Jan. 28, 2008 16:15
The story of the trader at France's Societe Generale who apparently lost several billion dollars during the course of his time working at the bank and was able to conceal it has been going on for at least a week. The latest factual update is that the trader was just arrested and will be charged under French law for his actions. I thought this article was interesting because it explains how closely conneted the international banking markets are and how the acts of one person in a particular country can impact on the global markets:
http://www.iht.com/articles/2008/01/27/business/27socgen.php .
The Center for Computer-Assisted Legal Instruction
29/01/2008, 12:22
Specialists in France question the ability of this trader, Jerome Kerviel, to have acted on his own, buying 48 million euros worth in contracts, with no control and no alert. The trader accuses his hierarchy of not implementing the usual control procedures because he was making a lot of cash. The impact is huge: the bank nearly went bankrupt, losing 4.9 million euros, some say it partially caused last week's downfall of the French, European and American markets, many separate investigations have been openned, President Sarkozy and the government are now involved, reforms of the financial system have emerged. Note that Societe Generale developped a plan along with two American banks to insure its capital once the trader's contracts had been sold.