A junior trader blamed for causing a $7 billion loss at French bank Societe Generale has handed himself into the police and is cooperating with their investigation, Reuters reported.
Jerome Kerviel, 31, turned up at the headquarters of the finance police in southeast Paris during the afternoon and is likely to be held for up to 48 hours before prosecutors decide whether to launch legal proceedings against him.
SocGen has accused its trader of taking “massive fraudulent” positions in 2007 and 2008 on European equity market indices, which left them nursing massive losses as they unwound the positions in plunging markets at the start of last week.
Authorities are putting pressure on SocGen’s managers to explain how a bank that won accolades for innovation and boasted state-of-the-art risk controls could have been tripped up by a junior trader acting alone.
The scandal at SocGen struck at the height of a global credit crisis, set off by a meltdown in U.S. subprime mortgages, which has forced banks around the world to take tens of billions of dollars in charges as the value of their exposures crumbled.
When it announced the fraud, SocGen also unveiled a writedown of 2.05 billion euros on subprime-related exposures. Until then, SocGen had not taken any significant charges despite constant market rumors it faced substantial liabilities.
The fraud scandal struck a heavy blow to SocGen’s investment banking business, which acquired an international reputation for sophisticated financial engineering.
SocGen’s Executive Chairman Daniel Bouton compared the bank’s downfall to a Greek tragedy as Kerviel desperately attempted to conceal his huge bets on a fall in stock market prices, but only deepened his predicament in the process.
Kerviel was able for months to keep one step ahead of his supervisors by manipulating fictitious trades and evading checks like “a mutating virus”, Bouton said in an interview with Paris daily Le Figaro published on Saturday.
SocGen has lodged a complaint with police based on three main charges -- fraudulent falsification of bank records, fraudulent use of such records and computer fraud. A group of small SocGen shareholders have also filed a complaint, which includes accusations of fraud and breach of trust.
The various charges carry maximum prison terms of between 2 and 5 years, plus fines of up to 375,000 euro ($549,500).
[KHS]
[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]
Jerome Kerviel, 31, turned up at the headquarters of the finance police in southeast Paris during the afternoon and is likely to be held for up to 48 hours before prosecutors decide whether to launch legal proceedings against him.
SocGen has accused its trader of taking “massive fraudulent” positions in 2007 and 2008 on European equity market indices, which left them nursing massive losses as they unwound the positions in plunging markets at the start of last week.
Authorities are putting pressure on SocGen’s managers to explain how a bank that won accolades for innovation and boasted state-of-the-art risk controls could have been tripped up by a junior trader acting alone.
The scandal at SocGen struck at the height of a global credit crisis, set off by a meltdown in U.S. subprime mortgages, which has forced banks around the world to take tens of billions of dollars in charges as the value of their exposures crumbled.
When it announced the fraud, SocGen also unveiled a writedown of 2.05 billion euros on subprime-related exposures. Until then, SocGen had not taken any significant charges despite constant market rumors it faced substantial liabilities.
The fraud scandal struck a heavy blow to SocGen’s investment banking business, which acquired an international reputation for sophisticated financial engineering.
SocGen’s Executive Chairman Daniel Bouton compared the bank’s downfall to a Greek tragedy as Kerviel desperately attempted to conceal his huge bets on a fall in stock market prices, but only deepened his predicament in the process.
Kerviel was able for months to keep one step ahead of his supervisors by manipulating fictitious trades and evading checks like “a mutating virus”, Bouton said in an interview with Paris daily Le Figaro published on Saturday.
SocGen has lodged a complaint with police based on three main charges -- fraudulent falsification of bank records, fraudulent use of such records and computer fraud. A group of small SocGen shareholders have also filed a complaint, which includes accusations of fraud and breach of trust.
The various charges carry maximum prison terms of between 2 and 5 years, plus fines of up to 375,000 euro ($549,500).
[KHS]
[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]
'아이디어드림 > 아이디어거래소' 카테고리의 다른 글
| Fed Cuts and Stimulus Package Won’t Stem Foreclosures (0) | 2008.02.19 |
|---|---|
| Turmoil Puts Big Takeovers on Hold (0) | 2008.02.19 |
| Cutback on FSC and FSS First (0) | 2008.02.19 |
| Office Space Supply Expected to Surge (0) | 2008.02.19 |
| CJ제일제당, 수원 제약공장 680억원에 매각 (0) | 2008.02.19 |