The Man Who Lost $7.2 Billion
How did a 31-year-old low-level bank trader with limited access lose five times as much money as the worst rogue trader ever? That's the question European authorities and Societe Generale, France's second-largest bank, are trying to answer.
How did a 31-year-old low-level bank trader with limited access lose five times as much money as the worst rogue trader ever? That’s the question European authorities and Societe Generale, France’s second-largest bank, are trying to answer.
WAIT BEFORE YOU GO...Los Angeles Times:
Bank officials said during a conference call Thursday in Paris that they had unwound all the transactions from Monday to Wednesday before publicly disclosing the alleged fraud. They added that the bank suffered an “enormous loss” because of unfavorable market conditions but that there was no evidence [Jerome] Kerviel personally profited from the scheme.
The timing and nature of Societe Generale’s sales were unclear, however, as was their effect on European exchanges. Those markets plummeted more than 5% on Monday on the heels of a steep sell-off in Asian markets.
The Fed announced its rate cut early the next morning. A Fed official said the central bank was unaware of the Societe Generale situation when it took action, according to the Reuters news agency. The Fed maintained Tuesday that it dropped rates in response to “a weakening of the economic outlook” and deteriorating conditions in the financial markets.
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