Forbes: Portrait Of The Fraudster As A Young Man

[ursi]

unbelievable ...why did he do it if not for personal gain?


LONDON - Not much is known about the alleged rogue trader at French bank Societe Generale, who has apparently left the firm after building up over $7.2 billion in losses over the past year. But if past precedent is anything to go by, his ego and his wallet were the two main factors pushing him to try and beat the market.

Societe Generale offered scant detail on Thursday as to the identity of the futures trader, who could be responsible for one of history's biggest banking frauds. The bank's chairman, Daniel Bouton, told the press that the Paris-based trader was "in his 30," and Societe Generale confirmed that he earned less than 100,000 euros ($147,164) a year and had been with the company since 2000.

The bank declined to comment on press reports that named the trader as 31-year-old banker Jerome Kerviel.

Another revelation from the press conference was that Jean-Pierre Mustier, head of Societe Generale's investment banking operations, did not think the trader sought personal gain from the fraud.

more...

http://www.forbes.com/2008/01/24/societe-generale-trader-face-cx_ll_0124autofacescan01.html

[thunder rising]

1. If a black robbed a 7/11 they would name him. The rules sure are different given you're wealthy.

[Lucky Luciano]

2. I doubt he did it for personal gain also

It is not like he could go to the bank, had his trades worked out, and say, "Hey look I made you $6B with these secret trades I put on. Now pay me my big 10% bonus!"

No...the bank would take the money and promptly fire his ass and try to have him taken to jail because they know what could have happened....and banks only pay the big bonuses to people they feel can replicate their past successes...and they would know that if he had been right, it would have been dumb luck that could not be replicated.

...and to the poster above, he was not wealthy. He never made over 100K Euros. Probably a very ordinary middle class guy in Paris. He did, afterall, start his career in the back and middle offices - those guys work longer hours than the traders, but get paid less...and many traders are not stars and they earn about $100 to $150K...but they all want to be the stars just like wannabe actors want to be as big as Will Smith or Brad Pitt.

...and so, since he knew he would not receive a big payout in the event of a successful scheme, it is very likely that he did it for the thrill of doing it.

[gravity]

3. He probably just kept on doubling down to make back his losses

Using the bank's leverage until it got out of hand.

[ursi]

4. here's some telling insight to this

snip...


Societe Generale said it discovered the fraud last weekend and unwound the trader's losing bets starting Monday, when world markets tumbled.

Some experts have suggested Societe Generale may have exacerbated the fall and indirectly led to the U.S. Federal Reserve's subsequent decision to cut rates.

In an interview published Saturday, Societe Generale's chief executive, Daniel Bouton, dismissed as "absurd" the notion that the bank's actions helped fuel the turmoil on world markets.

Bouton said Kerviel had been betting throughout 2007 that markets would fall - a winning position. But the trader had overstepped his authority and was wagering much more money than he should have, Bouton said.

So at the beginning of January, Bouton said, the trader voluntarily created losing positions, to neutralize his earlier gains and cover his tracks.

But this month's quickly dropping markets turned "this sad affair ... into a Greek tragedy: His virtual losing position became huge," Bouton was quoted by Le Figaro as saying.

Despite the bank's losses, which Bouton called "enormous and abnormal," he insisted Societe Generale's viability was not at risk.

Experts and others, including France's prime minister, have questioned whether a single futures trader could have managed such large sums. Some have suggested Societe Generale might have used Kerviel as a scapegoat for other losses, like those related to the subprime crisis.

The bank says the scale of the damage was so great only because of the bad timing of the discovery - right before the worst day in world markets since Sept. 11, 2001. It also fired Kerviel's supervisors.

more...

http://hosted.ap.org/dynamic/stories/F/FRANCE_BANK_FRAUD?SITE=NVLAS&SECTION=HOME&TEMPLATE=DEFAULT