|
Hunt for rogue trader who
cost bank £3.7 BILLION in world's biggest fraud
UK
Daily Mail
Thursday January 24, 2008
An "irrational" rogue trader has committed
a massive 4.9 billion Euro (£3.7 billion) fraud at giant
French bank Société Générale, it emerged
today.
Bank CEO Daniel Bouton admitted this morning he did
not know where the trader was.
Société Générale said the trader
had confessed to the "exceptional fraud" - possibly
the biggest in history by an individual trader, and which involved
unusually high trading positions. It is expected that he will
face criminal prosecution charges.
The trader was "totally irrational" and may not have
directly benefited from his dishonest dealings, the bank's chief
executive said today.
(Article continues below)
CEO Daniel Bouton said the fraud was uncovered after the crisis
on world markets late last week, as the trader rushed to close
fraudulent positions.
The losses are so bad the bank is scrambling to raise 5.5 billion
Euro in emergency capital to cover them and further subprime-related
losses.
The bank is one of the largest European investment banks in London
employing 2800 in the UK. Of these, 1500 are based at its investment
banking headquarters in Tower Hill. Its fund management arm, SocGen
Asset Management, used to be run by "superwoman" Nicola
Horlick.
Bankers worldwide expressed astonishment that a single trader
could have concealed such enormous losses. Some suggested SocGen's
sudden closing of the positions on Monday was a major factor in
forcing the US Fed to slash interest rates the following day.
Lehman Brothers CEO and Chairman Richard Fuld called it "everyone's
worst nightmare" in a comment from the World Economic Forum
in Davos, Switzerland.
"The most serious thing is that this puts into doubt the
risk management systems at some banks," said Fortis analyst
Carlos Garcia.
"You can't suddenly announce this from one day to the next
a hit of $7 billion. In the light of this what we've done is to
downgrade banks that are very linked to trading income or whose
capital base is weak."
The bank said it discovered last weekend that the single trader
in Paris had secretly been setting up huge positions - far beyond
his authorised limits - betting on stock-market indices across
Europe.
The timing could not have been worse: global markets went in
to a spiral on Monday, just hours after the discovery was made,
as virtually every European market fell by 7 per cent or more
and a worldwide recession looms.
Full
article here.
|
INFOWARS:
BECAUSE THERE'S A WAR ON FOR YOUR MIND
|
|
