There was and still is systems in place to track losses but that stops at senior management or the CFO. Senior management turns bad and alot of things go unnoticed, I have seen this with my own eyes. There are always prevention methods available for lower level employees but a few steps up the latter you can do what every you want. Look at Cap Commerce, a mortgage lender who went belly up because one senior manager didn't hedge positions again bonds (I believe it cost about 3,000 jobs) I would venture to say that I believe 80% of CFOs involve themselves in questionable and illegal matters.
What is it about the currency markets that makes it so easy to hide losses? Basically, its the forward rates and the valuation of longer options... implied volatility, being implied, is hard to pin down. For long-dated options, a little tweak one way or the other in either vol or interest forwards on how you mark-to-market makes all the difference between a good year and a bad year. Losses can be hidden until they are traded out of or .... Amazing that this still goes on. But not that hard when the trader is the one who is responsible for the mark-to-market. This was going on over a decade ago... guess it is still!
Hot traders taking high risk in a bull market hit a bear market and wipe out. Thier bosses also don't understand trading so they love the hot traders in teh bull market and don't put the breaks on them in the bear market. Incompetent traders and incompetent bosses all go out the door. Worse in this case, they also lied to cover and falsified company documents.
Not all companies are like this: in fact, truly well run companies have risk and compliance systems that automatically send reports to the board when risk parameters on any corporate transaction exceed threshold values. Now if the board ignores or substantiates these actions and it goes south, everyone is held accountable. This type of system is in place at only a small number of financial companies that have what I call legitimate boards: that is the board members are actually active in their roles rather than simply rubber stamping whatever the ceo /chaiperson sends over for signature/approval. Most boards are simply stacked with prominent names that never actually participate in any meaningful way in the affairs of the company: of course they can only get away with this since investors let this occur.