Blade Watch

http://money.cnn.com/2008/04/17/news/international/SocGen_ceo_stepsdown.fortune/?postversion=2008041716

PARIS (Fortune) — Daniel Bouton will step down as chief executive of Société Générale in May, although he’ll stay on as chairman, the French bank announced Thursday. Bouton, 58, is taking the fall for the bank’s failings in the rogue trading affair involving Jérôme Kerviel, a junior stock arbitrager who ultimately cost the bank $7.5 billion in net losses.

The bank’s announcement came just days after FORTUNE revealed that Bouton had decided not to mention anything about Kerviel or the gargantuan $75 billion open position he had taken in stock index derivatives at a board meeting on Jan. 20, the day he found out about the size of the position. It was only three days later, after the bank had liquidated that position and put in place an $8.5 billion capital increase, that Bouton called an emergency board meeting and disclosed what had happened.

Bouton’s silence was apparently motivated by concern about word leaking. But it’s surprising not just because the bank itself was severely threatened by the crisis – Kerviel’s position was almost double the bank’s equity – but also because the CEO himself is an authority in France on corporate governance. In 2002, he wrote an official report following the Enron scandal that urged French boards to be more transparent and play a larger role in decision-making, especially in tough times.

An interesting article talking about developments at Societe Generale, do check it out.

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