http://news.bbc.co.uk/2/hi/business/7206270.stm
Rogue trader to cost SocGen $7bn
French bank Societe Generale says it has uncovered “massive” fraud by a Paris-based trader which resulted in a loss of 4.9bn euros ($7.1bn; £3.7bn).
The bank said the fraud was based on simple transactions, but concealed by “sophisticated and varied techniques”.
While Societe Generale has yet to name the trader, media reports say he is 31-year-old Frenchman Jerome Kerviel.
The losses are four times greater than those made by Nick Leeson, the rogue trader who brought down Barings Bank.
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I’m not entirely sure what went on here, but it seems that a bank employ at Societe Generale was using his position to perform fraudulent deals involving predicting events in the financial markets. How this worked, I dunno.
The story as it developed:
1) The bank announces it’s had a bit of a problem.
2) People react, and information is released about the fraud.
3) More is revealed about the man who apparently cost the bank all that money.
4) People wonder about what effects this will have on the world’s markets.
