How Did Rogue Trader Peter Young Become Infamous?

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How Did Rogue Trader Peter Young Become Infamous?

Peter Young’s renown as one of the most memorable rogue traders stems from the unusual events that occurred after his arrest and persisted throughout his trial, rather than the amount of money he stole. Young worked for Morgan Grenfell Asset Management in 1996, trading for three big European funds seeking foreign exposure.

Young had previously earned significant returns on speculative purchases in unlisted companies, and he proceeded to increase the risk in order to sustain his run. To circumvent fund laws that said a fund may possess no more than 10% of any firm, Young established a mirror holding company through which he could purchase a majority position in any company he desired. He went on to own 10% of both the mirror holding company and the stock he was after. Young then used similar strategies to get around the 10% restriction on the amount of the fund that may be invested in unlisted companies. In addition to unlawful speculating, Young employed a system of warrants and sham corporations to funnel funds from the fund into his account.

The Plot Unravels

Morgan Grenfell got concerned when one of Young’s investments, Solv-Ex, was investigated by the SEC and the FBI for probable violations. Despite the revelation and the subsequent enormous sell-off of Solv-Ex shares, Young proceeded with plans to purchase the company’s stock at a premium. Morgan Grenfell stopped Young’s equity funds and launched an investigation. Young was discovered to be holding more than three times the legal limit in unlisted shares, and the bank rushed to close its holdings to cover the losses. One of the fund’s firms, Russ Oil, was discovered to be entirely controlled by Peter Young. He utilized it to siphon money from the fund in order to pay for his extravagant home.

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The bank was punished and suffered losses to compensate its investors, but the narrative had just just started. Young was arrested and accused with conspiracy to deceive investors. When Young wore gowns to the sessions, the trial became very public. In addition to cross-dressing, and in response to those who may have assumed it was all an act, it was revealed that Young had tried and failed a do-it-yourself sex change. Although Peter Young was convicted guilty on all counts, the judgement was quickly overturned owing to insanity.

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