Date

Company

Underlying

Description

1st 10 y

Lazlo Tauber

FX

$25 million, reported 8/94.

ABN Amro

FX

Mark to market errors of $70 million, reported 8/94.

2/86

Aussie banks

FX

With opening of financial markets, corporations swap into "low rate" Swiss against Aussie.  Subsequent franc rise brings defaults.

3/16/87

VW

FX

Bad forward positioning and control lose $281 million.  Trade parkikng with National Bank of Hungary.  Trader fined $5.2 million.

5/22/87

Apollo Comp.

FX

$5.7 million or 16 cents/share loss vs. analysts 23 cent earnings estimate, stock pummeled.

4/30/87

Merrill Lynch

Mortgages

$180 million loss in four days by mispricing IPO of IO/PO strip.  Howie Reuben sets up Bear Streans CMO desk.  See 4/1/94, and retires 8/8/99.

6/17/87

First Boston

Bonds

$100 million loss being short bond puts net.

10/19/87

First Options

Stocks

Customers with program of writing uncovered puts.  One made $20 million over previous four years, gave it up plus $60 million more in a day, First Options out $90 million which Continental Illinois looks to cover.

Stephen J. Lawrence

Equity puts

Loses $50m and owes Bear-Stearns $20.4m in 1991 arbitration settlement, and just before sends $7m offshore, 12/10/98.

7/21/88

Bankers Trust

FX

Forced to restate 1987 FX trading gains by $80 million (were over $300 million) for long-dated forward and options misvaluation.  The Andy Krieger saga - 4/5/88, 6/7/88, 3/34/88 and 8/12/90.

7/21/88

Bankers Trust

FX

Forced to restate 1987 FX trading gains by $80 million (were over $300 million) for long-dated forward and options misvaluation.  The Andy Krieger saga - 4/5/88, 6/7/88, 3/34/88 and 8/12/90.

7/21/88

Bankers Trust

FX

Forced to restate 1987 FX trading gains by $80 million (were over $300 million) for long-dated forward and options misvaluation.  The Andy Krieger saga - 4/5/88, 6/7/88, 3/34/88 and 8/12/90.

12/23/88

West Virginia

Treasury

Treasury Consolidated Investment Fund's Kathy Lester bond and bond option traded itself into a $164million pension fund hole. (1/13/89, 4/3/89, 3/22/91 - Salomon pays $15 mill., 2/20/92 Goldman pay $8.7 million ...)  2/6/95 jury verdict and district court $60 million judgement against Morgan Stanley is overturned by Wva state supreme court.

10/31/88

Kloeckner Oil

Oil

$224.3 million on oil futures, Deutschebank bails out.  8/94 reported to be $380m.

5/89

British Councils

Interest Rates

Labour-dominated local councils strapped for funds under Tory policies, sell caps and speculate on rate direction 1986-88.  Trades invalidated by British courts.  Litigation is still running (11/1/89, 1/26/91, 5/8/91,...).  Hammersmith and Fulham major cases.  12/93 Islington loses and will pay 1.14m pounds.

8/20/89

Mass Financial

Bonds

Years of covered bond call writing and high current yield leave few bonds long and total return misses bond rally (also losses on some naked call writes)

10/2/89

Chemical Bank

Rates

Crash in swaption volatilities (13 to 7.5) and "special model" lead to $30 million loss.

3/20/91

Allied-Lyons

FX

Write "covered" calls, based on volatility  view.  New and "aggressive" finance director.  Down 32 pence, a 6% price drop.  $265m or 150m pounds.

6/18/91

Bank of New England

Rates and FX

Must use futures market to hedge $36 billion notional portfolio as credit troubles shut out of interbank market.

early 1992

JP Morgan

mortgage

strips for $50 million, 9/29/94 reports loss of $200-300m led to Riskmetrics.

1992

JP Morgan

FX

Highly levered ERM trades lose $30m for 5 clients.  Four take deal with Morgan covering losses, one sues.  6/3/95 UK SFA fines Morgan 240,,000 pounds for infractions, and civil suit is still going.

11/21/92

Dell Computer

FX

David Korus, stock analyst, reports FX speculation losses in Europe and stock drops 10%.  2/3/93 - pull stock offering amidst market and reporting uncertainty, with 8% drop. Prospective 1994 option-related losses.

2/93

Showa Shell Seikyu

FX

$1.4b loss on forwards.

3/93

Japanese investors

Equity & FX

Nikkei-linked bonds, plus 3.4% yield pickup vs. principal loss if Nikkei down one-third.  It was.  Principal exchange rate linked bonds, 30 bp yield pickup and lost half of principal with yen appreciation.

3/93

Salomon

mortgage

$250m, reported 8/10/93.

8/93-8/94

Medari

rates

$50m in structured notes

Florida

mortgage

$99.6m for state treasury and League of Cities.

CIBC

fin. futures

$10m.

8/10/93

Nippon Steel

FX

$130m loss (another estimate $180m, 8/94).

10/2/93

Korean Chaebol

FX

unhedged positions leave losses up to 40% of profits, as Won up strongly vs. yem and moderately vs. dollar.

10/21/93

Louisiana Pension

Mortgages

ERS of $3 billion, since 1989 generating 20% annual returns.  IOs and Inverse floaters broke back, and losses of $50 million.  From Money Management Analytical Research (MMAR).  (8/94 report is $25m)

10/27/93

AIG

Swaps

Howard Sossin-led Financial Products sub. breaks off over policy differences.  Valuation differences lead to $90 million charge after $171 million gain in previous year.  Issue on value of long-dated (30 year+) rate and FX swaps.

10/28/93

Hyperion 1999

Mortgages

Term Trust closed-end fund losses 30% of value and is subjected to class holders suit.  Lewis Ranieri of Salomon MBS start managed.

11/1/93

Ohio municipalities

Mortgages

Bought interest-only mortgage strips as annuities.  Falling rates brought huge pre-payment of mortgage principal and annuity lives fell drastically.  (Many funds are underfunded nationally - 4/6/94.)

12/15/93

Banc One

Interest Rates

$318 million of $1.26 billion in earnings are derivative-based on $38 billion notional.  Stock price drops and stays down.

1994

Community Hospital

CMO

of Springfield & Clark County, Ohio, $17 million in compensatory damages and $4.5 million in punitive damages against Kidder.

1/10/94

Metelgesellschaft

Oil

Over $1 billion, mismatched futures-forward maturity gap, bailed out by German bank consortium. 10/16/94 pay Castle Energy $500m.)  Arthur Benson sues MGRM and Deutshebank (MG Refining and Marketing) for termination of contracts and himself.  93194 sells Metall Mining of Toronto for $335m.  1/27/95 CFTC 2.25m civil penalty.

Cargill

Mortgages

$ 100 million, 8/94.

4/1/94

Askin Capital

Rates

Massive mortgage-related "toxic waste" securities plummet in value, wiping our $600 million in managed fund's equity.  Firms dealing with Askin ravaged him on repurchase prices, 4/22/96, esp. Bear Stearns - Howie Rubin.

4/4/94

Bank Negara

FX

Malaysian central bank loses $2.3 billion in 1993, after even bigger 1992 loss, on forward currency trades -12/14/89.

4/12/94

P&G, Gibson, Mead ...

Rates

Levered swaps - accept LIBOR less a lot financing for accelerating losses as rates rise.  They did.  P&G down $102 m., Gibson initial claim is $73 m. (down to 20m and finally 6m, 12/24/94, BT MD Gary Missner fined $100,000 and barred for five years.), Mead 12.7 m.  and quite a few others, 4/21/94 - 4/15/94 .  What were past gains?  Artzt cuts own pay $100k  9/7/94,  Gibson sues BT for loses and $50 m punitive 9/13/94.  Judge keeps filings under seal, 4/26/96.  In previous three weeks, Judge has narrowed scope of the claims that the jury will hear.  5/14/96 BT and P&G settle, BT gets $35m and swap benefits of $14$m. 

4/15/94

Orange Co., Cal.

Rates

On 19.5$ billion 2-5 year Treasury pool and 20% in derivatives, put up $140 million in "collateral calls."  Contributing municipalities considering legal action.  Salomon Broathers engineers Chapter 9 bankruptcy end, 6/12/96.  11/96 Citron $100,000 fine and one year in jail.  1/97 Goldman issues $136m “quietly” for second issue.  6/97 Merrill pays $30m to end Orange County criminal probe.  Rausher Pierce of Interra Financial faces SEC action on $1.75b of bonds.  Supervisors consider surplus $16m to prepay bonds.  4/98 LeBoeuf, Lamb Greene & MacRae law firm pays $55m settlement.  5/11/98 Credit Suisse First Boston Corp. settles for $52.8m, and 1/98 $800,000 SEC fine.  Merrill eventually paid over $437 million as part of a civil settlement with Orange County, $30 million to resolve a criminal investigation and $2 million to resolve an inquiry launched by the U.S. Securities and Exchange Commission, 8/25/98.  Federal G-37 illegal contribution charge not pursued.  (In all, Merrill sold $875m Orange County bonds.)  10/26/98,  Los Angeles District Court Judge Gary L. Taylor last week upheld the legal authority of Robert Citron, the county 's former treasurer, to invest in the type of high-risk derivatives and dismisses suit against Fuji Bank.  Merrill to pay $32.5 million to 14 local California government agencies to settle, 2/7/00.

Kashima Oil

FX

$1.45 billion, 8/94.

4/18/94

Kidder Peabody

Bonds

Head trader Joseph Jett fraudulently books forward bond trades generating $350 million charge against income (no cash consequences).  Also, a $10 mil. amortizing swap charge.  Kidder sold to Paine Webber 12/94.  2/94 $10m French and Spanish gov’t T-bond losses by Peter Bryant, fired 7/94, censored by SEC 4/26/96.  GE cleared of liability in shareholder-derivative suit, 4/22/96. Jett supervisor Melvin R. Mullin settles SEC civil charges with $25,000 fine and “three month suspension as supervisor”.  12/96 some of Jett’s frozen assets freed.  7/22/98 Jett cleared of fraud, barred from associating with any brokerage firm, fined $200,000 and ordered to disgorge $8.21 million in allegedly false profits.  GE will pay its stockholders $19 million to settle class-action lawsuit.

Catepillar Financial

Caps and swaptions

$83 million, 8/94.

Arco pension

Struc. Notes

$22 million, 8/94.

Dell Computer

Rates

Levered swap and options lose $84.6 million.

5/12/94

Air Products

Rates

Levered swaps result in $60 million loss, and second $9 million write-off on standard swap positions, 5/17/94.  5/14/96 Air Products paid $67m of $107m 1994 losses.

6/8/94

Paine Webber

Mortgages

Paine-Webber adds $33 million to their Short-term U.S. Government Income Fund for mortgage-backed losses.  7/25/94 another $180 million needed beyond $88 million to date for year.  8/25/94 report to $268 million.

Piper-Jaffray

#1 rated gov't income fund returns -23.91% for year.  45 Minnesota municipalities among those taking hits.  8/25/94 losses of $800 million on $3.5 billion portfolio. 11/97 Worth Bruntjen leaves firm, which has paid $100min suits - $70m to 7,000 holders of Institutional Government Income Portfolio mutual fund and fined $1.25m by NASD but “no wrong-doing.”

6/10/94

Bank of America

$50.5 million on Pacific Horizon Prime Money Market fund.

J.P. Morgan

$50 million trading loss on mortgage strips (traders fired).

Harris Bank

$51.3 million, 8/94.

Barnett Banks

$100 million, 9/28/94

Unived Services

$93.25 million, 9/28/94

ABN Amro

$45 million, 9/28/94

Value Line

$40.45 million, 9/28/94

Union Bank

$20 million, 9/28/94

Wayne Hummer

$4 million, 9/28/94

8/94

Codelco, Chile

Metals

Juan Pablo Davila loses $200 million, 8/94.  Merill pays $25m to settle discpute on $170m in losses, 3/26/97.  Sues Winchester Commodities 1/7/98.

8/16/94

Fund. Fam. of Funds

21% of $30.4 million fund in inverse-floaters loses 22.2%.

8/25/94

Fleet Financial

Three Galaxy fund losses equal $5 million.

9/2/94

Northern Trust

Writes off $3.5 million derivative expense and removes from portfolio.  Losses at Wilmington Trust funds (8.8) and Zweig cash fund (0.4).

Paramount Comm.

Rates

Interest rate swaps lose $20 million.

7/13/94

Glaxo Holdings

Mortgages

$100 million loss predominantlyh on IOs, inverse-floaters and structured notes.

7/19/94

CSFB

Currency&indices

Make up $40 million in big client losses in asset management accounts from unauthorized derivatives trades.

9/13/94

1st Federal

Rates

Michigan Large mortgage-backed positions hedged by swaps, $30 million.

9/23/94

Odessa College

Rates

Principal only strips and inverse floaters lose $10 million.

9/25/94

Sandusky cty, OH

mortgages

$10 million loss, $5 million loss for Wyoming Shoshone reservation.

9/28/94

Vairocono Ltd.

Bonds

Highly levered position, with swap-option overlay loses $700 million.  Following 1992 return of 55% and 1993 at 63%.

10/13/94

Cuyahoga cty, OH

Rev. repos

Loss estimates of $100 million on levered bond positions.

1995

Union Carbide and Kodak

hedges

forced to unwind after P&G by senior management, John Fitzgerald and Steve ?, resp.

1/95

Seita (French Tobacco)

FX and rates

FF 252.7 million “due to failure to fully anticipate the impact of interest rate volatility, the poor performance of financial markets and some loss-making positions on certain contracts.”  (53m complex rate swaps, 33m vanilla rate swaps and 26m FX forward.)  Sues Salomon 8/96 for $29.8m for 1/31/94 $35m DM notinoal rate swap and 2/7/94 $15m $/JY swap.

2/95

Barings

Nikkei contracts

Simex/Osaka arb gets way out of hand with outright position, option sales and special account to hide losses.  Managers ok assignment of firm collateral to support trades, $1.4b.  11/12/98 Bondholders rejected a settlement that would have paid them just under $100 million, or 63.5% of the face value of the notes.  After Singapore jail time opf 3.5y of 6.5y sentence, Nick Leeson has first $100k speaking gig, 10/29/99.

3/95

SWIB

Structured Notes

State of Wisconsin Investment Board unwinding “transactions will have a minor effect on the overall performance of the fund and will not cause any losses to the fund’s principal.”  Then, $95m to rise to $130m.  37% of losses involve BT-related trades.

6/95

First Capital

index arb

’92 $200,00 tried to trade back and grew to $137m.  Traded of non-profits through Common Fund for Non-Profits Organizations and four partners fined $2.6m.

9/95

Daiwa

Treasuries

$1.1 billion over 11 years by Toshihide Iguchi.  Pleased 10/95 for four years and $2.6m in fines.  Bank pleads guilty to 16 fraud charges and $340 m fine.  Masahiro Tsuda, NY GM, two months in jail and $100,000 for not supervising – also disclosed participation in $30m loss in 80s and early 90s.

12/95

Michigan

int’l equity

1995 “paper” loss of $40 million on foreign stock basket derivatives turns into $172.8m “paper” gain by 3/96, 5/6/96.

1/96

Capital Insight

Treasury futures

S.D Goldinger managed positions for listed corporates and down

Pier 1, ParGrain Tech, …

$100m.

6/96

Sumitomo

Copper futures

Yasuo Hamanaka 10 year cumulative losses of $1.8 billion.  9/96 loss to $2.6billion.  10/96 guilty plea.  5/98 $150m CFTC fine, Britain's Financial Services Authority fined Sumitomo $8m.  5/99 Merrill faces CFTC civil administrative charge.  8/98 Sumitomo settles Federal suit for $99m.  Pays $42.5m class action settlement.  11/16/1998  Merrill ($18.1m) and Global Minerals & Metals ($16m) settle with futures trader group.  8/11/99 sues JP Morgan for $735m for complex derivative loan structures (had been reprimanded by federal and state banking regulators for lax management and controls in its base-metals business.)  Merrill to pay $275m, 5/25/00.

6/96

Zahid Ashraf

FX

Father built a family-owned company into one of the largest gold and silver trading businesses in the Persian Gulf, $250m, son lost $150 in spec through Refco.  Began losses 1994 with Republic Nat’l and shut down.  Went to Refco, ran through his account losing $22m in three days of 3/95.  At one point, BP futures with 3b notional.  Accessed brothers account and lost $91m.  Given time to work out, father discovered 7/97.  Sued Refco and lost owing $13m more, 4/8/99.

9/96

Merrill

CMO

$933,897 in payments to two elderly sisters advised into CMOs.

9/96

Chemical

MP FX

$70m by Victor Gomez in fraudulent trades.  Granted lighter sentence 4/4,7/97 of 37 months.

9/96

Grain Land Coop

“futures”

“Hedge to Arrive” Grain elevator contract problems, CFTC to deem futures.  $28 million owed fomr ~150 farmers in Blue Earth, MN.  Southern Thumb, MI, and Buckeye Countrymark, OH were also cited by CFTC.  Total loss estimates at $500m to $1b.

9/96

ATT pension

options

Bing Sung, former chief investment officer of Rhumb-Line Advisors

Mass. Pension Trust

loses $150m and $12 for respective clients.  RhumbLine agreed to a

censure and a $50,000 penalty. Its chief executive officer, John D. Nelson, agreed to a $10,000 penalty and a suspension from investment advising for three months, effective Oct. 12.  Losses began early 1995, and July and September 1996 Mr. Sung increased the magnitude and riskiness of his trading.

9/97

NatWest

Options

Kyriacos Papouis Model mispricing for $136m loss.

10/97

Vicotr Niederhoffer

Index options

Short otm puts generate $50m margin call from Refco and can’t meet on $103m investment accounts.

1/98

UBS

Equity deriv

200m SF ($135m) loss may go as high as 2b SF from Asian meltdown.

1/98

Peregrine Investments

FX swaps

5/26/98 HK 1 b ($129m) in assets and HK 2.54 liabilities, recovery likely to be 20-40%.  With Indonesia 10:1 derivative to loan ratio.  Total bond portfolio of $1.1 billion, of which $700 million were Indonesian bonds, according to Peregrine documents. In contrast, the Hong Kong-based investment bank's total foreign-exchange contracts and interestrate swaps outstanding before it collapsed were "in the magnitude of" $25 billion, according to Mr. Copley. Of that, 38%, or about $9 billion, were contracts with exposure to Indonesia..

3/98

Bank Exim

FX

12/97 has $2.23 b open position

3/98

JP Morgan

FX

$500m reserves for potential trading losses by four South Korean financial institutions.  Sues SK Securities and Housing and Commerical Bank.  Boram Bank blocked by Korean court form paying Morgan $189m on related 2/97 swape transactions.  May recover all but $55m of $575 in assets, 12/11/98.

3/98

Yakult Honsha

FX derivatives

Beverage maker loses $769m (100b Y) with derivatives and Asian currency drops.

7/98

LG&E Energy Corp

Energy forward

Shuts Down Electricity Trading, Posts $225 Million Loss After June Crisis

8/98

LTCM

Levered trades

9/23 Fed rescue consortium of lending banks (1/98 4b in capital

wiped out and have 3.65 b capital infusion.)  Matuirty spread

trades across Treasuries, credit spread reversion trades vs. Treasuries, foreign bonds including Russia and Dutch mortgages and large equity risk arb and long/short positions and total return swaps.  UBS losses $680m the hedged sale of call options exercisable in seven years and an equity investment in the fund of $266 million.  Chairman Mathis Cabiallavetta and three other top execs leave UBS, 10/5/98.

8/98

Springfield, IL

Electricity

August 1997, the municipal utility sold a yearlong $50 mw call to El

municipal utility

option

Paso Energy Corp.  Highest price was $7,500 mw surpassing previous year $350.  El Paso buy-in loss $7.4m. supplier.  Marketer Federal Energy Sales Inc., defaulted on call options it had sold to Springfield and others, the city utility in turn refused to honor its call.  Craig Perks, the senior utility electric-power marketer worked for Federal Energy while on 1997 three month leave.

8/98

Power Co. of America

Electricity

Southern Co. (51.8m), Entergy (43.3), and a power-marketing firm, American Energy Solutions Inc. (24.3), filed a joint Chapter 11 bankruptcy petition Monday against Power Co.  (Cinergy added 6.6m and 2^nd Q charge of $41m.)  Power Co.'s troubles were linked to the default of one of its electricity -trading partners, Federal Energy Sales Inc., of Rocky River, Ohio. Federal has been sued by FirstEnergy Corp., of Akron, Ohio, which is claiming $25 million in damages. Yesterday, the city of Springfield, Ill., also filed a lawsuit against Federal. The suit, filed in federal court in Springfield, alleges that Federal owes the city over $3.7 million for electricity . Springfield itself is facing several lawsuits from trading partners for its failure to deliver electricity.  $236m in claims against it (PacifiCorp also large), 9/03/98.  FERC finds no market manipulation in summer trading, but identified questionable practices, 9/23/98.

9/98

High Risk Opportunities

Russian GKO

$450 million fund used borrowed money to invest in ruble-denominated debt, GKOs, with a face value of $850 million. After the Russian government effectively defaulted on that debt on Aug. 17, 1998, the fund's lenders demanded more collateral on their margin loans.  1/20/00 sues for $1b from SG and Credit Lyonnais lenders for seizure of collateral.

10/98

Scudder Kemper

Treasury futures

Michael T. Sullivan III executed more than 100 unauthorized trades between July 1997 and October 1998 in 12 accounts, including Scudder Short Term Bond Fund.  Over the 15-month period, the bond fund lost $13 million on the derivatives trades and other accounts lost about $3.3 million.  Firm cited for inadequate oversight and failure to supervis. Without admitting or denying the findings, the New York firm paid a $250,000 fine to the SEC. Trader and another former Scudder employee were suspended from the investment-advisory business.

10/98

Ellington Capital

Collateral sale

UBS sold out Michael Vranos run firm collateral with subsequent suit for $85m in damages.  (UBS didn’t reveal sale prices in timely manner, see 8/98 – LTCM.)  10/14 sold $1b MBS.

4/99

Zahid Ashraf

FX

Father built a family-owned company into one of the largest gold and silver trading businesses in the Persian Gulf, $250m, son lost $150 in spec through Refco.

8/99

Kaufman Broad

Mortgage

Instead of simply hedging mortgage pipeline rate exposure, the trader in the past 30 to 90 days made various trades unrelated to Kaufman & Broad's lending activity, and loss is $11.7m.

11/99

Cinergy

Energy forward

Fails to deliver on fixed price electricity in July heat wave, loses $73m.

5/00

Klein & Co.

Futures margin

NYBOT division chairman, Norman Eisler, who had maintained artificially low margins with Klein, partly by helping to falsify market quotations.  When those quotes were corrected, it led to a catastrophic margin call that shut Klein down and halted some NYBOT trading pits.  NYMEX sues to ensure funds aren’t used to back up Klein.  With $4.5 million in debt, according to the suit. Klein, which, as a clearer, guarantees the viability of its clients' trades, had to use $2.65 million of its own funds to cover the deficit, leaving it below the exchange's $2 million margin requirement.

7/00

Microsoft

FX options

With June fiscal year must apply FAS 133 early.  Write down income $375m and OCI $75m after tax for OCI time value changes and ineffective hedges.  Generally, hedge foreign revenue forecasts.  Should reverse some with FAS 138 and DIG G-20.

8/00

California

Electricity

Utilities forced to buy only in spot market following deregulation and prices explode.  12/18 price caps discontinued after ups and downs over last two years.  1/17/01 Cal Ed misses payment, as does PG&E subsequently.  2/01 “small” Wellhead Electric Co. will cut supply to PG&E due to nonpayment.  2/2/01 Governor signs bill permiting long-term contracts and PG&E defaults.  3/6/01 Cal commits to $40b in long-term deals and looks to $10b bond issue for Water Agency funding of power buys.  3/28/01 retail rate increase approved.  4/9/01 PG&E energy sub seeks Chapter 11.  Duke offers to settle with state in “secret deal,” 5/2/01.  5/22/01 studies find little to support supplier collusion. 6/19/01 Ferc imposes price controls in the west.  PG&E pays Calpine $267m and others still disputed.  7/01 Cal bond issue grows to $12.5b.  Edison may bill for $3.3b in past power costs, 10/01.  10/5/01 Cal bonds don’t sell.

11/00

Asia Pulp&Paper

FX swaps

$220 million loss on two contracts with Deutschebank.  Contracts not reflected in 1997-2000 statements, 4/01 reported and facing $12b debt restructuring.

11/00

Lutheran -Missouri Synod

CMOs

1990 ok’d as fund advisor and assets grew $120m to $900m.  Mid-90s, bought nearly $100 million of the mortgage derivatives. By the late 1990s, these securities accounted for 40% of the foundation's bond portfolio.  By 1/99, $40 million loss and closed out.  Moellers joined 14 fellow Lutherans to sue the Lutheran Church-Missouri Synod Foundation, along with three foundation executives and Vining Sparks Inc., the Memphis, Tenn. bond firm.

3/01

Sears

Rate swap

Funded some of credit card portfolio with variable rate debt and hedged with fixed rate swap.  Rates moved against and unwound in 1997.  With FAS 133, no longer amortising loss annually and after-tax charge is $236 ($389 pre-tax.)

7/01

Amex

Junk/CDO’s

American Express Financial Advisors unit, the Minneapolis-based money-management arm loses $400m in junk and CDO’s, collateralized-debt obligations.  Packaged own deals and kept “toxic waste,” last 20% of payments.

10/01

Enron

RPT

Related party transactions – 8/14/01 Jeff Skilling, CEO, steps down for “personal reasons” (in recent analyst presentation suggested $132 per share for Enron.)  10/17/01  Enron Posts Surprise 3rd-Quarter Loss After Investment, Asset Write-Downs on “arrangements will be accounted for as equity transactions when settled.”   10/23/01  SEC announces Financial Inquiry.  10/25/01, Andy Fastow, CFO, with lead role in RTP partnerships steps down.  11/1/01  SEC raises Inquiry to Investigation of Fastow related partnerships. 11/8/01 Morgan and Citi evaluate $500m in additional financing.  11/9/01 Enron reduces previous four year profit by $586m, 20%.  Equity overstated by $172m in 2000 10-k and $828m in recent unauditted statements.  Notes receivable asset and equity both increased incorrectly (only increase equity for cash.)  Fires Ben Gilsan, managing director and treasurer, and Kristina Mordaunt, managing director and general counsel of an Enron division  11/13/01 Dynergy offers $10.12b for Enron, $7b in stock and remainder cash with Chevron to stabilize collateral backing energy trading – Enron Online.  11/28/01 Dynergy pulls out of deal and S&P reduces debt rating to junk.  12/3/01 Enron declares bankruptcy, and sues Dynergy for breaking deal.  12/4/01, Dynergy countersues for control of collateral pipeline assets.  Enron gets $1.5b in Morgao/Cit loans, lays off 4,000 with $4,500 severence while paying 500 $55m to stay put.  12/12/01 JP Morgan sues for $2.1b in receivable collateral while advising on restructuring.

2/02

Allied Irish Bank

FX

Balitmore, MD-based AllFirst sub currency trader John Rusnak used “historic rate rollover” of yen forwards to hold off settlement and sold options to cover losses to only go further underwater.  Loss at $750m.

2/02

Ford

Palladium

Purchasing dept. (not Treasury) pays and commits to pay around $1,000 per ounce (peak was $1,094) for catalytic converter production and price falls from this all-time peak to $440.