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SocGen Fraud

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SocGen Fraud

Societe Generale's loss is the biggest ever by an individual trader

How did Société Générale, the French banking giant, lose close to $7 billion? The answer is Jerome Kerviel, a trader with intimate understanding of the firm's risk management and control policies. He lost the money while betting on the direction of European stock indexes, which he then tried to cover up with fake positions. Kerviel, who faces 7 years in prison and $1.5-million fine, says his bosses knew what he was up to and didn't stop him as long as he was generating huge profits.

Stories

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January 2008
- Breakup Rumors Swirl Around SocGen
  
  Reuters | Jan 29, 08 12:11 PM CST
  
  (Newser) - Wounded Société Générale is looking more and more like a takeover target, prompting France's prime minister to jump into the fray today and say the government would defend the country's second-largest bank against hostile raids, the Wall Street Journal reports. With a $7.1 billion loss from fraudulent trades shaking confidence in the bank and its stock price plummeting, some analysts are predicting a breakup, Reuters reports. More »
- Bank Was Warned About Rogue Trader
  
  Times (UK) | Jan 29, 08 3:19 AM CST
  
  (Newser) - The Eurex stock exchange alerted Société Générale to positions held by Jérôme Kerviel months before the bank discovered his staggering $7 billion fraud, the Independent reports. Kerviel produced fake documents to justify his actions to the bank and was motivated by a drive to impress his bosses with lucrative trades and earn a large bonus, according to the lead prosecutor in the case. More »
- SocGen Trader Charged, Faces 7 Years
  
  Bloomberg | Jan 28, 08 9:08 AM CST
  
  (Newser) - Jérôme Kerviel, the rogue trader who cost France's third-largest bank over $7 billion, was charged with attempted fraud by French authorities today, Bloomberg reports. Abuse of trust, the most serious of four charges, carries a potential 7-year sentence and $1.5-million fine. Police want him kept in custody, to prevent evidence tampering or flight. More »
- Rogue Trader Bet $73B —Twice SocGen's Worth
  
  Washington Post | Jan 28, 08 5:41 AM CST
  
  (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 »
- From Rogue Trader to Left-Wing Hero
  
  Guardian (UK) | Jan 27, 08 7:48 AM CST
  
  (Newser) - For a man who nearly sank one of the largest and most venerable banks in France, rogue trader Jérôme Kerviel has certainly won a lot of support, writes the Observer . In a country that remains weary of so-called "Anglo-Saxon" business models, the Société Générale banker now finds himself in the profoundly ironic position of anti-capitalist hero. More »
- Rogue Trader in Police Custody
  
  BBC | Jan 26, 08 9:37 AM CST
  
  (Newser) - Rogue trader Jérôme Kerviel is in the custody of French police today, the BBC reports, being held for questioning on the fraudulent trading scheme that cost Société Générale $7 billion. Police searched his flat in an upscale Paris neighborhood yesterday, leaving with a number of briefcases. They also visited the bank's headquarters, collecting documents and computer disks relating to the case. More »
- From Clerk to Rogue Trader to Facebook Laughingstock
  
  New York Times | Jan 25, 08 11:14 AM CST
  
  (Newser) - You don’t need a fancy education to lose $7.2 billion and become an Internet laughingstock. In the clubby world of French banking, Société Générale traders are usually the Gallic equivalent of Ivy League MBAs, but Jérôme Kerviel, a lowly biz school grad, worked his way up from shy clerk to secretive junior trader, the New York Times reports. Clearly, this man deserves the Nobel Prize for Economics. More »
- Did SocGen Crash the Markets and Dupe the Fed?
  
  Financial Times (UK) | Jan 25, 08 8:55 AM CST
  
  (Newser) - When Société Générale execs uncovered the scale of rogue trader Jérôme Kerviel's fraud last weekend, they had no choice but to unwind his positions. And while they did warn French regulators, SocGen kept the Monday sell-off under wraps, to avoid even bigger losses than the $7 billion hit it took. So did the French bank's trades exacerbate the huge falls in the markets that day, asks the Financial Times, and trick the Fed into a rate cut? More »
- 'Rogue Trader' Identified, But Still on Loose
  
  Wall Street Journal | Jan 24, 08 2:46 PM CST
  
  (Newser) - Jérôme Kerviel, a trader at Société Générale, is the man who lost the French bank $7.2 billion in fraudulent trades, using an "intimate and malicious" knowledge of bank procedure to cover his tracks, the Wall Street Journal reports. The 31-year-old Kerviel got no benefit from the trades, though the huge loss may have helped to spark Monday's worldwide selloff. More »
- SocGen Fraud Dominates Davos Talks
  
  CNBC | Jan 24, 08 12:43 PM CST
  
  (Newser) - The revelation of enormous fraud by a rogue trader at Société Générale pushed other issues aside today at the World Economic Forum in Davos, Switzerland, CNBC reports. A panel on sovereign wealth funds turned into an impromptu discussion on repercussions of the $7.3 billion cover-up. The market turmoil that the SocGen scandal exacerbates led one delegate to say simply, "investment banks are horrendous." More »
- SocGen Fraud: How Did One Man Lose $7B?
  
  Daily Telegraph (UK) | Jan 24, 08 9:12 AM CST
  
  (Newser) - Société Générale has not named the trader responsible for the largest bank fraud in history—which caused the bank to announce a $7.16 billion writedown today—but the Telegraph reports that his responsibilities were modest. He took out "plain vanilla" futures on the European equities markets, betting against other traders to hedge risk. Instead he started to buy his own positions, then constructing fictional transactions to hide losses. More »
- SocGen Admits Biggest Ever Bank Fraud of $7.3B
  
  Financial Times (UK) | Jan 24, 08 4:30 AM CST
  
  (Newser) - One of the world's largest banks has admitted epic-scale fraud by a rogue trader that has led to $7.3 billion in losses. French banking group Société Générale had to issue nearly $8 billion in emergency shares after the announcement of "serious" illegal activity by an "imprudent employee" working in the bank's investment banking division. The SocGen announcement represents a massive blow to already fragile investor confidence in the banking sector, writes the Financial Times. More »
- Rogue Trader Costs Bank Billions
  
  Forbes | Jan 24, 08
  
  Not just anyone can lose $7 billion of his company's money. It takes talent, unbelievably bad luck and, above all, an intimate understanding of a firm's risk management and control policies to cover up the tracks. Société Générale, the French banking giant, said Thursday it has just such a trader, who lost big betting on the direction of European stock indexes and tried to cover it up with fake positions.
- Facebook 'friends' desert French rogue trader
  
  Guardian (UK) | Jan 24, 08
  
  If ever evidence were needed that a Facebook friend is anything but a friend in need - the declining cyber-support for the man named today as history's biggest rogue trader speaks volumes. When Jerome Kerviel in Facebook's Banque Société Générale group was named in the media as the man who has cost French bank %u20AC4.9bn (£3.7bn) he still had 11 friends.
- Fed Unaware on Jan. 21 of SocGen Loss, Official Says
  
  Bloomberg | Jan 24, 08
  
  Jan. 24 (Bloomberg) -- Federal Reserve policy makers didn't know about a $7.2 billion trading loss at Societe Generale SA prior to their Jan. 21 decision to reduce interest rates, said a Fed official.

Stories 21 - 35 of 35

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Trading in shares of Societe Generale was supended, 24 January 2008, after the French banking giant announced a sole trader was responsible for racking up 4.9 billion euros (7.15 billion dollars) in losses.... (AFP)

Pedestrians walk past a branch office of French bank Societe Generale, Thursday, Jan. 24, 2008 in Paris. Societe Generale said Thursday it has uncovered a euro4.9 billion (USD7.14 billion) fraud, one... (Associated Press)

Pedestrians walk past a branch office of French bank Societe Generale, Thursday, Jan. 24, 2008 in Paris. French bank Societe Generale said Thursday it has uncovered a euro4.9 billion (US$7.14 billion)... (Associated Press)

Pedestrians walk past a branch office of French bank Societe Generale, Thursday, Jan. 24, 2008 in Paris. Societe Generale said Thursday it has uncovered a euro4.9 billion (USD7.14 billion) fraud, one... (Associated Press)

French bank Societe Generale CEO Daniel Bouton reacts during a press conference at the bank headquarters, Thursday Jan. 24, 2008 outside Paris. Societe Generale said it has uncovered a euro 4.9 billion... (Associated Press)

French bank Societe Generale CEO Daniel Bouton reacts during a press conference at the bank headquarters, Thursday Jan.24, 2008 outside Paris. Societe Generale said it has uncovered a euro 4.9 billion... (Associated Press)

Bank of France governor Christian Noyer speaks during a press conference Thursday Jan. 24, 2008 in Paris. French bank Societe Generale said Thursday it has uncovered a euro4.9 billion (US$7.14 billion)... (Associated Press)

People enter the headquarters building of French bank Societe Generale, Thursday Jan. 24, 2008, outside Paris. Societe Generale said Thursday it has uncovered a euro4.9 billion (US$7.14 billion) fraud,... (Associated Press)