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French rogue trader costs bank 7bn dollars January 26, 2008

Posted by Daniel Martin in General.
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France’s second largest bank, Societe Generale, has filed a legal complaint against the trader accused of defrauding the bank which led to a loss of 4.9bn euros ($7.1bn). The bank says the trader acted alone.  Societe Generale wouldn’t confirm it, but several sources say the trader at the centre of the scandal is Jerome Kerviel, a 31-year-old who worked on the bank’s futures desk. He’s been suspended.

Societe Generale described his motives as “totally irrational” and admitted it didn’t know where the man was. A number of managers are also being dismissed and the bank was forced into an emergency share issue to offset the losses.

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One of the executives who interviewed the trader said it would have been impossible for him to have acted with accomplices. But analysts are mystified as to how losses the bank itself described as “colossal” could have gone undetected: one said the market was suspicious that there was something more sinister at play.

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1. mburgos - January 27, 2008

For me this is an interesting case because, as you know, I had worked for a company like this one….. and I think noboby is telling the truth. Actually the public opinion only have the “official version”, but we haven’t heard the trader’s version, anyway I think he won’t tell the truth either.
Personally from my own experience I can say that it would be impossible to cheat this amount out of a big company because of the computer system. When you are going to do an important transfer you have to pass a lot of controls and of course many people above yoy have to say “ok”, so I’m sure that what the trader is thinking now is: “I wish I had the money”, but unfortunately for him the money will be I don’t know where……
I’m going to follow this story because I’m very interested in knowing the truth…. and I think that the truth will finally come out…


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