How to blow $120mm and have almost nobody know……

You have to love the way Credit Suisse Group lost around $120mm trading South Korean derivatives in the third quarter, and then phrased the news as “equity traders 'failed to protect (themselves) against swings in the value of Korean stock options'. It’s a cute trick if you can pull it off, particularly when the loss is said to represent around 13% of Credit Suisse's revenues.

Credit Suisse investment banking CEO Brady Dougan, himself a former derivatives trader, announced recently that Jim Kreitman, the unit's co-head of equities, would be leaving. Kreitman's departure has prompted a restructuring of the equities management team, and Bloomberg quotes Andreas Vendetti, an analyst at Zurich-based Zuercher Kantonalbank, who said that 'they've been underperforming in equities, and if they've made a loss, that could be one last problem that forced them to change management'.

With equity derivatives likely to be delivering good returns for canny investment banks in the next two years, Credit Suisse has been trying to beef up in this area. As Bloomberg points out, however, the firm's efforts have been hampered by several key departures. And, although Credit Suisse's revenues from equity trading rose 63% in the first half, Merrill Lynch posted a 77% gain, and Goldman's figures were up 81% in the same period.

http://news.hereisthecity.com/news/business_news/6098.cntns