Rogues of Wall Street. Waxman Andrew

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of operations and trading in a satellite trading unit in Hong Kong to take on huge, unhedged positions that resulted ultimately in a spectacular loss for the bank.

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Liars Poker by Michael Lewis chronicled his adventures as a securities salesman at Salomon Brothers in the early 1980s. The title of the book comes from the poker game that was played on the trading floor. Trading heads were in many cases the instigators of the games, a sine qua non for success in trading.

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James Cayne, known widely as Jimmy, was the CEO of Bear Stearns in the years leading up to the 2008 Financial Crisis. He gained some notoriety in the press for his publicized participation in bridge tournaments during some tough times for his company.

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Delta One is the name for the trading desk on investment banking trading floors for some of the more straightforward equity trading activities. Delta One is so known because of the one‐to‐one relationship between the trades and swaps being executed on behalf of clients.

23

VaR (value at risk) is the term given to risk‐management modeling methodologies developed in investment banks. The models developed under this methodology are intended to indicate the amount of value that would be lost in a day under given trading scenarios. The scenarios are normally developed on the basis of historical precedent.

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Dodd‐Frank Act is the name for legislation passed following the 2008 Financial Crisis. Christopher Dodd and Barney Frank were the congressmen responsible for the legislation. One of the most expensive pieces of financial legislation ever passed, its intention was to prevent a recurrence of the type of financial failures that were perceived to be the underlying causes of the 2008 Financial Crisis and the deep recession that followed.

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Clawback is the term used in investment banking to refer to the provision to take back bonuses previously paid out to traders if certain conditions are met. The most frequent of these conditions are if any part of the bonus was paid on the basis of trades that were incorrectly or inappropriately executed.

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In the Societe Generale incident in 2009, Kerviel worked through his vacations because he did not want anyone to look into his trading book, something that could have happened if he had gone on vacation. Following the incident, investment banks instituted mandatory vacations to prevent such a recurrence.