1.Case Study on Sumitomo Corporation on Derivative Losses and Lesson Learned 1.1Introduction
Sumitomo Corporation was top in market in copper business in the world prior to 1996 in term of trading size and it operations. Copper business is part of their portfolio and it was delegated to Yasuo Hamanaka who was the Head of Copper Trading and he was engaged in illegal copper trading and faced extensive losses and massive cover-up. As the result of this loses, he attempted to avoid losses many times. This was against the rules and regulation of the London Metal Exchange (LME). LME created new regulation to prevent the market domination, as the result of this; he faced losses on his operations. There were two malfunctions recorded; he maintained two types of books, one is to showing big profit, and the second one is to keep secrete account, unauthorized trades over 10 years. No one except Hamanaka was not aware of accumulated loss of $ 1800 million.
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