Wednesday 23 July 2014
 
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Trader an expert in risk control systems

Paris , January 25, 2008

The trader blamed for the world's biggest banking fraud was a junior banker who used his intimate knowledge of Societe Generale's risk control systems to conceal months of illegal dealing, the bank and insiders said.

Sources within SocGen named the dealer as 31-year-old Jerome Kerviel, who worked on the bank's European equities derivatives desk at its Paris headquarters and earned less than 100,000 euros ($146,500) a year.

SocGen accused the trader of taking "massive fraudulent" positions last year and this year on European equity market indices, which left them nursing 4.9 billion euros of losses as they unwound the positions in turbulent markets this week.

A senior bank board member said that Kerviel "was not a star", but Bank of France governor Christian Noyer told reporters that the rogue trader was a "genius of fraud".

The problem only came to light recently, and Kerviel himself met bank executives face-to-face at the weekend as they tried to unravel the web of deceit that cut through all the company's supposedly sophisticated safety mechanisms.

"It turns out that this was possible because it happened to be someone who had knowledge of the internal control systems from his earlier career and who is no doubt a computer genius," Noyer said.

Kerviel joined SocGen in 2002 and was trading in one of the most basic financial instruments in the complex world of derivatives - futures contracts on European equity indices.




Tags: SocGen | trader | Risk |

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