's picture




 

Two months ago, weeks before the carnage in Glencore started in earnest, we asked a simple question:

Judging by today's collapse in Glencore price - a company whose CDS we said in March 2014 should be aggressively bought - which is now trading at an all time low below 100p on a Goldman report which confirmed what we have been saying all along (more on that shortly), it does appear that the Swiss commodity giant and copper miner will be the first mega-commodity trader with trillions in counterparty exposure to be "Lehmaned."

But going back to July 22, what our tweet hinted at was not so much that one of the three commodity traders would be the first to blow up, as that the entire commodity-trading space is in jeopardy as a result of the collapse in commodity prices and carried inventory which has not been market to market in months (see the recent implosion in Jefferies fixed income results).

Indeed, one of the most surprising developments in recent months has been the relative scarcity of any high-profile commodity blow-ups or trader snafus, despite the tumbling commodity prices.

That changed today when Dutch grain-trading firm, Nidera BV (whose name is an acronym consisting of the countries in which it operates: Netherlands, India, Deutschland, England, Russia, Argentina) has suffered a crushing blow as a result of a "rogue trader" whose actions led to "significant losses" in the company's biofuels business.

According to a Bloomberg report, that Nidera CEO Ton van der Laan said the grain-trading house has since exited the biofuels business and closed all the deals linked to the losses. "There is a significant loss," he said on Thursday in a phone interview from Singapore, declining to provide a figure. He said Nidera will still post a profit for the company’s fiscal year, ending this month.

The actions of the trader "probably lasted for a prolonged time," and the company only "found out earlier this year," he said. Nidera notified the Dutch police because the trader "was involved in fraudulent action," he said, declining to elaborate.

What makes this case even more interesting is that Nidera is controlled by Cofco Corp., China’s largest food company, which took control of Nidera last year after buying 51% of the company to create a global agricultural commodities trading house. The deal valued Nidera at $4 billion, including debt, a person with knowledge of the matter said at the time. The rest of the Rotterdam-based company, established in 1920, is controlled by the founding families.

While the firm did not quantify the size of the loss (the number will surely leak over the next few days) but it is virtually assured that the company's profitability was massively impaired if not entirely wiped out: Nidera reported 2014 net income of $116.2 million, up from $72.7 million the year before.

The biofuel losses emerged after global prices plunged earlier this year, said van der Laan. Biofuels, made from crops including soybeans and corn, are closely linked to the price of crude oil.

Strange how "rogue traders" only emerge when trades go against them: we have yet to encounter a "rogue trader" case who was caught doing something illegal after generating a profit.

Those curious to learn more about Nidera's now defunct biofuels business are out of luck. As Bloomberg's Javier Blas shows, the webpage placeholder for the division is now 404-ing.

Finally, as Bloomberg reminds us while scarce in the past year, commodity trading houses have been hit by rogue traders in the past, causing big losses. In one of the most notorious cases, Yasuo Hamanaka, a top copper trader for Sumitomo Corp., hid $2.6 billion in losses trading the metal from its Japanese employer in 1996. In another case, a trader in the soybean market caused significant losses in 1999 to Andre & Cie SA that ultimately pushed the company, at the time one of the world’s largest grain traders, to its collapse in 2001.

Expect many more commodity blow ups in the coming months, all of which will be blamed on, you guessed it, rogue traders.

 

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Thu, 09/24/2015 - 12:26 | 6588715 MFL8240
MFL8240's picture

The circus by the NWO is starting to heat up.  More and more calamities on their way.  Sit tight and realize it is all by design to scare you into submission.

Thu, 09/24/2015 - 12:28 | 6588742 Looney
Looney's picture

Fat finger? Fat toe? Fat tongue?  ;-)

Looney

Thu, 09/24/2015 - 12:35 | 6588784 nyse
nyse's picture

Aaaaand that's why you dont mushroom stamp your trades..

Thu, 09/24/2015 - 12:52 | 6588903 Publicus
Publicus's picture

I bet there is taxpayer funded insurance for rouge trader protection now. If not, we should start one, the Elites should never lose against the little people.

Thu, 09/24/2015 - 13:13 | 6589033 Handful of Dust
Handful of Dust's picture

Speaking of commodities .... Free Corzine!

 

These companies can a learn a thing or two about moving money out lightening fast before a collapse.

Thu, 09/24/2015 - 13:25 | 6589116 insanelysane
insanelysane's picture

Wonder if it really was Corzine???

Thu, 09/24/2015 - 13:53 | 6589293 Boris Alatovkrap
Boris Alatovkrap's picture

In unrelated news story, Russian husband is suffer massive loss, is blaming on "Rogue Wife" with credit card.

Thu, 09/24/2015 - 18:40 | 6590679 LoveTruth
LoveTruth's picture

"US Rogue Wife" would be the correct statement. 

Thu, 09/24/2015 - 15:48 | 6589868 tarabel
tarabel's picture

 

 

There is.

But only for accounts with a balance greater than 100,000,000.

 

Oh, and paid up political contributions, of course.

Thu, 09/24/2015 - 12:26 | 6588718 Glass Seagull
Glass Seagull's picture

 

 

And said trader's name is "Janet Yellen."

Thu, 09/24/2015 - 12:28 | 6588740 KnuckleDragger-X
KnuckleDragger-X's picture

Time to start searching all the basements for those evil, evil rogues.....

Thu, 09/24/2015 - 14:15 | 6589401 Nothing Ever Happens
Nothing Ever Happens's picture

How hard can it be to find a whale?

Thu, 09/24/2015 - 13:54 | 6589295 Boris Alatovkrap
Boris Alatovkrap's picture

For porcelain bird you are very smart funny!

Thu, 09/24/2015 - 12:26 | 6588719 Sir SpeaksALot
Sir SpeaksALot's picture

more #QE is more money for banks, negative interest rates - less money for people. basically - complete wealth takeover

Thu, 09/24/2015 - 12:26 | 6588722 Spitzer
Spitzer's picture

gold won't go anywhere as long as US bonds are considered safe

Thu, 09/24/2015 - 12:29 | 6588728 MFL8240
MFL8240's picture

Who thinks they are safe, aside from you?  Opps, maybe Belgium?  Laughable!!

Thu, 09/24/2015 - 12:28 | 6588735 JustObserving
JustObserving's picture

He bought gold at 2:59 am and Fed dumped $20 billion of gold at 3 am?

Thu, 09/24/2015 - 12:28 | 6588737 NoWayJose
NoWayJose's picture

When your 'business' is to trade highly leveraged derivatives using free central bank money - don't ever guess wrong!

Thu, 09/24/2015 - 12:29 | 6588747 cougar_w
cougar_w's picture

They are claiming "rogue trader" so the loss won't spook the markets, in particular the algos. But I don't see how this could be anything other than a massive loss due to market dynamics. They might have been on the wrong side of a few trades, but there is probably no good deal possible anymore (except being short) and won't be for a long time.

Thu, 09/24/2015 - 12:30 | 6588753 Dr. Engali
Dr. Engali's picture

Rogue trader again? These people have no creativity when it comes to scape goats.

Thu, 09/24/2015 - 12:47 | 6588877 Thorny Xi
Thorny Xi's picture

Lone gunman doesn't work in a finance setting. Unless it's a nail gun.

Thu, 09/24/2015 - 12:32 | 6588766 venturen
venturen's picture

wait till the -5% interest annoucement...you want to see destruction

Thu, 09/24/2015 - 12:32 | 6588768 nnnnnn
nnnnnn's picture

its always someone else fault

Thu, 09/24/2015 - 12:34 | 6588781 Wile-E-Coyote
Wile-E-Coyote's picture

The rogue trader was an Indian guy living in a basement in west London. His mum said she had no idea, but admitted he is a very naughty boy.

Thu, 09/24/2015 - 13:24 | 6589109 DirkDiggler11
DirkDiggler11's picture

I was thinking this time instead of Kerviel, they would blame it on Evil Knievel himself before he passed ...

Thu, 09/24/2015 - 12:36 | 6588801 adonisdemilo
adonisdemilo's picture

Shit pile building up nicely, somebody needs to turn the fans on and spread all the "goodwill" where it'll be most effective.

Thu, 09/24/2015 - 12:38 | 6588816 GRDguy
GRDguy's picture

Nick Leeson's copycat.

Thu, 09/24/2015 - 12:41 | 6588835 Dragon HAwk
Dragon HAwk's picture

He wasn't a Rouge till he started loosing Money....

Thu, 09/24/2015 - 12:47 | 6588873 cougar_w
cougar_w's picture

Exactly.

Thu, 09/24/2015 - 12:42 | 6588839 firstdivision
firstdivision's picture

These trading commodity blow-ups seem to preclude total market collapses.  Roll to cash, gold, ammo, and tp.

Thu, 09/24/2015 - 13:00 | 6588952 Bastiat
Bastiat's picture

preclude? - I do not think it means what you think it means.

Thu, 09/24/2015 - 13:58 | 6588977 firstdivision
firstdivision's picture

Edit* you're right.  I typed a totally different word than I meant.  preclude<> precede   I need to go back to doing coke.

Thu, 09/24/2015 - 13:36 | 6589190 Kprime
Kprime's picture

precede

predict

prophecy

 

Thu, 09/24/2015 - 12:43 | 6588845 astoriajoe
astoriajoe's picture

There are no rogue traders, only rogue trades. 

Thu, 09/24/2015 - 13:39 | 6589214 Kprime
Kprime's picture

traders never lose

rogues always lose

Thu, 09/24/2015 - 12:53 | 6588902 SillySalesmanQu...
SillySalesmanQuestion's picture

I wonder if he is a brown skinned, subterranean dweller...?

Thu, 09/24/2015 - 13:06 | 6588998 Lokking4AnEdge
Lokking4AnEdge's picture

A couple of really big bankruptcies in the commodities arena will probably mark the bottom of this down cycle in prices....it always does......

Thu, 09/24/2015 - 13:27 | 6589127 insanelysane
insanelysane's picture

Some consider anyone buying stocks in the US market to be rogue traders.

Thu, 09/24/2015 - 13:38 | 6589206 Kprime
Kprime's picture

anytime there is a massive lose by a trader, it's rogue.  Rogue is the new lehoooseherrrr

Thu, 09/24/2015 - 13:59 | 6589326 youngman
youngman's picture

Biofuels says it all....a greenie gone bad...

Thu, 09/24/2015 - 13:59 | 6589327 moneylover3
moneylover3's picture

I love Rogue Traders and wanna become the same <3

But I have only -$0.0001 in my Trading Account :((

Thu, 09/24/2015 - 15:13 | 6589741 Ban KKiller
Ban KKiller's picture

You are perfectly set up! 

Thu, 09/24/2015 - 14:04 | 6589346 Troy Ounce
Troy Ounce's picture

 

 

Dutch should have some English language training:

 

https://www.youtube.com/watch?v=JGAMppuXf7U

Thu, 09/24/2015 - 15:49 | 6589873 tarabel
tarabel's picture

 

 

Anybody seen Dutch Boy around today?

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