Paris (France) / Frankfurt am Main (Germany ), 30.01.2008 - The French bank Société Générale has business on 24 January 2008 billion loss announced. A majority said to have been caused by the 31-year-old Jerome Kerviel, a relatively new member of the team for arbitrage on European equities. Is said to have caused the company to unauthorized futures on European share indices EURO STOXX, DAX and FTSE a speculation loss of 4.9 billion € in Neuilly-sur-Seine (Hauts-de-Seine) resident merchants. It would thus be the biggest loss by a single trader in banking history.
On 27 January 2008, Société Générale, a statement of arbitrage, as was Jérôme Kerviel possible, his business to hide from the risks, as the bank closed out the business has and what measures were taken [1]. Meanwhile, the lawyers made Kerviel Kerviel's position and business perspective [2]. Similarly, there are already blog sites on the Internet that are directed against the media execution of Kerviel. [3].
approach
Kerviel work in the "Delta One team of Société Générale had to buy so-called futures on European stock indices and to ensure them with so-called hedges. Hedges are trades in the opposite direction. The differences in the equivalent positions are very small and there are limited in time. Since the profit on the one Page is accompanied by losses on the other, must use a lot of capital to earn money with such arbitrations. If the other positions are correct, but the risk is fairly limited.
If no contrary position is established, there is also no loss of it, which reduces the profit, if one is correct. Kerviel did so last year profit EUR 50 million and hoped for a bonus of 300,000 euros. Beginning this year, he increased his efforts and was on 18 January 30 billion euro bet that the EURO STOXX increase, 18 billion euros on a rising Dax and two billion euros on a rising FTSE. The bet on falling prices existed a sham. It is believed that Kerviel has given a fraudulent e-mails, faxes, and a ticket and to have sold over the counter the counter contracts to big business partners. These off-exchange transactions are settled each day and have allowed Kerviel to cancel it before the end and replaced by a new one. Only when accidentally a credit limit of the German bank has been exceeded, fell to such a sham transaction. Since the dealer previously worked in the control department of the company, he had the necessary knowledge and contacts in order to know the bank's internal control mechanisms [4] [1] [5] [6] [7].
Speaking to Reuters said a number of floor traders, the fraud would have been possible only thanks to the large gaps in risk management of the bank. When comparing the accounts with the accounts at month-end transactions such notice would normally have. The first results of the investigation confirm that other dealers have acted similarly, though not to this extent [6] [7].
impact on the bank and the economy
The "SocGen" stated that it would post losses in 2007. Together with the coming of the subprime crisis, depreciation of 2.05 billion euros, would the return for in 2007 to only 600 to 800 million € diminish. Both the dealer as his boss would leave the bank. Also Reserve Chairman Daniel Bouton offered before the 24th January 2008 offered to resign. This was however rejected by the Board of the Bank.
Because of speculation is believed that due to poor risk management at Société Générale and the board of the bank for at least a part of the damage personally liable. The responsible board would organize its internal area in a manner that the stepping over an individual employee would not have been such a big loss could allow. The prosecution in France in the course of their investigation in the process to reconstruct the actual course of events.
The Financial Times says an executive from a rival bank that Kerviel had lost only 1.5 billion euros and a loss of 3.4 billion euros by the management of SocGen was caused by them would have closed out the positions hastily [4] . According to these positions Kerviel's lawyers late 2007 with 1.4 billion euros were in positive territory. Kerviel, intended to close out the first half of 2008. Since the positions were long-term, Kerviel is of the opinion that the sales were prematurely [2].
has been speculation in stock market circles as to whether this Incident for the slump in European markets on Monday was partly responsible. To avoid further losses, had to Société Générale, therefore these risky positions to sell to a considerable extent on the international stock exchanges. She noticed it to exceed eight percent of the traded volume not [1].
The SocGen has indicated in its statement of the exact percentages caused by their trading volume. If you take the total turnover on the stock exchanges, there are about 90,000 contracts and DAX Euro Stoxx nearly 800,000 contracts, which were sold in three days. To maintain this number of contracts that SocGen would have about 4.9 billion euros have deposited to margin deposit. There are divided views on whether such an amount would have been obvious, especially considering the size of the derivatives business at Société Générale [1] [8] [9] [7].
Legal consequences
Kerviel has met on Saturday to 2 clock police and has been heard. Jean-Claude Marin of the Paris public prosecutor said on Monday the 28th January that Kerviel had begun in 2005 with unauthorized transactions. In November 2007, the derivatives exchange Eurex has alerted SocGen to Kerviel's positions. His business triggered alarms in different department of the Bank from. By the (fictional) Vs the result was always the same: not too much risk. Marin also emphasized that the transactions were not embezzlement, but were intended to get more income from the bank. Kerviel of fraud would be found guilty could be fined from 750,000 € and up to seven years in prison mean [6] [10]. Jérôme Kerviel
denies any intention of enrichment and says he has only worked for the bank. The lawyers also say that the bank would only detract from their much bigger losses from other transactions [2]. Kerviel was according to his lawyers Elisabeth Meyer and Christian Charriere-Bournazel on Monday evening released, but had to give up his passport. There was an investigation for breach of trust, forgery and use of forgery and invasion launched in information systems. The examining magistrate Renaud van Ryumbecke and Francoise Desset, however, rejected Jean-Claude Marin's attempt Kerviel pursue because of the heavier offense "attempted fraud" because he was employed for this type of business and was made all the profit or loss on account of the bank. He may, until completion of the procedure can not communicate with employees of Societe General, and not in the financial industry to work [11] [10] [12].
On 24 January, der Anwalt Frederik-Karel Canoy im Namen von etwa 100 SocGen Aktionären und Mitgliedern der Kleinaktionärsvereinigung „Association des petits porteurs actifs“ (Appac) ein Gerichtsverfahren gegen Unbekannt wegen „diffusion de fausses informations ou trompeuses ayant agi sur le cours de Bourse des titres“' (etwa: Verbreitung von Falschinformationen) eingeleitet. Am 28. Januar hat Canoy noch ein zweites Gerichtsverfahren wegen „manipulation de cours et délit d'initié“ (Insiderhandel und Manipulation des Aktienkurses) gegen unbekannt eingeleitet. Das Verfahren richtet sich gegen das Verwaltungsratsmitglied Robert A. Day, die Robert-A.-Day-Stiftung und die Kelly-Day-Stiftung. Laut der französischen Finanzmarktaufsicht AMF Day in the weeks before 18 January SocGen shares for EUR 140 million sold. A spokesman for Day denied that Day knew in advance of additional write-downs from the subprime crisis and Kerviel's trading activities. The SocGen has denied that Day knew at the time of the share sale of Kerviel's losses certificate, and stressed that they were in for the Executive Committee members proposed commercial period. As approved by board members is that they know better and earlier, so insiders, they may, according to bank regulations for some time, not before the publication of the figures trade securities for their own company [12] [10] [13] [14] . + Wikinews +
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