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...global markets from Bombay to Wall Street were tanking, few investors had ever heard the name Jér?me Kerviel. Why would they? The 31-year-old from small-town Brittany in France was a low-level futures trader. One week later, Kerviel - the rogue trader who has lost Société Générale $7.1 billion) - now has 347,000 hits on Google, 14 groups dedicated to him on Facebook, and a Wikipedia biography - and the mounting political scandal over how he pulled off the biggest scam in banking history is only just beginning...
...coming days: A bruising reckoning with top government officials. Bank of France governor Christian Noyer has been summoned to appear at a Wednesday crisis hearing in the Senate. And officials for President Nicolas Sarkozy were quoted in French and British newspapers saying that the French leader was enraged that Société Générale executives had waited at least three days before telling him that they'd uncovered the giant fraud. Sarkozy had good reason for unhappiness. When the scandal broke late on Wednesday night he was in New Delhi signing business deals with Indian officials...
...Days before, Société Générale executives had discovered Kerviel's massive illicit operation, after the trader had gambled positions worth about $73 billion. That's actually more than the bank's entire worth by around $25 billion. Instantly, this evoked comparisons in the media with another lone rogue, Nick Leeson, whose fictitious trades in Singapore lost $1.4 billion for Barings Bank in 1995, wiping out the bank's cash reserves. Leeson was arrested after an international manhunt, and spent more than three years in a Singapore jail. By contrast, Soci...
...Société Générale's head of corporate and investment banking Jean-Pierre Mustier admitted to reporters on Sunday that their forced sell-off had probably furthered last week's market slump. "I cannot deny that if we had not been selling the market would have fallen less," he said, though he said he thought its effect had been "minimal." With the markets in turmoil, the dark-haired, slim trader slipped out of sight, surrendering to financial police only on Saturday afternoon. Kerviel remains in custody in Paris but so far faces no criminal charges...
Judging by Leeson's experience, Société Générale's rogue trader might some day land another career. Leeson is now manager of the Galway United soccer team in Ireland, and was portrayed by Ewan McGregor in the 1999 movie Rogue Trader, the film version of his autobiography. He has written a further book entitled Back from the Brink: Coping with Stress. That sounds like perfect bedtime reading this week for Société Générale executives...