More red flags from SocGen trader
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More red flags from SocGen trader
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Scott Jagow: This morning, French bank Societe Generale reported a $5 billion loss for the last quarter. What a surprise. That’s what happens when one of your traders loses more than $7 billion all by himself — well, maybe all by himself.
Still, the bank did made a profit for 2007. More now from Stephen Beard at our European Desk in London.
Stephen Beard: Societe Generale made a profit of $1.3 billion in 2007. But that was an 82 percent drop from the previous year. The bank confirmed a record loss in the fourth quarter, courtesy of junior trader Jerome Kerviel.
The bank insists that Kerviel was acting alone. But an internal investigation has just acknowledged that better management might have prevented the alleged fraud. It reveals 75 warning signs that were ignored.
Justin Urquart-Stewart of Seven Investment:
Justin Urquart-Stewart: I think the serious concern internally within Societe Generale must be: Was any other management aware of it, involved in it and complicit in it?
The internal report also gave details of Kerviel’s bonus. In 2006, he got $40,000. A year later, on the back of his apparently successful trading, he asked for $400,000, but got half that instead.
In London, this is Stephen Beard for Marketplace.
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