mistake.club2nd Opinion
Back to the archive

The encyclopedia · Finance & Accounting · Financial decision · 2022

Cimolai SpA — Italian steel giant felled by unauthorized FX derivatives

Cimolai built stadiums and bridges for 70 years — until unauthorized FX derivatives trades cratered the company.

Cimolai SpA · Luigi Cimolai Holding SpA · Macquarie Group · Ebury Partners · 2022-10

What happened

Cimolai SpA was an Italian steel construction company founded in 1949, based in San Giorgio di Nogaro, Friuli. Over seven decades it built complex steel structures worldwide: the Al Bayt Stadium in Qatar, the retractable roof of Millennium Stadium in Cardiff, Allegiant Stadium in Las Vegas, the Hans Wilsdorf Bridge in Switzerland, and the UAE Pavilion at Expo 2021 Dubai. It was one of Europe's most respected steel fabricators.

In 2022, unauthorized foreign exchange derivatives contracts were discovered. An employee had entered into speculative FX trades without authorization, exposing the company to massive losses. Macquarie Group disclosed a $71 million loss on currency derivatives with Cimolai after the company failed to make termination payments. A separate $49 million lawsuit was filed for failing to pay on other FX contracts, and the company settled a €10.6 million claim from Ebury Partners over forex contracts signed in 2022.

Cimolai's total liabilities reached over €500 million. In October 2022, insolvency proceedings commenced in Italy. The company aimed to devalue its liabilities to compensate creditors through a restructuring plan. In 2023, Cimolai filed for Chapter 15 bankruptcy protection in the United States to shield its American assets while the Italian proceedings played out. English courts also recognized the Italian proceedings under the Cross-Border Insolvency Regulations.

A company that had built major infrastructure for over 70 years across four continents was brought down not by a bad contract or a failed project, but by a single employee's unauthorized financial trades that no one caught in time.

Why it happened

  • A single employee entered into unauthorized FX derivatives large enough to bring down a multinational company — a complete failure of financial controls and risk oversight at the treasury level.
  • The derivatives losses hit at a time when Cimolai was already carrying significant debt, pushing the company from financial distress into full insolvency.
  • Cimolai lacked independent risk monitoring. A steel fabricator was effectively running a speculative FX book, and no one was watching.
What it cost€500M+ liabilities; insolvency in Italy, Ch15 in the UScatastrophic

The lesson

A company that builds bridges for a living should not run a speculative FX desk. If you don't know what your treasury is doing, you don't know what your company is worth — until it's zero.

Sources

spotted an error? The club wants to know.

Comments · 0

    Sign in to join the comments.

    More like this

    1979–2023 · Strategy & Leadership

    Condotte d'Acqua was Italy's oldest builder — then €2B debt and corruption sank it

    €2B debt; extraordinary administration
    1967–2018 · Engineering & Operations

    The Genoa bridge collapse was 30 years of ignored warnings — 43 people paid the price

    43 lives; bridge demolished and rebuilt at €200M
    1937–1978 · Product & Design

    OISA was Italy's only watch movement manufacture — the quartz crisis ended it

    Production ceased, 4M movements lost, brand dormant 37 years

    Somewhere, someone solved the problem this company failed at. 2nd Opinion →