Credit Suisse Cuts Profits $1B on Trader Errors

Trader 'error' prompts bank to take $2.85B writedown; shares plummet

By Jim O'Neill, Newser User

Posted Feb 19, 2008 6:58 AM CST

(Newser) – Credit Suisse share prices plummeted 10% today after the bank announced that some traders had overvalued asset-backed securities, prompting the bank to take a $2.85 billion writedown and drop first-quarter profit projections by $1 billion, Bloomberg reports. Switzerland’s second-largest bank suspended the traders and said it would review 2007 earnings. Markets, already skeptical about the health of the financial industry, reacted negatively.

Yesterday a Qatar sovereign wealth fund announced it had bought a stake in Credit Suisse, which earlier announced $1.8 billion in subprime writedowns for 2007. The news comes on the heels of the scandal at Societe Generale, where rogue trader Jerome Kerviel’s actions led to the worst losses in banking history, fueling concerns about trading oversight.

A client enters a Credit Suisse bank branch on February 12, 2008 in Zurich. (Getty Images)

Brady Dougan, CEO of Swiss bank Credit Suisse, speaks during a press conference in Zurich, Switzerland, Thursday, Aug 2, 2007. Credit Suisse today said it would cut first quarter profits by $1 billion... (Associated Press)

Logo of the Credit Suisse banks is seen on February 12, in Zurich. (Getty Images)

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SocGen CEO Resigns Over Rogue Trader

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(NEWSER) - The CEO of Société Générale will step down, at last bowing to pressure in the wake of the $7.8 billion rogue trading scandal. Although investors and politicians—including French President Nicolas Sarkozy—had demanded Daniel Bouton's resignation immediately after the revelation of Jérôme Kerviel's massive fraud, the bank had insisted he stay on to keep SocGen from collapse, reports the Financial Times. More»

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(NEWSER) - Societe Generale's annual profits plummeted a whopping 82% after a record $4.9 billion fourth quarter loss fueled by subprime woes and the actions of rogue trader Jerome Kerviel, reports Bloomberg. France’s second-largest bank today said net income was 947 million euros, compared to 5.22 billion euros in 2006. SocGen warned further losses could come in the first quarter. More»

SocGen: Lax Controls Led to $7.2B Fraud

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(NEWSER) - Rogue SocGen trader Jerome Kerviel, whose unauthorized deals led to a $7.2 billion loss for the French bank, continued his trading for more than a year after the first warning flag was raised in the department that was supposed to detect risky trading, reports the Wall Street Journal. Kerviel wrote at least seven bogus emails flagged for anomalies, and his trades tripped 24 alarms over a 14-month period beginning in July 2006, the bank admits in a report released yesterday. More»

Lawyer: SocGen 'Condoned' Trader's Deals

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Trader's Alleged Accomplice Released

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(NEWSER) - Authorities today released a second suspect in the bank fraud case that cost Société Générale a dizzying $7.09 billion, the Wall Street Journal reports. But the suspect’s ex-colleague, Jerome Kerviel, remains jailed, as the bank and French officials insist he acted alone. Still, prosecutors labeled the second man an assisted witness, which makes him a witness without being charged, AFP explains. More»

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Credit Suisse Cuts Profits $1B on Trader Errors

Trader 'error' prompts bank to take $2.85B writedown; shares plummet

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Credit Suisse • Qatar • corporate earnings • banking • bank fraud • financial institutions • sovereign wealth funds • Jérôme Kerviel • Société Générale • subprime crisis • bank scandal

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SocGen CEO Resigns Over Rogue Trader

Bouton steps down at last; future remains grim for French bank

SocGen Posts Record $4.9B Q4 Loss

Subprime writedowns and fraud drop bank's annual profit 82%

SocGen: Lax Controls Led to $7.2B Fraud

French bank says 24 internal alarms were ignored over 14 months

Lawyer: SocGen 'Condoned' Trader's Deals

Bank couldn't have missed billions in moves: Kerviel's rep

Trader's Alleged Accomplice Released

Second SocGen worker not charged as bank struggles to stay alive

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Credit Suisse Cuts Profits $1B on Trader Errors

Trader 'error' prompts bank to take $2.85B writedown; shares plummet

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OTHER STORIES ON OUR RADAR

Credit Suisse • Qatar • corporate earnings • banking • bank fraud • financial institutions • sovereign wealth funds • Jérôme Kerviel • Société Générale • subprime crisis • bank scandal

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

SocGen CEO Resigns Over Rogue Trader

Bouton steps down at last; future remains grim for French bank

SocGen Posts Record $4.9B Q4 Loss

Subprime writedowns and fraud drop bank's annual profit 82%

SocGen: Lax Controls Led to $7.2B Fraud

French bank says 24 internal alarms were ignored over 14 months

Lawyer: SocGen 'Condoned' Trader's Deals

Bank couldn't have missed billions in moves: Kerviel's rep

Trader's Alleged Accomplice Released

Second SocGen worker not charged as bank struggles to stay alive

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Newser By Users

Community

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