Failed fund to face £120m in claims over rogue trader

SOME of the world’s biggest investment banks have lost millions to a suspected rogue trader at a failed investment firm, documents reveal.

Investigators are probing Invexstar Capital Management, which was based in the City and whose collapse last year cost five giant lenders £120m.

The business went bust after building up a £2bn trading position in bonds – despite having less than £1m of capital.

Its collapse hit customers including international lenders BNP Paribas, Nomura, Morgan Stanley, ING and Mizuho International.

BNP is thought to have lost £50m alone, and Nomura almost £30m. In a tribunal earlier this year, it was revealed Nomura had a £526m position with Invexstar.

This led to the biggest individual trading loss in the Japanese bank’s history. It later emerged that the trader – Italian Alberto Statti – who is also Invexstar’s cofounder and sole employee, had run it without being given regulatory permission to trade.

Invexstar’s administrator SFP said it had uncovered evidence which might allow creditors to recover some cash. It has brought in a forensic accountant to do detailed investigative work, and instructed lawyers to look at possible claims.

Administrators revealed they could not provide any more information as it could make efforts to recover the money more difficult.

Any criminal investigation would likely be managed by City of London Police, which declined to comment yesterday.

Invexstar’s collapse was hugely embarrassing for the City institutions which lost money, and raised questions about their attitude to risk.

Statti, 49 – described by colleagues as ‘a very colourful and funny guy’ – had been responsible for two other failed firms before setting it up.

Nomura sacked its trader Giovanni Lombardo for his dealings with Statti after the losses became clear although there is no question of any criminal behaviour on Lombardo’s side.

A tribunal later heard how Lombardo had pleaded with Statti to explain what was going on, saying: ‘Give me a call with a yes or no because here they crucify me.’