His former superiors since said they didn't examine his trades closely. Jett denied any wrongdoing. Poor controls are a danger to investors in firms that fall victim to them. Sumitomo stock has fallen 17 percent since disclosing its trading losses. Regulators often say they don't believe rogue traders acted alone.
Executives are responsible for policing their traders and for knowing how they make their money.
Calif. Moorlach has experience cleaning up messes. Orange County supervisors ignored warnings by the county auditor about the investments, which reaped the county above-average returns for years while interest rates were falling. The officials, who were required by law to help oversee the county's finances, said they didn't understand Citron's investment strategy or the risks involved. When things are going well, officials have little incentive to crack down on a trader who is stretching the limits. Executives at London-based merchant bank Barings overlooked trading in Singapore by Leeson in early 1995 for their own personal gain, regulators said.