At some point this Summer, one lucky American hedge fund found itself the recipient of a $6 billion gift from Deutsche Bank. Unfortunately, the money wasn't yet another example of profligate German generosity, but merely a massive f*ckup on the part of Deutsche's trading desk.
Deutsche Bank paid $6bn to a hedge fund client by mistake in a “fat finger” trade on its foreign exchange desk this summer that raises fresh questions about its operational controls and risk management.
Ultimately it appears that Deutsche got its money back the very next day, so no harm no foul, right? And we're sure there was a totally acceptable, professional explanation for what went down.
The $6bn trade was processed by a junior member of the bank’s forex sales team in June while his boss was on holiday, according to two people familiar with the matter. Instead of processing a net value, the person processed a gross figure. That meant the trade had “too many zeroes”, said one of the people.
Counting is hard, and no one checks their math in the Summer.