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What happened in the Societe Generale fraud?
I don't want to know why it could happen, or what the ramifications are. But what, exactly, did this trader do that was fraudulent? And why did he do it, if he didn't profit from it?
3 Answers
- 1 decade agoFavorite Answer
Jerome Kerviel was trading European stock index futures. While the news out is not specific, we know that he 'bet massively', was wrong and had 'knowledge of the control systems' from his earlier career.
It sounds like his technical know how allowed him to override Societe Generale's risk management mechanisms to take such big (losing) positions in the futures market.
- Anonymous1 decade ago
Recent reports are suggesting that he was placing fake trades on the system to balance out his real trades. He may also have been setting up fake client accounts like leeson. Given the margin requirement that a $60bn position would require, he may also have been using client money to post margin, which would be serious fraud.
- Anonymous1 decade ago
One reason, presumably was to increase his standing or his bonus.
The fraudulent bit was probably trading more than his allowable limit and the covering it up. Also inventing fictitious accounts
