France's second-largest bank, Societe Generale, has announced it's suffered from a fraud by one of it's traders that amounted to more than £3.5 billion. There's an awful lot of noughts on the end of that number.
It also appears to have suffered a 2.05 billion Euro write-down due to their sub-prime activities.
That amounts to a rather eye-watering double-whammy.
The fraud is being put down to unauthorised activities of ONE trader. Surely, any half-competent bank would have procedures to prevent unauthorised trades, and certainly to prevent them reaching that scale. And according to news reports, it's a fraud as a result of a doubling-up type activity on securites over a period of many months, so it's a long-ish term failure to notice it, not even something that went past them too fast to notice. That suggests that management were asleep at the wheel, too.
Other banks aren't impressed. Ion-Marc Valhi at Amas Bank said "I am sorry but I have a hard time buying the fact that a trader was able to set up a 'secret trade' of 4.9 billion [Euros] without anybody finding out". Me too.
Frederic Hamm of Agilis Gestion, believes that the fraud "impacts the reputation of the bank". No poop, Sherlock. That strikes me as an announcement from the Ministry of the Blindingly Obvious.
Seems to me that Nick Leeson's activities at Barings were a model of integrity, restraint and financial acumen compared to this. Though they haven't yet identified the trader responsible - where are you working these days, Nick?![]()
(Just kidding).


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