In a trousers-down farce, timing is everything

Take a bow Yasuo Hamanaka, alias "Mr Five Per Cent", "The Hammer" or just plain "The Man" and winner of this year's Rogue Trader award (no more entries, please).

Victor to the tune of pounds 1.2bn so far, or 60 billion humble tuppenny pieces, sufficient to stretch 946,970 miles laid end-to-end and more than enough copper to cover the metropolis of Tokyo, where The Man has gone to ground. More than enough short change, too, for Japanese trading giant Sumitomo to worry about as it becomes the latest blue chip name to drop its trousers on the world stage.

The timing was almost but not quite perfect. Last week started with Peter Norris memorably describing events at Barings, where he was chief executive, as "A Mad Hatter's Tea Party".

It almost finished at dawn our time with Singapore closing the book on Nick Leeson's adventures, deciding not to prosecute anyone further. But seven hours earlier, late on Thursday night, like an over-eager novice, Sumitomo tripped on to the stage just before the last performance was over.

"No Sense Please, We're Barings" gives way to "The Severed Samurai," a play in four parts. Act One: the investigation, on tip-offs through the market. Act Two: Sumitomo comes cleanish and Mr Five Per Cent falls on his sword. Acts Three and Four, still inevitably to come: the audience bays for blood and yet more actors grudgingly disembowel themselves.

Much of the script has yet to be revealed: what false trades The Man booked Leeson-style to hide growing losses; what dangerous derivatives were written - options, swaps, swaptions and the like; how much of the10 million-tonnes-a-year copper trade was cornered; who else in Sumitomo, and within the UK and US metal broking community through which he dealt, might have been in the know.

Yet Act One has gone surprisingly well; a total rewrite, in fact, of the Barings farce when market intelligence and regulatory action were contradictions in terms. Mr Hamanaka might well curse old Nick for hastening his hara-kiri in Act Two.

The Securities and Futures Authority had long been investigating the copper market but lacked the powers to investigate non-member firms such as Sumitomo. Its mentor, the Securities and Investments Board, however, used more sweeping provisions of the Financial Services Act in what appears a rare case of regulators acting with harmonious resolution.

Last year's Windsor accords, agreed after Barings to formalise global co-operation, also seem to have had a happy baptism of fire. The main US regulator, the Commodity Futures Trading Commission, which oversees New York's Comex commodities market, was brought into the frame early on.

The one institution that comes out badly, apart from Sumitomo and any of its culpable friends, is the LME itself. On Friday, the management went completely to ground, leaving a secretary to fax brief statements around the City.

Rather a contrast to Thursday, when chairman Raj Bagri openly called for tougher powers to control all users of the market, not just its 16 member traders, and embarrassingly put recent wild price swings down to irresponsibility not manipulation.

Absolutely right and, it now appears, absolutely wrong in the same breath. And pure coincidence, I'm sure, that calls for more regulation came just hours before Sumitomo's statement.

Anyone who has visited the LME can hardly be blamed for thinking it to be something straight out of the Dark Ages. With its four frantic open outcry sessions each afternoon, lasting just five minutes, where traders bawl orders in "the ring", it seems an anachronism. Yet strangely, it remains the world's key pricing mechanism for a fundamental range of metals.

Messrs Leeson and Hamanaka have fired warning shots at worrying speed across banking bows. Derivatives, from copper to currency, are different sides of the same spinning coin. The system was able to absorb Barings' collapse as, though Britain's oldest bank, it was hardly a key player. Like an overweight wrestler, Sumo-tomo will be able to roll with its pounds 1.2bn loss. Many of the big traders in the LME are, however, owned by actors more central to confidence in Europe's banking system.

All the more reason, then, to tighten oversight and regulation of trading, as Mr Bagri called for. But all the more reason to give supervision more statutory steel.

All the more reason in the LME's City club to end a system of "gentlemen doing it in their spare time between deals", as one fraud investigator described self-regulation last week.

Lloyd's again

More regulation and scandal: this week Lloyd's sends names updated estimates of final bills for its Equitas rescue. Last week it announced a blacklist of 172 professionals, whose share of compensation will be cut for contributing to the market's pounds 8bn losses.

Nobody yet knows whether Equitas will fly. Polls by the warring factions are inevitably biased one way or the other, and come August it will be up to individuals to decide.

One can understand Lloyd's reluctance to publish the names on its blacklist - out of fears of legal action. Yet there is a strong feeling that such insiders should receive no slice of the settlement cake at all.

Lloyd's has other hurdles to leap, not least in the US. It also now faces a vote after its annual general meeting on 15 July, urging it to find more money to add to the pounds 3.1bn settlement pot. The management has urged opposition to the resolution, which must also grate.

One further gesture might help its cause: come clean over progress with Lloyd's own disciplinary investigation into former deputy chairman Stephen Merrett. It was announced last November after the High Court found Mr Merrett guilty of negligence and deliberate concealment of information, but has since been buried from sight. Some news might convince waverers that Lloyd's might be on their side.

It's Tel out there

This section is a Euro 96-free zone no more. Last week Manchester United boss Martin Edwards cashed in to the tune of pounds 10m from the club's soaring share price. Another thought: if poor old Terry Venables had stuck by Alan Sugar, his 23 per cent stake in Spurs would be worth pounds 23m by now, not the pounds 3m he sold it for in 1993. Clashing with someone meaner and richer has cost Tel a packet as well as the England job.