Merrill has discovered that a London-based trader who said he made $120 million last year actually lost $400 million. Merrill describes this as “an irregularity.” The trader described it as “a misunderstanding.”
FT: A Merrill Lynch currency trader has been suspended after racking up more than $400m in undisclosed losses in recent months, raising further questions about the financial health of the investment bank bought by Bank of America last September.
Merrill is poring over the books of Alexis Stenfors, a London currency trader, who was suspended after Norwegian and Swedish currency trades went wrong, according to people familiar with the situation. Merrill is in talks with UK regulators…
Mr Stenfors could not be reached for comment and his lawyer’s office directed calls to Merrill. The New York Times said he had told the newspaper the matter was a “misunderstanding” and that his lawyer had said he was co-operating with the investigation.
The trading loss of $400m would cut into, but not erase, the profits of Merrill’s rates and currency operations, headed by David Gu, in London. Mr Gu’s operations are believed to have generated several billion dollars in profits last year.