Societe Generale

http://www.bloomberg.com/apps/news?pid=20601087&sid=aAp37s1btaVI&refer=home

May 26 (Bloomberg) — Societe Generale SA’s report on how Jerome Kerviel evaded the bank’s controls to amass 50 billion euros ($79 billion) in unauthorized bets on stock-index futures backs up what he’s told authorities, his lawyer said.

“It validates what Jerome has said,” Guillaume Selnet, Kerviel’s defense lawyer, said yesterday in a telephone interview. “The only possible explanation is negligence, individual and systemic negligence.”

The report, commissioned by the Paris-based bank after it announced a record 4.9-billion-euro loss in January from unwinding Kerviel’s positions, faulted supervisors for not reacting appropriately to several “alert signals.” They missed at least 1,071 bogus trades used to disguise the risk of the positions and reduce the level of scrutiny internal controllers would apply, the report released on May 23 said.

Kerviel, 31, is under criminal investigation on charges of breach of trust, falsifying documents and hacking the bank’s computers to execute and conceal trades. If convicted, he faces as much as five years in prison and 375,000 euros in fines.

This article contains some commentary and updates regarding the report that was released into the losses at Societe Generale.

Ensuring that you have the right compliance and risk processes in place, that they are followed, and that there is an audit trail in place is something that I suspect is an industry wide issue. An issue which will need to be looked at by individual businesses, their regulators and shareholders, how this affects your business will depend on a number of factors, do check out the article.

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.

http://www.businessweek.com/ap/financialnews/D8VUB7T03.htm

The head of French bank Societe Generale SA said lessons learned from the trader who the bank says cost it more than $7 billion in losses on unauthorized trades are helping strengthen security in the global banking community.

Speaking to members of parliament in his capacity as president of the French Banking Federation, Daniel Bouton said Societe Generale and a number of its competitors are strengthening control systems in the wake of the scandal.

An interesting article talking about what has been learned as a result of the issues reported at Societe Generale - I suspect similar such issues have been noticed and implemented at other banks, as they check to ensure that the right practices and processes are in place to limit loss or liability. Do check it out.

http://www.reuters.com/article/bankingFinancial/idUSL0985287320080409

PARIS (Reuters) - French bank Societe Generale (SOGN.PA: Quote, Profile, Research) is tightening its controls after a rogue-trading scandal that cost it 4.9 billion euros ($7.73 billion), but its chairman said on Wednesday banks remained vulnerable to fraud.

“Fraud has existed in the banking industry since its birth. There have been several fraud cases, and there will be others,” Daniel Bouton told a parliamentary committee investigating the financial crisis that has engulfed the global banking sector.

Business at Soc Gen continues, this article provides an update relating to the reported trading activities that the bank declared several months ago. It mentions that Soc Gen is tightening it’s controls, I suspect that this is something that all the banks are doing to limit liability and ensure compliance regulations.

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article3567323.ece

Société Générale faces fresh embarrassment amid claims by Jérôme Kerviel, the rogue trader who lost €4.9 billion, that colleagues watched as he made unauthorised bets on European stock markets.

Mr Kerviel said he used his manager’s computer to take positions of up to €600 million on occasions.

His manager was present and looking over his shoulder as he did so, the trader told Renaud van Ruymbeke and Francoise Desset, the magistrates leading the inquiry

Mr Kerviel’s comments appear to fly in the face of SocGen’s claims that he was a machiavellian genius who hid his activities from other staff.

An article which is talking about reports/claims relating to the activities in Societe Generale.