Trader Who Racked Up $115 Million Losses Had People Trading on His Behalf
(Bloomberg) -- The Norwegian power trader who last year racked up losses of more than $115 million on Nasdaq Inc.’s power market had other people trading for him even though his membership of the exchange was solely personal.
Einar Aas had deputies that entered into trades through his membership as part of managing his portfolio, the Financial Supervisory Authority of Norway said in a report made public on Thursday. The regulator was critical of what appears to be a lack of supervision of how Aas handled his activities.
“The company’s investigations and follow-up of these circumstances have been inadequate in light of their bearing on reporting requirements, market surveillance and compliance with regulations as well as the company’s follow up,” the authority said, adding that Nasdaq had failed to disclose this information on its own initiative.
Aas was expelled from the exchange in September last year after he couldn’t make good on his losses and has indicated he has no plans to return to the market. He struck a deal with creditors in November that enabled him to avoid bankruptcy.
Einar Aas didn’t immediately respond to voicemail seeking comment.
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“Nasdaq has received the report from the Norwegian FSA and we are currently reviewing it in detail to address any concerns,” the company said in an emailed response to questions. “We continue to communicate and work with regulators, our members and other stakeholders in order to further enhance our Exchange and Commodities business.”
Other highlights from the Financial Supervisory Authority report:
- Says audit of Nasdaq Oslo ASA was carried out after the default of Einar Aas on margin requirements related to the clearing of derivative contracts with Nasdaq Clearing AB.
- Says “company’s allocation of resources between the Company and the Norwegian branch of Nasdaq Clearing has not been properly thought through and formalized.”
- Says “company must ensure that exchange members are at all times fit to engage in trading and meet the membership terms and conditions.”
- Says company must report back by March 1 on corrective measures
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