The Sumitomo Copper Fraud: Were there signs?

Before the event itself, financial frauds in the making often send out clear signals to those willing to see them. In “Silver Threads among the Gold ” (1976) Henry Jarecki set out in advance of the event how the Hunt brothers cornered the silver market. In the Nick Leeson case, the directors of Barings Bank were made aware in January 1995 of the riskiness of its trading position by the Singapore Financial Futures Exchange. (Jaffa, 1998) This paper investigates the Sumitomo case and examines the signs that could have been recognized prior to the losses being officially revealed