A One Man headache from Tennessee for MF Global

For nearly two decades Evan Dooley quietly made a living trading commodities like wheat in his home state, Tennessee, far from the hurly-burly of Wall Street.

But on Thursday Mr. Dooley, 40, became the talk of the financial markets when MF Global, the giant commodities brokerage firm, accused him of making unauthorized trades that led to $141.5 million in losses for the firm. Mr. Dooley, the firm said, wagered on wheat futures with money he did not have.

Mr. Dooley, who worked in the firm’s Memphis office, had bought as many as 15,000 wheat futures, the equivalent of about 10 percent of the market for these contracts for any given month, company officials said. MF Global discovered the trades early Wednesday morning and ran up the losses as it desperately unwound the positions in a volatile market.

“This is a very disappointing situation for us,” said Kevin Davis, the chief executive of MF Global, in a conference call with investors and reporters on Thursday. The company’s stock plunged nearly 28 percent.

It was the second high-profile case of a single trader’s bad bets causing losses for a global financial firm. MF Global’s troubles, however, are small compared with the multibillion-dollar hole left in Société Générale after Jérôme Kerviel secretly wagered the bank’s money on stock futures.

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Posted in * Economics, Politics, Economy, Stock Market

4 comments on “A One Man headache from Tennessee for MF Global

  1. Wilfred says:

    I have noticed we only hear about “unauthorized trades” that [i] lose [/i] money.

    Is this because when they make money, the profits are quietly pocketed by the firms which did not authorize them, or what?

  2. Sick & Tired of Nuance says:

    How much did his CEO make and all those charged with overseeing his work? Where is their due diligence? What did they do to protect their shareholders? What will the board of directors do about the management team that allowed this to happen?

    Sure, Evan Dooley did something terribly wrong. There is no excuse. But what about those above him who set up the situation?

    I am so tired of CEO’s running companies into the ground and getting multi-million dollar payouts. What this employee did wrong did not happen in a vacuum. The board of directors has a fiduciary responsibility to oversee the leadership of the company on behalf of the shareholders. They appear to have been negligent. Perhaps it is time for government regulators to step in and investigate.

  3. Kendall Harmon says:

    Hard to believe what has happened to MF’s stock price in the last two days:


  4. Robert Dedmon says:

    Don’t be too quick to confuse Memphis with Tennessee itself.
    The former is regarded by Tennesseans as the largest city
    in Mississippi, not that there is anything wrong with that.