Rogue Trader ? Weaksauce, how about a 7 billion fraud ?

[woot!]

The story is kind of similar to the one of Nick Leeson, the trader from the the Bargins Bank in London, who had lost £827 million in 1995, managing to cover up his losses through something like 3 years.
This time, it's a french trader working for the Societe Generale, who cost his group 5 billion Euros.

French bank SocGen says hit by 4.9 bln euro fraud - washingtonpost.com

[prescient63]

That is all sorts of awesome. It probably started with hiding a few million in losses and then after your losses keep growing your like fuck it I might as well keep hiding them because I'm fucked either way. Then you just let it grow to 5 billion euros. HAHA Anyhow, the way the story paints it the whole act was perpetrated by a sole low level trader, but I can't believe this is the case. There must be some oversight, and I wouldn't be surprised to find out that he was used as the scapegoat for some other higher level traders.

[Borzak]

I just read the same article before coming here....I was thinking if your going to loose and cover up that much...why not just embezzle a much smaller amount and be done with it?

[Rune]

I was at the dollar store once in the 90's and they had hard back copies of

Amazon.com: Ugly Americans : The True Story of the Ivy League Cowboys Who Raided the Asian Markets for Millions: Books: Ben Mezrich

in that book they described a situation a lot like this, where the guy just kept losing on trades and like the quintessential retarded gambler just kept doubling his next bet until someone figured it out and the entire company went into the shitter.

Best dollar I ever spent, really. While I doubt the work was anything but fiction it was a look at a sector of the business world (high stakes finance) in which I was totally ignorant.

Oh hey the article mentions him:

If fraud is proved, the loss will be the biggest caused by a single trader, dwarfing the $1.4 billion loss by trader Nick Leeson - Wikipedia, the free encyclopedia that broke British bank Barings

[prescient63]

Actually if you want to read a really good and entertaining book about traders I highly recommend Liar's Poker.

[sachemsiouxx]

FOR ZE MOZERLAND!!

[Adam12]

Originally Posted by sachemsiouxx

FOR ZE MOZERLAND!!

Mange moi le'cul, monsieur !

[Snugglebear]

SACRE BLEU, SEVEN BEELYAWN DOLLAR?!

I just want to know, how did he lose that much money working only 30 hours a week?

[sachemsiouxx]

Originally Posted by Snugglebear

I just want to know, how did he lose that much money working only 30 hours a week?

You forgot the 25 days of vacations per year.Guy is obviously velly good at efficiency.

[vurt]

I don't understand how this was possible. Why does this guy have access to dozens of billions dollars? Shouldn't there have been some alarm triggered? Seriously don't they keep track of their employees' transactions? I just don't get it.

[sachemsiouxx]

Official version (from our majesty himself) : "guy was working alone, was able to avoid security checks cause he knew how they were made and did not get richer in the process.Do not worry people your money is safe cause french banking system is ze good".
It does smell a lot like bullshit to me but I have no idea which of these parts (if any) is true.

[Rune]

I briefly worked in some white collar crime divisions. Based off my total lack of experience, I concluded that it is literally a miracle when you catch someone red-handed, and a conviction is like God himself hand-delivered the evidence to you. It's nearly impossible to prosecute it, I mean, you really have to do something hilariously stupid to flag the attention of someone. Of course most of these guys had more education and training than the police / CPA trying to catch them, so it was difficult, but the cops knew that greed always flushes them out in the end.

It's almost sad how many people would embezzle an enormous but not silly amount of money, then more and more every year until it's just ludicrous amounts of money that would be impossible to not notice.

[K`Lag]

I know someone who works for a company that was awarded a contract to develop a Risk Management system for SocGen... they cancelled the project because they believed it would cost too much... well it cost them $7bln!

[Borzak]

I think they pushed off a big loss on one guy.

They lost a very small amount of value on the market (like 4%) for basically writing off 7 Billion dollars worth of losses.

If they had actually said we are writting off 7 Billion in losses like US brokerage and financial firms I bet they had lost 25% of their value in the market overnight.

Pretty smart if you ask me. It's all about damage control.

Like I said earlier if this guy could easily cover up BILLIONS of real losses why would that one guy not just embezzle a fraction of that instead and he would still have a job - and be rich.

[Loftish v2]

Originally Posted by Rune

I was at the dollar store once in the 90's and they had hard back copies of

Amazon.com: Ugly Americans : The True Story of the Ivy League Cowboys Who Raided the Asian Markets for Millions: Books: Ben Mezrich

in that book they described a situation a lot like this, where the guy just kept losing on trades and like the quintessential retarded gambler just kept doubling his next bet until someone figured it out and the entire company went into the shitter.

Best dollar I ever spent, really. While I doubt the work was anything but fiction it was a look at a sector of the business world (high stakes finance) in which I was totally ignorant.

Oh hey the article mentions him:

If fraud is proved, the loss will be the biggest caused by a single trader, dwarfing the $1.4 billion loss by trader Nick Leeson - Wikipedia, the free encyclopedia that broke British bank Barings

The author claims the story is true with names changed, I always wondered about that. I agree, however, what a great book.

Originally Posted by prescient63

Actually if you want to read a really good and entertaining book about traders I highly recommend Liar's Poker.

Seconded.