That's patently NOT true, he didn't CAUSE the global market meltdown.
He traded way beyond his bounds and got in over his head and covered up his trades with ficticious activity.
When SG discovered what had happened, they had no option but to immediately unwind the positions, but it happened on Monday when the market WAS ALREADY TAKING A DIVE, hence the 7.1 billion dollar loss
He didn't cause the meltdown, the meltdown aggravated his losses, which in turn likely fueled further loss.
Had SG sat it out, they might have mitigated the loss, but I suspect they couldn't legally do that
NYSE was closed on Monday
“Had SG sat it out, they might have mitigated the loss, but I suspect they couldn’t legally do that”
I don’t know about the legality of it, but it would have been imprudent. Once word leaked out (and it WOULD leak out) that they were sitting on this position, their counterparts in the market would move in for the kill, increasing the losses perhaps beyond their capacity to cover (think LTCM ). The possibility that the resulting collapse of the 2nd largest bank in France might spread and blow back on the initial winners might not occur to the participants until it was too late.
No, unwinding fast, before their problem was widely known, was the prudent thing to do.