$7.1B fraud committed by one trader

[LegendKiller]

Originally posted by: Koing

Originally posted by: LegendKiller

Originally posted by: Svnla

Originally posted by: LegendKiller

Originally posted by: Svnla
Tst..tst...tst...where are the internal controls/check and balance systems of that bank/brokerage?

<<<------speaking from an Auditor point of view

I wonder if they will pay a high rate of return for savings and CDs.

European ATOTers, do you have FDIC (insured all savings/CDs up to a certain amount) or something like that overthere?

Do you think that people can't figure out how to circumvent them?

I understand about frauds. You can't prevent or stop EVERYTHING little thing but 7.1 BILLIONS is a huge number by ONE trader (if the story is true). This is lowly trader, NOT the CEO/CFO or Enron type.

A "lowly trader"? Please. Many of these guys make millions per year because they are good, there's nothing "lowly" about a guy that can somehow use his knowledge of back and middle offices to lay on tens of billions of futures contracts, which moved against him.

It wouldn't be difficult to do if you knew the BO/MO guys and could manipulate procedures, signatures...etc.

The guy wasn't that good of a trader.

He was in Back Office for 7yrs and and then moved to be a trader. He has been a trader for the past 3yrs and with his salary and bonuses only made £75k. That isn't that much for a futures trader. So relatively speaking, he wasn't that good at his job at all...

But yeah they should have some consideration limits on the books he was trading on.

Koing

I was speaking in more general terms, as was the guy before in referring to "lowly trader". Sure, he night not have been shit-hot, but he wasn't exactly a loser either.

As far as having a limited book, he did, he circumvented the limits. Obviously he was smart enough to do that.

 

[AndrewR]

That used to be my bank when I lived in France.

The trader was "suspended", huh? Wow, that'll show him.

 

[Svnla]

Originally posted by: LegendKiller

Originally posted by: Svnla
Legend - What I mean "lowly" is the "power position" of that trader in the company. I am sure he is making good money. As a mater of fact, he made about $145K (salary and bonus) and been with the company since 2000. Like you said, he could manipulate procedures, signatures..etc ...but what bothers me is how he was able to do those things without any uppper management oversight until now.

Jman - I read another article about this problem and look like he did not do it for personal gains. Probably he did do it to hide his bad trades?


Here is another article:

http://biz.yahoo.com/ap/080124...te_generale_fraud.html

How hard is it to imagine that somebody who knows everything about the way MO/BO work can manipulate things through false orders/trades, forged signatures...etc.

All of the controls only make it harder to do something. It's akin to picking all of the low hanging fruit. However, those truly skilled and those that know the loopholes, can do it quite easily, but they can rarely contain it.

This article proves my point. A high level executive is one thing but a low level employee can do such huge damages ===> lax or lack of internal controls.

http://www.foxbusiness.com/mar...r-blamed_450400_2.html

".......It's a simple story really: someone learns how to profit from lax company controls and chooses to act on it....."

"......?This is a 15-year-old story, or more,? said Richard Cellini, vice president of Integrity Interactive. ?Banks and lawyers are very backward looking. They have this happen to them over and over again and never learn how to fix it.?......"

"....?Societe Generale should have done something about internal controls years ago,? Cellini said. ?It took this massive loss for them to realize that, and it?s really unfortunate.?..."

 

[LegendKiller]

Originally posted by: Svnla

Originally posted by: LegendKiller

Originally posted by: Svnla
Legend - What I mean "lowly" is the "power position" of that trader in the company. I am sure he is making good money. As a mater of fact, he made about $145K (salary and bonus) and been with the company since 2000. Like you said, he could manipulate procedures, signatures..etc ...but what bothers me is how he was able to do those things without any uppper management oversight until now.

Jman - I read another article about this problem and look like he did not do it for personal gains. Probably he did do it to hide his bad trades?


Here is another article:

http://biz.yahoo.com/ap/080124...te_generale_fraud.html

How hard is it to imagine that somebody who knows everything about the way MO/BO work can manipulate things through false orders/trades, forged signatures...etc.

All of the controls only make it harder to do something. It's akin to picking all of the low hanging fruit. However, those truly skilled and those that know the loopholes, can do it quite easily, but they can rarely contain it.

This article proves my point. A high level executive is one thing but a low level employee can do such huge damages ===> lax or lack of internal controls.

http://www.foxbusiness.com/mar...r-blamed_450400_2.html

".......It's a simple story really: someone learns how to profit from lax company controls and chooses to act on it....."

"......?This is a 15-year-old story, or more,? said Richard Cellini, vice president of Integrity Interactive. ?Banks and lawyers are very backward looking. They have this happen to them over and over again and never learn how to fix it.?......"

"....?Societe Generale should have done something about internal controls years ago,? Cellini said. ?It took this massive loss for them to realize that, and it?s really unfortunate.?..."

Ahhh, monday morning quarterbacking. If the internal controls were so lacking then the French banking authority would have done something about it. Stuff like that is caught all of the time, the last major company in the US that I know of which got hit by the regulators for having lax internal controls was Capital One in 2002 or so.

People can game the system. WSJ estimates that the guy might have been able to lay on somewhere around 50-70bn of trades. How is that possible even with loose controls? It is a simple answer, it wasn't just about controls.

 

[DBL]

Originally posted by: LegendKiller
Ahhh, monday morning quarterbacking. If the internal controls were so lacking then the French banking authority would have done something about it. Stuff like that is caught all of the time, the last major company in the US that I know of which got hit by the regulators for having lax internal controls was Capital One in 2002 or so.

People can game the system. WSJ estimates that the guy might have been able to lay on somewhere around 50-70bn of trades. How is that possible even with loose controls? It is a simple answer, it wasn't just about controls.

Personally, I don't buy it. There has to be more to this story.

 

[Koing]

Originally posted by: LegendKiller

Originally posted by: Koing

Originally posted by: LegendKiller

Originally posted by: Svnla

Originally posted by: LegendKiller

Originally posted by: Svnla
Tst..tst...tst...where are the internal controls/check and balance systems of that bank/brokerage?

<<<------speaking from an Auditor point of view

I wonder if they will pay a high rate of return for savings and CDs.

European ATOTers, do you have FDIC (insured all savings/CDs up to a certain amount) or something like that overthere?

Do you think that people can't figure out how to circumvent them?

I understand about frauds. You can't prevent or stop EVERYTHING little thing but 7.1 BILLIONS is a huge number by ONE trader (if the story is true). This is lowly trader, NOT the CEO/CFO or Enron type.

A "lowly trader"? Please. Many of these guys make millions per year because they are good, there's nothing "lowly" about a guy that can somehow use his knowledge of back and middle offices to lay on tens of billions of futures contracts, which moved against him.

It wouldn't be difficult to do if you knew the BO/MO guys and could manipulate procedures, signatures...etc.

The guy wasn't that good of a trader.

He was in Back Office for 7yrs and and then moved to be a trader. He has been a trader for the past 3yrs and with his salary and bonuses only made £75k. That isn't that much for a futures trader. So relatively speaking, he wasn't that good at his job at all...

But yeah they should have some consideration limits on the books he was trading on.

Koing

I was speaking in more general terms, as was the guy before in referring to "lowly trader". Sure, he night not have been shit-hot, but he wasn't exactly a loser either.

As far as having a limited book, he did, he circumvented the limits. Obviously he was smart enough to do that.

SocGen use our Enterprise platform

Looking at it, it is very easy to mess about with the system if you have had Middle Office experience.

http://www.thedailymash.co.uk/...rs-a-week-20080125680/ haha

Koing

 

[LegendKiller]

Originally posted by: DBL

Originally posted by: LegendKiller
Ahhh, monday morning quarterbacking. If the internal controls were so lacking then the French banking authority would have done something about it. Stuff like that is caught all of the time, the last major company in the US that I know of which got hit by the regulators for having lax internal controls was Capital One in 2002 or so.

People can game the system. WSJ estimates that the guy might have been able to lay on somewhere around 50-70bn of trades. How is that possible even with loose controls? It is a simple answer, it wasn't just about controls.

Personally, I don't buy it. There has to be more to this story.

I don't really either, but people jumping the gun and blaming lax internal controls doesn't get to the bottom either.

 

[Svnla]

Originally posted by: LegendKiller

Originally posted by: Svnla

Originally posted by: LegendKiller

Originally posted by: Svnla
Legend - What I mean "lowly" is the "power position" of that trader in the company. I am sure he is making good money. As a mater of fact, he made about $145K (salary and bonus) and been with the company since 2000. Like you said, he could manipulate procedures, signatures..etc ...but what bothers me is how he was able to do those things without any uppper management oversight until now.

Jman - I read another article about this problem and look like he did not do it for personal gains. Probably he did do it to hide his bad trades?


Here is another article:

http://biz.yahoo.com/ap/080124...te_generale_fraud.html

How hard is it to imagine that somebody who knows everything about the way MO/BO work can manipulate things through false orders/trades, forged signatures...etc.

All of the controls only make it harder to do something. It's akin to picking all of the low hanging fruit. However, those truly skilled and those that know the loopholes, can do it quite easily, but they can rarely contain it.

This article proves my point. A high level executive is one thing but a low level employee can do such huge damages ===> lax or lack of internal controls.

http://www.foxbusiness.com/mar...r-blamed_450400_2.html

".......It's a simple story really: someone learns how to profit from lax company controls and chooses to act on it....."

"......?This is a 15-year-old story, or more,? said Richard Cellini, vice president of Integrity Interactive. ?Banks and lawyers are very backward looking. They have this happen to them over and over again and never learn how to fix it.?......"

"....?Societe Generale should have done something about internal controls years ago,? Cellini said. ?It took this massive loss for them to realize that, and it?s really unfortunate.?..."

Ahhh, monday morning quarterbacking. If the internal controls were so lacking then the French banking authority would have done something about it. Stuff like that is caught all of the time, the last major company in the US that I know of which got hit by the regulators for having lax internal controls was Capital One in 2002 or so.

People can game the system. WSJ estimates that the guy might have been able to lay on somewhere around 50-70bn of trades. How is that possible even with loose controls? It is a simple answer, it wasn't just about controls.

LOL..so I brought evidences to back my claim (lack of internal controls/lax of it) and what did you bring? Oh...your self claim of Wall Street knowledge and all the big words/acronyms.

I already said it before (my original post in this thread) and I will say it again. Yes, nothing can stop a crook from being a crook. But a low level trader/employee was able to do such a huge lose (IF he was really acted alone and no other inside help..as from all the evidences at the presence)...then it CAN NOT be internal controls? Ok then..if you say so.

Yes, maybe later they will discover other evidence(s)...conspiracy...other employees helped him..and so on...I didn't say it was not possible.

Unless you bring some other evidence(s) to debunk my claim, we have nothing further to debate.

 

[Miramonti]

Originally posted by: TheAdvocate
This smells like a cover up. That is a ridiculous sum of money.

No question about it, this is bs. No possible way can one person discretely lose over $7b at a bank like SG.

 

[LegendKiller]

Originally posted by: Svnla

Originally posted by: LegendKiller

Originally posted by: Svnla

Originally posted by: LegendKiller

Originally posted by: Svnla
Legend - What I mean "lowly" is the "power position" of that trader in the company. I am sure he is making good money. As a mater of fact, he made about $145K (salary and bonus) and been with the company since 2000. Like you said, he could manipulate procedures, signatures..etc ...but what bothers me is how he was able to do those things without any uppper management oversight until now.

Jman - I read another article about this problem and look like he did not do it for personal gains. Probably he did do it to hide his bad trades?


Here is another article:

http://biz.yahoo.com/ap/080124...te_generale_fraud.html

How hard is it to imagine that somebody who knows everything about the way MO/BO work can manipulate things through false orders/trades, forged signatures...etc.

All of the controls only make it harder to do something. It's akin to picking all of the low hanging fruit. However, those truly skilled and those that know the loopholes, can do it quite easily, but they can rarely contain it.

This article proves my point. A high level executive is one thing but a low level employee can do such huge damages ===> lax or lack of internal controls.

http://www.foxbusiness.com/mar...r-blamed_450400_2.html

".......It's a simple story really: someone learns how to profit from lax company controls and chooses to act on it....."

"......?This is a 15-year-old story, or more,? said Richard Cellini, vice president of Integrity Interactive. ?Banks and lawyers are very backward looking. They have this happen to them over and over again and never learn how to fix it.?......"

"....?Societe Generale should have done something about internal controls years ago,? Cellini said. ?It took this massive loss for them to realize that, and it?s really unfortunate.?..."

Ahhh, monday morning quarterbacking. If the internal controls were so lacking then the French banking authority would have done something about it. Stuff like that is caught all of the time, the last major company in the US that I know of which got hit by the regulators for having lax internal controls was Capital One in 2002 or so.

People can game the system. WSJ estimates that the guy might have been able to lay on somewhere around 50-70bn of trades. How is that possible even with loose controls? It is a simple answer, it wasn't just about controls.

LOL..so I brought evidences to back my claim (lack of internal controls/lax of it) and what did you bring? Oh...your self claim of Wall Street knowledge and all the big words/acronyms.

I already said it before (my original post in this thread) and I will say it again. Yes, nothing can stop a crook from being a crook. But a low level trader/employee was able to do such a huge lose (IF he was really acted alone and no other inside help..as from all the evidences at the presence)...then it CAN NOT be internal controls? Ok then..if you say so.

Yes, maybe later they will discover other evidence(s)...conspiracy...other employees helped him..and so on...I didn't say it was not possible.

Unless you bring some other evidence(s) to debunk my claim, we have nothing further to debate.

Wow, since when does Fox News or any other news source count as uncontrovertable evidence that controls were lax?

After working at a european bank and having my own deals combed through, where if I even have a missing w-9 for Patriot act purposes, or a missing audit sheet, I get my ass reamed by auditors and my deals aren't nearly as big as laying on multi-billion dollar trades.

Perhaps the French banking authorities suck, perhaps not. A lot of times these things aren't found out until late in the game, look at Jett, the HK guy, or even, more recently, Calyon's NY office which got hit by ~400MM in bad trades.

Overall, if you're smart, you can find ways to hide anything for a short while. Look at Enron, it only took a small amount of manipulation to hide a lot of stuff, including energy market manipualtion.

I don't have hard evidence that an intelligent guy with good understanding of MO/BO operations could hide trades in various accounts, using dummy entries to look like they were offset, and yes, perhaps not the most diligent controls, were in effect.

However, I do know people and systems and they are not infallable, regardless of how strong you think they are. Otherwise people wouldn't get away with social engineering or other scams.

 

[freegeeks]

apparantly the guy new perfectly how the BO worked and used some very complicated schemes to hide everything

 

[theeedude]

Either they are completely clueless about how to run a bank or this guy is the scapegoat of the year.

 

[Svnla]

Originally posted by: LegendKiller

Originally posted by: Svnla

Originally posted by: LegendKiller

Originally posted by: Svnla

Originally posted by: LegendKiller

Originally posted by: Svnla
Legend - What I mean "lowly" is the "power position" of that trader in the company. I am sure he is making good money. As a mater of fact, he made about $145K (salary and bonus) and been with the company since 2000. Like you said, he could manipulate procedures, signatures..etc ...but what bothers me is how he was able to do those things without any uppper management oversight until now.

Jman - I read another article about this problem and look like he did not do it for personal gains. Probably he did do it to hide his bad trades?


Here is another article:

http://biz.yahoo.com/ap/080124...te_generale_fraud.html

How hard is it to imagine that somebody who knows everything about the way MO/BO work can manipulate things through false orders/trades, forged signatures...etc.

All of the controls only make it harder to do something. It's akin to picking all of the low hanging fruit. However, those truly skilled and those that know the loopholes, can do it quite easily, but they can rarely contain it.

This article proves my point. A high level executive is one thing but a low level employee can do such huge damages ===> lax or lack of internal controls.

http://www.foxbusiness.com/mar...r-blamed_450400_2.html

".......It's a simple story really: someone learns how to profit from lax company controls and chooses to act on it....."

"......?This is a 15-year-old story, or more,? said Richard Cellini, vice president of Integrity Interactive. ?Banks and lawyers are very backward looking. They have this happen to them over and over again and never learn how to fix it.?......"

"....?Societe Generale should have done something about internal controls years ago,? Cellini said. ?It took this massive loss for them to realize that, and it?s really unfortunate.?..."

Ahhh, monday morning quarterbacking. If the internal controls were so lacking then the French banking authority would have done something about it. Stuff like that is caught all of the time, the last major company in the US that I know of which got hit by the regulators for having lax internal controls was Capital One in 2002 or so.

People can game the system. WSJ estimates that the guy might have been able to lay on somewhere around 50-70bn of trades. How is that possible even with loose controls? It is a simple answer, it wasn't just about controls.

LOL..so I brought evidences to back my claim (lack of internal controls/lax of it) and what did you bring? Oh...your self claim of Wall Street knowledge and all the big words/acronyms.

I already said it before (my original post in this thread) and I will say it again. Yes, nothing can stop a crook from being a crook. But a low level trader/employee was able to do such a huge lose (IF he was really acted alone and no other inside help..as from all the evidences at the presence)...then it CAN NOT be internal controls? Ok then..if you say so.

Yes, maybe later they will discover other evidence(s)...conspiracy...other employees helped him..and so on...I didn't say it was not possible.

Unless you bring some other evidence(s) to debunk my claim, we have nothing further to debate.

Wow, since when does Fox News or any other news source count as uncontrovertable evidence that controls were lax?

After working at a european bank and having my own deals combed through, where if I even have a missing w-9 for Patriot act purposes, or a missing audit sheet, I get my ass reamed by auditors and my deals aren't nearly as big as laying on multi-billion dollar trades.

Perhaps the French banking authorities suck, perhaps not. A lot of times these things aren't found out until late in the game, look at Jett, the HK guy, or even, more recently, Calyon's NY office which got hit by ~400MM in bad trades.

Overall, if you're smart, you can find ways to hide anything for a short while. Look at Enron, it only took a small amount of manipulation to hide a lot of stuff, including energy market manipualtion.

I don't have hard evidence that an intelligent guy with good understanding of MO/BO operations could hide trades in various accounts, using dummy entries to look like they were offset, and yes, perhaps not the most diligent controls, were in effect.

However, I do know people and systems and they are not infallable, regardless of how strong you think they are. Otherwise people wouldn't get away with social engineering or other scams.

Ok, Mr. Wall Street..since Foxnews and other news sources are not good enough for you....

Ladies and gentlemen of the jury...allow me to show you the evidences from the Bibble of Wall Street people... the Wall Street Journal itself.

http://online.wsj.com/article/...357.html?mod=PageOne_1

".....Société Générale SA's $7.2 billion loss on a series of fraudulent trades is just the latest example of a breakdown in internal controls that are supposed to protect financial firms from disaster...."


http://online.wsj.com/article/...tml?mod=hpp_us_pageone

".....The loss exposes the latest breakdown of risk controls at a big international financial institution, along with U.S. banks that have hemorrhaged billions of dollars since the crisis in subprime mortgages developed last summer. ...."

http://online.wsj.com/article/...779.html?mod=PageOne_1

".....European markets boomed yesterday as many investors shrugged off the French bank's announcement. But experts on regulation -- and some policy makers -- saw the fraud as a troubling signal that regulators may have ceded too much responsibility for risk management to banks.

"The losses are too big, and I don't understand why there wouldn't be systems in place that would catch this," said Chris Rexworthy......"

 

[LegendKiller]

Originally posted by: Svnla
More gibberish

I don't think you get it.

It doesn't matter how much internal control you can have, people CAN and DO find a way to get around them.

It's akin to the RIAA or MPAA pushing DRM. Sure, Blu-Ray is great and all and it's "unhackable", but so is every other system out there that's designed to be flexible, that is, until you know how to get around it. For ever 5 consultants, or regulators, or auditors you have out there, there's going to be hundreds of bright people that can get around the system.

This is going to be an immensely complex situation to understand, because getting around these controls is complex. Simply saying that their controls are lax is nothing more than jumping to conclusions, innuendo, and pure media hype. Once you take a look at all of these situations in depth, it's pretty easy to figure out that it wasn't easy to enact the plans.

How does one layer on 50-70bn in trades? We're about to find out.

 

[Svnla]

Originally posted by: LegendKiller
blah..blah..blah..blah..blahblah...some big words and theories..blah..blahblah

Ok now it is gibberish?..even it is from the WSJ itsefl? LOL....just what I thought..first, Foxnews and other news sources were not good enough .....now all you have to debunk my point of view are your pure speculation and assumption.

You were the one that quote my very first post in this thread and I show you many times the evidences (as of the presence time) about my pov as auditor.

YES, NOTHING CAN STOP a crook from being a crook (Enron, WorldComm, Barings,etc.) but those were high level executies (CEO, CFO, General Managers, etc). This is about a low level employee/trader. How the heck he was able to do all that damage without anyone knows about it FOR OVER A YEAR (late 2006 and all of 2007)? It is like a first class private was able to launch nuclear missles to destroy another country....yeah...I hear that was very complex and hard to understand...yeah..that must be it. :roll:

 

[LegendKiller]

Originally posted by: Svnla

Originally posted by: LegendKiller
blah..blah..blah..blah..blahblah...some big words and theories..blah..blahblah

Ok now it is gibberish?..even it is from the WSJ itsefl? LOL....just what I thought..first, Foxnews and other news sources were not good enough .....now all you have to debunk my point of view are your pure speculation and assumption.

You were the one that quote my very first post in this thread and I show you many times the evidences (as of the presence time) about my pov as auditor.

YES, NOTHING CAN STOP a crook from being a crook (Enron, WorldComm, Barings,etc.) but those were high level executies (CEO, CFO, General Managers, etc). This is about a low level employee/trader. How the heck he was able to do all that damage without anyone knows about it FOR OVER A YEAR (late 2006 and all of 2007)? It is like a first class private was able to launch nuclear missles to destroy another country....yeah...I hear that was very complex and hard to understand...yeah..that must be it. :roll:

Is this an unknown thing? Was there not other traders who have done these exact same things under even more difficult standards?

OMG, A CFO/CEO CAN ONLY COMMIT LARGE FRAUD!

Please, even the most "low" employee has the ability to embezzle or defraud if the knowledge of the system exists.

Nice attempt at hyperbole though re: nuke.

 

[Nerva]

Originally posted by: LegendKiller

Originally posted by: Svnla

Originally posted by: LegendKiller
blah..blah..blah..blah..blahblah...some big words and theories..blah..blahblah

Ok now it is gibberish?..even it is from the WSJ itsefl? LOL....just what I thought..first, Foxnews and other news sources were not good enough .....now all you have to debunk my point of view are your pure speculation and assumption.

You were the one that quote my very first post in this thread and I show you many times the evidences (as of the presence time) about my pov as auditor.

YES, NOTHING CAN STOP a crook from being a crook (Enron, WorldComm, Barings,etc.) but those were high level executies (CEO, CFO, General Managers, etc). This is about a low level employee/trader. How the heck he was able to do all that damage without anyone knows about it FOR OVER A YEAR (late 2006 and all of 2007)? It is like a first class private was able to launch nuclear missles to destroy another country....yeah...I hear that was very complex and hard to understand...yeah..that must be it. :roll:

Is this an unknown thing? Was there not other traders who have done these exact same things under even more difficult standards?

OMG, A CFO/CEO CAN ONLY COMMIT LARGE FRAUD!

Please, even the most "low" employee has the ability to embezzle or defraud if the knowledge of the system exists.

Nice attempt at hyperbole though re: nuke.

i know one of db's interest derivatives desk has a "do not fucking touch" account, it's basically money that the traders can't account for, so they just dump it all in there...so all you people talking about internal control not catching, you can all shove it. internal control regulations will forever play catch up to people with certain ingenuities.

 

[Queasy]

Heh

FRENCH TRADER WAS FORCED TO WORK 30 HOURS A WEEK

FRIENDS of rogue trader Jerome Kerviel last night blamed his $7 billion losses on unbearable levels of stress brought on by a punishing 30 hour week.

Kerviel was known to start work as early as nine in the morning and still be at his desk at five or even five-thirty, often with just an hour and a half for lunch.

One colleague said: "He was, how you say, une workaholique. I have a family and a mistress so I would leave the office at around 2pm at the latest, if I wasn't on strike.

"But Jerome was tied to that desk. One day I came back to the office at 3pm because I had forgotten my stupid little hat, and there he was, fast asleep on the photocopier.

"At first I assumed he had been having sex with it, but then I remembered he'd been working for almost six hours."

As the losses mounted, Kerviel tried to conceal his bad trades by covering them with an intense red wine sauce, later switching to delicate pastry horns.

At one point he managed to dispose of dozens of transactions by hiding them inside vol-au-vent cases and staging a fake reception.

Last night a spokesman for Sócíété Générálé denied that Kerviel was overworked, insisting he lost the money after betting that the French were about to stop being rude, lazy, arrogant bastards.

 

[Svnla]

One last time (hopefully):

http://online.wsj.com/article/...tml?mod=hpp_us_pageone

"......Early details, including accounts from executives at the French bank, paint a picture of an ordinary trader who used extraordinary means to game the bank's own system and hide massive unauthorized trades ....."

"....Mr. Kerviel is no trading legend who let a transaction get out of hand. He was a low-level trader......Its evident failure of risk assessment may raise fresh questions about how well banks globally are set up to monitor the market dangers that the U.S. mortgage-market downturn has exposed. The mortgage mess has made clear that many risk systems weren't properly set up....."

http://www.nytimes.com/2008/01...9ec7494f1d8&ei=5087%0A

"......I find it hard to believe the risk management systems and all the auditors did not indicate anything at any level,? said Hélyette Geman, a professor of mathematical finance at ESSEC, a leading French business school, as well as professor at the University of London...."

"......there was widespread incredulity that a junior employee like Mr. Kerviel could have racked up such huge losses without the knowledge of his superiors........A senior banker at Société Générale described Mr. Kerviel ?as a very junior trader, not a star......"

Here for the IT folks:

http://www.informationweek.com...ml?articleID=205918671

"....Kerviel, a finance major, more computer-literate than many of his colleagues, they would hardly equip him for the kind of black hat hacking that would ordinarily be associated with a campaign of illicit, electronic trading that went undetected for months.
Kerviel's lack of advanced IT skills raises a pair of troubling possibilities. One is that Societe Generale's security systems were outdated or not properly maintained....."


As of 4 p.m. CST time, no one from this thread has show me any things to prove otherwise. Maybe I am old fashion but I belive in either put up or shut the hell up. Talk is cheap and BS on the forum without any links/evidences to support your POV is even cheaper.

Hummm, let see, shall we listen to Wall Street Journal and New York Times or shall we listen to someone from ATOT that claims to work in Wall Street?

I will take WSJ and NYT for US10 billions please Alex

 

[LegendKiller]

Originally posted by: Svnla
More quoted crap

ROFL, "claims" to? Ok sparky, go back to your tick and tie bullcrap while people work this out. As far as your "claims", you're doing nothing but reactionary sensationalistic media bullshit where anybody and everybody who wants to be interviewed will prognosticate as to what they think happened.Only the official story will do, until that time you don't know dick about what happened, nor does WSJ.

3cho "claims" to work on WS too and he backs me up. In fact, I know he does work on WS, since I have seen his resume. He knows I work on WS since we have discussed it many times.

I don't give a flying fluck through a rolling donut about some blowhard auditor who thinks they know everything. I have gone through collateral audits, offering memorandum audits, I have had 3 years of my work audited over 6 months so they could be released to the market through an OM on the 144a securitization market.

When it comes down to it, NONE of the audits could have caught things I wouldn't want them to catch. Does that mean the 2 companies I worked for on the issuer side had poor controls or audits? No, it meant I knew how to game the system if I wanted to and it would have taken a lot for them to catch it. More or less they would have had to taken collateral tapes from a vault in the side of a mountain and compare them to my work, spending tens of thousands to do so.

Now, this could be a simple case of lax controls. It could be a case of a guy gaming a system which he knew fricking well. It could be a case of a massive conspiracy. It even could be the case of SocGen sweeping crap under the auspices of this problem to take a big-bath.

The simple fact of the matter is *YOU DONT KNOW*. You don't work on WS, you probably have never seen a trading desk in your life, and even if you did you wouldn't know how the hell a trading book works or how people can book trades. I do, I have seen it, and so has 3cho.

If you want "proof" I work here, why don't you stop in midtown manhattan sometime and I'll take you out for a drink. Either that or you can PM me, I'll send you my real name, you can google it and see I am registered for the ASF conference in Las Vegas starting Feb 3rd and that I work for a bank in NYC doing securitization underwriting and financing.

 

[Svnla]

Oh wow..mr wall street ...so now time to call name? You are such a big man....LOL....where did I say "know everything"?

You said Foxnews and other sources didn't count, so I brought in WSJ and NYT.

You quoted my first post in this thread and I showed what my research brings me. There is no where I ever said that I know or anyone know exactly what happend.

Wait...let me get that guy, his boss, and the CEO on the phone...and we all do conference call...I am sure all you wall street big shots know how to speak French....I will have to get a translator..

 

[LegendKiller]

Originally posted by: Svnla
Oh wow..mr wall street ...so now time to call name? You are such a big man....LOL....where did I say "know everything"?

You said Foxnews and other sources didn't count, so I brought in WSJ and NYT.

You quoted my first post in this thread and I showed what my research brings me. There is no where I ever said that I know or anyone know exactly what happend.

Wait...let me get that guy, his boss, and the CEO on the phone...and we all do conference call...I am sure all you wall street big shots know how to speak French....I will have to get a translator..

Then don't act like you know what happened. At this point the media is just trying to scamble for talking

Frankly, I don't think anybody really knows what's going on right now. SocGen kept this quiet for a couple days while trying to unwind stuff. I have heard they whacked the Back Office. I was going to call an MD I know at SocGen, but I figured he had enough crap to deal with right now.

I like how the OP put the accents in the name. At my previous employer I closed a deal with SocGen with that same MD, a big conduit warehouse facility. One of the other people I worked with was editing the transaction document and didn't put in the accents, which the SocGen lawyers corrected. My coworker, who was a bit awkward sometimes, made a joke about it, which the SocGen team didn't take too well...don't screw with the French and their names.

Also, interesting thing about SocGen was that my bank had actually discussed acquiring it last year, but didn't like the political climate in France.

Another funny thing is that SocGen was Risk Magazine's Risk Manager of 2007...lol


http://www.risk.co.uk/public/showPage.html?page=685494


S'ok sparky, once this thing dies down and perhaps a different truth comes out, we'll revisit this. Maybe you're right, maybe I am, I am just saying that we do not need to jump to conclusions. There's been enough of that in the last few years driven by the media, just have to look as far as Duke.

 

[rchiu]

Originally posted by: 3cho

Originally posted by: LegendKiller

Originally posted by: Svnla

Originally posted by: LegendKiller
blah..blah..blah..blah..blahblah...some big words and theories..blah..blahblah

Ok now it is gibberish?..even it is from the WSJ itsefl? LOL....just what I thought..first, Foxnews and other news sources were not good enough .....now all you have to debunk my point of view are your pure speculation and assumption.

You were the one that quote my very first post in this thread and I show you many times the evidences (as of the presence time) about my pov as auditor.

YES, NOTHING CAN STOP a crook from being a crook (Enron, WorldComm, Barings,etc.) but those were high level executies (CEO, CFO, General Managers, etc). This is about a low level employee/trader. How the heck he was able to do all that damage without anyone knows about it FOR OVER A YEAR (late 2006 and all of 2007)? It is like a first class private was able to launch nuclear missles to destroy another country....yeah...I hear that was very complex and hard to understand...yeah..that must be it. :roll:

Is this an unknown thing? Was there not other traders who have done these exact same things under even more difficult standards?

OMG, A CFO/CEO CAN ONLY COMMIT LARGE FRAUD!

Please, even the most "low" employee has the ability to embezzle or defraud if the knowledge of the system exists.

Nice attempt at hyperbole though re: nuke.

i know one of db's interest derivatives desk has a "do not fucking touch" account, it's basically money that the traders can't account for, so they just dump it all in there...so all you people talking about internal control not catching, you can all shove it. internal control regulations will forever play catch up to people with certain ingenuities.

While I agree that there is no way for internal control to stop all irregular trades, but come on, 2 years and $7.1 billion? I have hard time believing one person can cause that much damage over that long a period without being caught. There has to be more to the story or SoGen's audit process is completely f'ed up.

 

[Dessert Tears]

Originally posted by: 3cho
i know one of db's interest derivatives desk has a "do not fucking touch" account, it's basically money that the traders can't account for, so they just dump it all in there...so all you people talking about internal control not catching, you can all shove it. internal control regulations will forever play catch up to people with certain ingenuities.

I don't disagree with your overall point, as such an account would be noticed once its balance became large enough, but a "misc" or "dump" account is poor accounting. It should be reconciled against something.

 

[JS80]

Originally posted by: Queasy
Heh

FRENCH TRADER WAS FORCED TO WORK 30 HOURS A WEEK

FRIENDS of rogue trader Jerome Kerviel last night blamed his $7 billion losses on unbearable levels of stress brought on by a punishing 30 hour week.

Kerviel was known to start work as early as nine in the morning and still be at his desk at five or even five-thirty, often with just an hour and a half for lunch.

One colleague said: "He was, how you say, une workaholique. I have a family and a mistress so I would leave the office at around 2pm at the latest, if I wasn't on strike.

"But Jerome was tied to that desk. One day I came back to the office at 3pm because I had forgotten my stupid little hat, and there he was, fast asleep on the photocopier.

"At first I assumed he had been having sex with it, but then I remembered he'd been working for almost six hours."

As the losses mounted, Kerviel tried to conceal his bad trades by covering them with an intense red wine sauce, later switching to delicate pastry horns.

At one point he managed to dispose of dozens of transactions by hiding them inside vol-au-vent cases and staging a fake reception.

Last night a spokesman for Sócíété Générálé denied that Kerviel was overworked, insisting he lost the money after betting that the French were about to stop being rude, lazy, arrogant bastards.

ROFL BARF HAHA