Hey there,
I’m a graduate from JMSB (John Molson School of Business of Concordia University) and I’m looking forward to sharing my thoughts with you in this fast-growing blogosphere. Why do I want to be one of the millions of new bloggers this year, you ask? Because I find it important to invest myself (not only money) in projects that are dear to my heart. I have always had interest (heh) in the financial domain, a domain that has huge repercussions in today’s world.
On one hand, my educational background has prepared me for what I hope to be a prosperous finance career. One the other, I’ve taken the principles of good finance applied them to my personal finances. In addition to learning bits about the world of finance in general, you’ll read my tips for getting the most out of your money. The blog is the perfect medium for information with a personal touch, and that’s what I’d like to give.
A little more about me! Between my financial readings and stock market hours, I indulge in both hockey and poker, which is, of course, a game based on the skilful evaluation of financial risk!
I hope you enjoy the blog – I look forward to hear from you.
Eric
French Bank Leader Implicated in 7.2 Billion Finance Fraud
Published by eric on January 28th, 2008 in Finance NewsAs you may have read over the past few days, Jerome Kiervel, a front trader agent employed by the Societe Generale (one of the biggest French Banks) is the only one implicated in the biggest finance fraud ever in Europe (7.2 Billion).
Do you really think that only one man is responsible? Are you sure that Societe Generale management, led by its CEO, Daniel Bouton, didn’t have a clue about what was going on? According to the current economic situation, the Societe Generale has many advantages to consider. Here are the facts:
- Jerome Kiervel was one of the formers inspectors of the entries posted into the trade market system (back-office). His position was changed to front trader agent by his management few years ago. This decision was of course very risky… History has of course shown this to be true with Nick Leeson at Barings Bank who, in 1994, dragged it to bankruptcy.
- Societe Generale said it had learned of the fraud last weekend. But how can’t you notice a 7.2 billion fraud with massive holdings representing more than 60 billion??? No agent trader can work alone without being covered by back control agents or management board.
- Last weekend… What a coincidence! Just before the subprime mortgages crisis! The bank was forced to sell the contracts just as stock markets were dropping. It took the bank three days to unload them. It was in the Societe Generale’s best interests to unhinge the market. After all, for several months, there were rumors in financial circles about a potential buyout from HSBC - which is now, effectively, a hostile takeover!
As an extra note, the bank had actually earned more than 1 billion last year thanks to the trader agent illegal positions. Nice! Read the mainstream news details of the current situation here.