For Reeling SocGen, the Taxman Cometh

Rogue trader won big in '07, and the bank could owe a bundle
By Jim O'Neill,  Newser User
Posted Feb 7, 2008 10:07 AM CST
In this photo of an electoral leaflet for the 2001 municipal elections in Pont l'Abbe, western France, French trader Jerome Kerviel is seen, listed as a candidate for the town's council. Kerviel, who...   (Associated Press)
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(Newser) – As if the $7.17 billion Societe Generale lost at the hands of rogue trader Jerome Kerviel wasn’t enough pain for the French banking giant, it’s now looking at losing another chunk of change—this time to the taxman, reports the Wall Street Journal. Investigators say Kerviel earned $2.1 billion for the bank in 2007, before his deals headed south.

Societe Generale has acknowledged Kerviel at one point showed a virtual $2.1 billion gain, but the fact the bank didn’t know it actually had $2.1 billion will raise more concerns over poor internal controls. Kerviel has claimed his bosses knew the trading was going on, allowing him to continue as long as he was making profitable deals.