Orange County Investment Disaster

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Orange County's financial disaster was the result of unauthorised trading activity by a man called Bob Citron. Clearly, being unhappy named after an Orange he ran the county's funds on an extremely leveraged basis to achieve higher returns. Indeed he had a very good track record and consistently produced, over his peers, on average 2% more returns for his investors, namely schools, special districts and the county itself. In December 1994, Orange County revealed that its investment pool had suffered a loss of $1.6 billion. This was due to increasing interest rates courtesy of the Federal Reserve and resulted in the County going bankrupt.

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