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Post by andi on Jan 25, 2008 7:22:05 GMT -5
Clean cut junior Jerome Kerviel lost France's Societe Generale bank a huge £3.7 billion by betting on the direction of share prices. It is believed that he has helped to inflame Mondays stock market crash. The fraud was discovered at the same time the markets crashed. Paris based SocGen first discovered the fraud at the weekend and it is believed to be the biggest in banking history and far outweighs the £860 million lost by Nick Leeson of Barings bank in 1995. Kerviel from Lyon has confessed and will be sacked along with four of his bosses. The banks main boss Daniel Bouton says " His motives are totally irrational, It doesn't seem he was able to benefit from these colossal trades". It was easy for him to cover his tracks as he had worked in the office that dealt with keeping records of deals previously. A stunned source from the bank described Kerviel as a polite, hardworking career banker but he wasn't a high-flyer and never broke into the big money leagues. Kerviel is believed to be holed up in a Paris flat, ready to talk say his lawyers. Mr Boutons offer to resign was rejected, insists that the banks future was not affected. SocGen, France's second biggest bank, will ask share holders for almost £4 billion to plug thr financial black hole and is still expected to make a profit this year.
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Post by Jody on Jan 25, 2008 9:16:22 GMT -5
When I saw just the title, I read it as the Red trader!
Rogue in English is a dishonest person.
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Post by andi on Jan 25, 2008 9:45:18 GMT -5
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Post by Becky (Berkeleytravelers) on Jan 25, 2008 11:35:25 GMT -5
Gitte, the US market has gone down 1,000 or so (roughly 10%) in about a week (plus or minus), which may not be a crash but it sure is a nasty bump! The biggest problem isn't the direct effect (although that's not good) but the ripple effect on lots of other markets (housing, manufacturing etc.).
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Post by phread on Jan 25, 2008 13:20:58 GMT -5
If I understood correctly, they actually closed the Dow Jones early on Monday to stop a complete sell off. This is an extremely rare occurance and when it happens it is considered a crash.
I heard that the Pres of SG was going to forego his salary for 6 months for the negligence. Does that mean he makes 5 billion in six months!?! Rhetorical question, of course. The biggest problem is a complete lack of security at a major world bank.
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Post by greyghost1 on Jan 25, 2008 13:54:31 GMT -5
Actually Monday was a US holiday and the stock exchange was not open.
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Post by rssilverandlight on Jan 26, 2008 12:58:38 GMT -5
Here is the latest I have on the matter:
Rogue French Trader In Custody
Saturday, Jan. 26, 2008 By AP/PIERRE-ANTIONE SOUCHARD Article
(Paris) — A trader blamed by the French bank Societe General for a massive fraud was taken into custody on Saturday, judicial officials said.
Financial police in Paris were to question Jerome Kerviel as part of a probe into Societe Generale's announcement Thursday that the 31-year-old trader was behind a fraud costing the bank $7.14 billion, judicial officials said. They spoke on condition of anonymity because the investigation is ongoing.
Skeptics from Kerviel's neighbors to France's prime minister have questioned whether a single futures trader could have managed such large sums. Adding to the mystery, the bank said Kerviel may not have made any personal gain from his unauthorized trades.
The bank said it discovered the fraud last weekend and unwound the trader's losing bets starting Monday, when world markets tumbled. Some analysts have questioned whether Societe Generale exacerbated the fall and indirectly led to the U.S. Federal Reserve's subsequent decision to cut rates.
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Let the riot begin! LOL - 
hahahha