SocGen Posts Record $4.9B Q4 Loss

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

(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»

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

(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. More»

Bank gives vote of confidence despite $7.2B losses in fraud

(NEWSER) - Defying pressure from the French government, Société Générale's board of directors today unanimously voted to keep co-chief executives Daniel Bouton and Philippe Citerne in their jobs. About 100 employees endorsed the sentiment by leaving the embattled bank's headquarters and standing on the sidewalk in a show of support for Bouton, reports the Wall Street Journal. More»

'Complicity' by others can't be ruled out

(NEWSER) - Maverick trader Jérôme Kerviel gambled with $73 billion, twice the market value of Société Générale, by stealing computer access codes and setting up fake email accounts, the French bank revealed as new details emerged in one of the biggest scandals in history. One executive also conceded that the "complicty" of others could not be ruled out. Kerviel cost the company $7.14 billion as his "virtual losing position became huge," said the head of the bank, who called the scandal a "Greek tragedy." More»

Despite record growth, Wall Street has plenty of cause for concern, Business Week says

(NEWSER) - Wall Street is giddy with low unemployment, optimistic earnings predictions, and a resilient economy, but BusinessWeek lists five things for investors to worry about.

1. Volatility in earnings, especially tech companies
2. Consumer spending, as gas prices take their toll
3. Inflation, which could prompt the fed to raise interest rates
4. Subprime aftereffects, as the panic spreads to other forms of debt
5. Too much optimism, as it starts to look like irrational exhuberance