Peter Young's notoriety as one of the most memorable rogue traders is not a result of the amount of money he stole, but the bizarre events that followed his arrest and continued throughout his trial. Young was a fund manager for Morgan Grenfell Asset Management, trading for three large European funds seeking international exposure.

Young had made good profits on speculative investments in unlisted stocks in previous years and he continued to ramp up risk in order to maintain his run. To get around fund regulations that stated a fund could own only 10% of any company, Young created a mirror holding company through which to buy a major stake in a company he wanted. He proceeded to hold 10% of both the mirror holding company and the stock he originally targeted. Further, Young went on to use similar methods to circumvent the 10% limit on the amount of the fund that could be put into unlisted stocks. On top of illegal speculation, Young also used a system of warrants and dummy companies to filter the fund's money into his own personal account.

Morgan Grenfell became suspicious when one of Young's investments, Solv-Ex, came under SEC and FBI scrutiny for possible violations. Despite the news and the resulting massive sell-off of Solv-Ex, Young went through with plans to buy the company's shares at a premium. Morgan Grenfell suspended the equity funds that Young was running and began an inquiry. It found that Young was holding over three times the legal limit in unlisted shares and the bank hurried to cover the losses by closing out positions. One of the companies in the fund, Russ Oil, turned out to be wholly owned by Peter Young. He used it as a way to milk money from the fund to pay for his lavish house.

The bank was fined and took losses covering for its investors, but the story barely had begun. Young was charged for conspiracy to defraud investors. The trial became highly publicized when Young wore dresses to the hearings. On top of cross-dressing, and in answer to those who may have thought it all an act, it became known that Young had attempted and botched a do-it-yourself sex change. Although Peter Young was found guilty on all charges, the judge promptly voided the verdict due to reasons of insanity.

(For more on this topic, read Trading's 6 Biggest Losers.)

This question was answered by Andrew Beattie.

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