Alexis Stenfors, a forex trader at Merrill Lynch, booked a roughly $120 million trading profit last year. The trouble is that risk officers from Bank of America, Merrill Lynch's new owner, think some of that has gone missing, less than a year after the Wall Street bank suspended an equity derivatives trader on concerns over his trading book.
Merrill Lynch released a statement: "During a recent evaluation of certain trading positions, we discovered an irregularity. We informed regulators immediately and are working closely with authorities to thoroughly investigate the matter. Senior managers of the business are focused on the issue and believe the risks surrounding possible losses are under control."
It sounds like he got so used to making money on his trades that he didn’t know how to stop booking profits when all he had was losses.
Merrill lost $13.8bn in the final three months of last year alone, and was forced into the arms of Bank of America in a deal over a weekend in September when it became clear the bank was likely to share the fate of Lehmans. Bank of America directors are demanding to know why many losses at Merrill did not appear on the books at the time of the deal.
Well they would, wouldn't they?