French trader loses $7.1bn through fraudulent trading; may have caused $150bn market downturn
http://news.bbc.co.uk/1/hi/business/7208439.stm
Quote:
Societe Generale has filed a legal complaint against the trader accused of defrauding the bank which led to a loss of 4.9bn euros ($7.1bn; £3.7bn).
While Societe Generale has yet to name the trader, media reports say he is 31-year-old Frenchman Jerome Kerviel.
SocGen's chairman Daniel Bouton called the fraud a "one-off" and denied it was a trading or risk-management fault. [...]
They also say that the losses have left the bank vulnerable to a takeover bid.
"Societe Generale will certainly lose its independence after such an operation. We will... have a redefinition of the banking world and France will be no exception," Alain Crouzat at Montsegur Finance told Le Parisien newspaper. [...]
Some analysts suggest that the rogue trader's actions might have contributed to the stock market turmoil earlier this week.
"Something like this can aggravate the situation, but there has to be underlying concern in the first place," said Howard Archer, economist at Global Insight.
"Any market that is nervous for a number of reasons is going to be touchy. And anything that adds fuel to the nerves isn't going to help," said Anthony Scott, a stockbroker at Charles Stanley.
French President Nicolas Sarkozy called the events at Societe Generale a "large-scale internal fraud", but added that the losses "do not affect the solidity and reliability of the French system".
Wouldn't want to be Jerome Kerviel right now.
