Loans and Finance

Loans and Finance

Text

News and information about loans, money, debt, finance and business issues.

Tuesday, January 29, 2008

The Euro5BN Man Hits Back

Jerome Kerviel, known as the Euro5BN Man, who is alleged to be behind the Euro5BN loss at Societe Generale has claimed that many of his colleagues were also guilty of fraud.

He admitted to prosecutors that he breached legislation, but said that he was not the only worker at the bank to flout the law.

His lawyers claim that he had "committed no dishonest act", and had been made a scapegoat by the bank.

Co-workers, including security checkers and managers, have been implicated in the futures trader's dealings.

Prosecutor Jean-Claude Marin said:

"There were other traders who had acted in a similar way by exceeding their trading limits."

Many are sceptical of SocGen's version fo events, and their haste to blame one person.

Matt McKeith, head of equity dealing at First State Investments in Hong Kong, said:

"I think most people are just astonished that someone could get away with that kind of trade for so long without being noticed.

I'd always be slightly suspicious of the company line in these circumstances
."

It transpires that SocGen was warned as early as November by Eurex, the derivatives exchange, about the positions being taken by Kerviel. However, they chose to do nothing about it after Kerviel produced a fake document to demonstrate that his risk had been covered by hedging.

Further problems are now coming out of the woodwork for SocGen. It is now facing legal action from shareholders claiming that the bank is involved in insider dealing. Seemingly a non-executive director (Robert Day) sold off nearly Euro100M worth of SocGen shares, eight days before the discovery of "irregular trades".

SocGen's version of events are now seriously in doubt, as is their competence and credibility.

Banks cannot afford to lose confidence or credibility.

No comments:

Post a Comment