Posted on 01/28/2008 9:07:29 PM PST by NormsRevenge
This is insane.
I can only suppose that monitoring position limits is considered a vulgar Anglo-Saxon banking practice and therefore much disdained in La Belle France!
He’s only under investigation...He has not been formally charged...
Quote: “Kerviel was freed on bail after being placed under formal investigation for “breach of trust”, “falsifying and using falsified documents,” and “breaching IT procedures”, said his lawyer Elisabeth Meyer.
Judges rejected a bid to charge Kerviel, accused by the French banking giant of losing 4.9 billion euros (7.15 billion dollars), with the more serious crimes of “gross breach of trust” and “attempted fraud.”
So um, he didn’t steal no candy, produced a forged note from his mommy, and he tried to change his desktop picture.
Now, if after a 6 month investigation he could face formal charges of actual candy theft, forgery of mommy’s name, and trying to change his Home Page...
This is going to go down just like the TotalFinaElf slush fund for politicians personal use. Lots of initial outrage and media during the breaking of the news, then the Merovingian bureaucracy will obfuscate and prolong the investigation until only a few scapegoats are convicted with wrist slaps.
France has no rule of law, just the rule of man.
IE was the corporate browser and he installed firefox?
Leni
He also took a stuffed Teddy Bear that was meant as a Christmas gift as part of the French Foreign Legion’s Toys Pour Les Babes
Les pauvres infants!....Le Porc !
As I recall the original story, he had previously worked in some position in the company which gave him knowledge of a 'back-door' into the trading system. That knowledge let him completely bypass the normal system safeguards. He apparently also had a way to cover his tracks. This went on for quite some time before it was detected.
Ping. I have to catch a flight in a few hours and will be traveling for a few weeks. If you get any more articles on this please ping them so I can keep up with the story.
Thanks.
I think I see what the problem is.
Make money?
I’m sorry, but that such a junior person singlehandedly managed to establish binding trading positions in the name of the bank in excess of $70 billion demonstrates that SoGen’s system of internal controls is a giant joke, and a failure across the entire spectrum of segregation of duties, independent checks, the authorization, approval and documentation of transactions in the name of the bank and managerial oversight.
This story has the makings of a Michael Ridpath novel. All it needs is a mysterious murder.
Granted, this fiasco took place not in forex, but(allegedly) in equity hedging, which is usually such a simple activity that it can easily be taught to a fifth-former in a couple of weeks' time. Makes the point rather more forcefully, given that, now doesn't it? ;^)
Bottom line: 2/3rds or more of SocGen's public ''explanation'' is plain merde; good old American crapola, in English -- except this time it's French crapola. Their tale is plausible enough, but crediting a junior trader with more computer expertise than Q, Vic Haghani, Ned Irons, and James Bond wrapped all together is just a bit, er, shall we say, less than credible.
footnote: Haghani was one of LTCM's lead traders, as well as a heavyweight computer boffin (well, for finance, anyway). Edward N. ''Ned'' Irons is arguably the most brilliant computer scientist of the last 40 years, now involved in the 'Natural Language' project, and, with Pete Weiner, the co-inventor of both the original C-prompt in 1967 and the first multiuser multitasking minicomputer operating system in the early 1970s.
Good yarn. Haven't seen any of his recent works. Pls advise!
I agree that their are some serious shortcomings, to say the least, :=) with the company's internal controls. Apparently, this guy wasn't all that junior and was something of a computer whiz. Still, that level of sloppiness is inexcusable.
The trade value that he set up was something on the order of $3 billion. The losses ballooned to about $7 billion as the company unwound the positions into a market that was already dropping. As I understand it, their trades exacerbated the drop, increasing their losses.
There is more going on with regards to his brother....and more coming out every day.
When questioned by his boss about some ficticious traders ability to pay, he wrote a ficticioius email from the ficticious trader and the boss apparently accepted it.
Society General may not be left standing by week’s end.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.