The Sad Case of Evan Brent Dooley

Everybody has a bad night now and then. But for Evan Brent Dooley, Feb. 26, 2008 was a doozie.

Dooley was 40 years old at the time and was a commodities trader working for the Memphis, Tenn. office of MF Global, Inc. In that one night of trading wheat futures from his home in Olive Branch, Miss., the Commodity Futures Trading Commission said, Dooley lost more than $141 million for his employer.

This month, the CFTC announced that Dooley had pleaded guilty to violating the Commodity Exchange Act for exceeding speculative trading limits through the Chicago Board of Trade. He will be sentenced on March 8 in Chicago.

Here on the doorstep of Christmas, this sad story resonates with questions. Why? How could such a thing happen? The official story presents us with a photograph of a guy who seemed to have done everything wrong. In 2008, Dooley had already been divorced and remarried, had filed bankruptcy, and had been through a number of jobs in the commodities business.

After the MF Global fiasco, a federal indictment returned against him said Dooley had been allowed to trade for clients and himself through the CME Globex electronic trading platform. He convinced MF Global, which is headquartered in Bermuda, to let him trade from his home in Olive Branch, in the Memphis suburbs.

During overnight trading that started that Feb. 26, Dooley executed a series of big buy and sell orders involving 31,964 wheat futures contracts, with each contract calling for delivery of 5,000 bushels of wheat. Dooley had a negative balance of $3,000 in his MF Global account when trading began, and he intended that the risk be borne “directly and solely by MF Global,” the CFTC said.

The next morning, wheat contract prices rose quickly, and Dooley tried to liquidate a short position he had established. By mid-morning, he was short by 17,181 contracts on May 2008 wheat futures. MF Global soon deactivated his account, but the firm was stuck and paid the clearing house, losing more
than $1.41 million.

After Dooley was fired by MF Global, Bloomberg News sent two reporters to cover the story.

They did a thorough job, talking to his former college friends, neighbors, and others.

They also delved into a 2002 personal bankruptcy Dooley had filed, and discovered he had suffered stiff trading losses before, and fell behind on alimony and child support from a previous marriage. He had also worked at six other commodities firms, Bloomberg said, and his divorce was rife with allegations of drinking, gambling, and other bad boy behavior.

He had remarried, worked as a truck driver and restaurant manager, and borrowed heavily from family and friends. But so far as I could tell, Dooley has never given a first-hand interview.

He leaves behind a lot of wreckage, and faces a maximum sentence of 10 years in prison, a $1 million fine, and possible restitution orders.

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James Welsh is a veteran journalist and financial writer who covers compliance and securities fraud issues.