Rogue oil trader hits Mitsubishi unit for $320 million

NEW YORK (AP) — One of Japan's most storied trading houses says it's lost $320 million in a series of unauthorized transactions by a rogue trader.

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Mitsubishi Corp. said Friday that the employee in its Petro-Diamond unit in Singapore disguised the trades to look like legitimate hedges. Derivatives are contracts that give a fixed price to hedge against volatility in the market.

It says declining crude prices led to the enormous losses.

The company fired the employee, which it did not name, on September 18 and lodged a criminal complaint.

Mitsubishi, considered a staid trading house typically not involved in high-risk transactions, says it has taken measures to tighten oversight.

The company is trying to determine if the Singapore incident will alter its financial forecast for the year.

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