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- Title
Whale Watching on the Trading Floor: Unravelling Collusive Rogue Trading in Banks.
- Authors
Rafeld, Hagen; Fritz-Morgenthal, Sebastian G.; Posch, Peter N.
- Abstract
Recent history reveals a series of rogue traders, jeopardizing their employers' assets and reputation. There have been instances of unauthorized acting in concert between traders, their supervisors and/or firms' decision makers and executives, resulting in collusive rogue trading. We explore organizational misbehaviour theory and explain three major collusive rogue trading events at National Australia Bank, JPMorgan with its London Whale and the interest reference rate manipulation/LIBOR scandal through a descriptive model of organizational/structural, individual and group forces. Our model draws conclusions on how banks can set up behavioural risk management and internal control frameworks to mitigate potential collusive rogue trading.
- Subjects
FLOOR traders (Finance); COLLUSION; RISK; CORPORATE culture; ORGANIZATIONAL behavior; NATIONAL Australia Bank Ltd.; J.P. Morgan Chase &; Co.; LIBOR
- Publication
Journal of Business Ethics, 2020, Vol 165, Issue 4, p633
- ISSN
0167-4544
- Publication type
Article
- DOI
10.1007/s10551-018-4096-7