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Some of you may remember Brent Dooley from a few years ago. A rogue wheat trader with now-defunct MF Global, on one fateful night in February 2008 he amassed huge losses in the wheat futures markets during a time of particularly high volatility. By the next morning, when the dust settled, $141 million was gone.
I'm a grains trader and a criminal attorney, so both the trading and the legal aspects of this case fascinate me. Additionally this happened right in my back yard of Memphis, TN. Dooley was a trader at MF's Memphis office; the scene of the crime, as it were, was at Dooley's home in Olive Branch, MS, a bedroom community just across the state line. Two years after the trades he was indicted in federal court in Chicago, and subsequently pled guilty to violating the Commodities Exchange Act. He was sentenced to five years in prison and ordered to pay the whole $141 million in restitution.
The most troubling footnote to this story is the subsequent implosion of MF in 2011. We all know about that. Dooley gets five years and is ordered to repay an impossible amount of money. He's now a convicted felon and before this was already pretty much broken financially. Think about his future earnings potential--I doubt he'll ever be able to make more than $30,000 a year or so. He is ruined. (The U.S. attorney on the case said the restitution was ordered to "make the victim whole.") Meanwhile MF's CEO Jon Corzine, former politico and Goldman fair-haired boy, walks free.
Dooley certainly should not have been allowed anywhere near a trading screen. The guy had an established track record of financial instability. He was a gambling junkie and drank heavily at the time. But in my opinion this was an unfair prosecution, made even more troubling by not one person from MF being indicted after its meltdown.
Yeah I remember this story. I always wondered how on earth their risk parameters didn't flash red lights? I don't know the details if he traded them on screen or down to the pit? If he was trading on screen, I would imagine he would have had a long/short max limit and how with a $-3,000 account he was able to initiate trades? It would be impossible unless the risk profile was not set or overridden.
Dooley should start a website and never mention his real name. He could do much better than $30k per year. And still work from home (does he still HAVE a home?)...