Sumitomo's 'Mr. Copper' hid $2.6B in losses for a decade

Yasuo Hamanaka, Sumitomo Corporation's chief copper trader, was known as 'Mr. Copper' for his apparent ability to predict the market. For over a decade, he controlled an estimated 5% of the world's copper trade, and his positions were so large that he could influence global copper prices.

But Hamanaka had been hiding losses since the late 1980s. He used unauthorized trades, forged documents and off-book accounts to conceal approximately $2.6 billion in losses. His strategy was to keep copper prices high enough to avoid realizing the losses, effectively cornering the market to sustain the illusion.

When the scheme was exposed in June 1996, copper prices crashed. Sumitomo announced the $2.6 billion loss, and Hamanaka was sentenced to eight years in prison. The case illustrated how a single trader with unchecked authority can accumulate losses for a decade when the organization's controls are designed around trust rather than verification.