Societe Generale

http://www.businessweek.com/ap/financialnews/D8VCLPFG0.htm

French judges questioned Societe Generale trader Jerome Kerviel alongside his former bosses on Thursday about the massive trading losses the bank blames on him, judicial officials said.

Another trader who had worked with Kerviel was released without charge Thursday after being questioned. The employee of the cash equities desk of SG Securities, the branch of SocGen where Kerviel had worked, was detained Wednesday during a search of the bank’s offices.

Two investigating judges are trying to determine what, if anything, Kerviel’s colleagues and superiors knew about his unauthorized trades, which the bank says cost it more than $7 billion.

There have been developments in the Soc Gen activities, in the meantime business continues at Soc Gen. Do check it out.

http://www.bloomberg.com/apps/news?pid=20601213&sid=apV5PCLO.MZI&refer=home

Feb. 29 (Bloomberg) — Societe Generale SA, stung by a 4.9 billion-euro ($7.5 billion) loss on errant trades, gained in Paris trading as Lehman Brothers Holdings Inc. raised the shares to “overweight,” citing speculation that BNP Paribas SA may bid for the bank.

BNP, France’s largest bank, may be able to pay 83 euros a share in stock for its smaller Paris-based rival, Lehman analysts led by Cyril Meilland in London wrote in a note to clients today.

“Societe Generale might remain independent, but speculation of a bid will likely support the share price,” the analysts wrote. “Poor expected first-quarter and second-quarter earnings publications are likely to be viewed as a catalyst for a bid.”

BNP Paribas spokeswoman Christelle Maldague and Societe Generale spokeswoman Helene Agabriel declined to comment. Finance Minister Christine Lagarde, traveling in South Africa with French President Nicolas Sarkozy, declined to comment on the speculation.

An interesting article about Societe Generale. Regardless of speculation, business at Societe Generale continues. We’ll have to wait and see what happens in the near future. Regardless the news of the events at Societe Generale will have affects in all the big banks in the IT Security and compliance areas, as banks look to limit any potential liabilities external or internal.

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article3352795.ece

Société Générale has sought to guarantee the success of its €5.5 billion (£4.1 billion) rights issue by pricing the new shares at a hefty 39 per cent discount to the current price.

The French bank is raising cash to plug the hole in its finances left by the biggest rogue trader scandal in history. In a move that suggested that it had little confidence in its ability to attract investors on normal terms, it said that it would issue 116.6million new shares priced at €47.5, compared with a closing price of €77.72 on Friday. The offer took the market by surprise, driving SocGen’s shares down 4 per cent to close at €74.59 in Paris.

Analysts had expected a discount of 20 to 30 per cent. Many said that Daniel Bouton, the bank’s embattled chairman, risked upsetting SocGen’s existing investors, whose stakes will be diluted by the issue of one new share for every four existing shares.

The analysis of events past and present at Societe Generale continue. In the meantime, it’s announcing a new rights issue, and has some updates regarding the issues resulting from the reported losses.

http://www.ft.com/cms/s/517a5fe2-d4f3-11dc-9af1-0000779fd2ac,dwp_uuid=e8477cc4-c820-11db-b0dc-000b5df10621.html

The US Securities and Exchange Commission is looking at whether Société Générale violated US securities laws as it unwound and revealed its €4.9bn loss from Jérôme Kerviel’s allegedly rogue derivatives trades, the Financial Times has learnt.

The inquiry is at an early stage and the Washington agency might end up concluding that the issues involved are best handled by French authorities because the problems are only tangentially related to the US, people familiar with the matter said.

News of the probe is another blow to SocGen’s capital-raising plans. The bank’s board met last night to decide the timing and terms of its emergency €5.5bn capital increase, which could be launched as early as tomorrow. It is understood that when the capital increase is complete, Daniel Bouton, chairman, could decide to step down, according to people close to the situation. “The subject is no longer taboo,” one said.

Check out this article in the FT talking about speculation about how the US Securities and Exchange Commission will react to the reported losses at Societe Generale, an interesting read.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/01/31/bcnbnp131.xml

BNP Paribas has confirmed that it is considering a bid for Société Générale, the rival French bank hit by a £3.7bn trading scandal.

A BNP Paribas spokesman told Reuters: “We are studying it because all of Europe’s banks are studying it.”

The comments helped push Soc Gen’s shares up 1.5pc to €83 by mid afternoon.

The French government has warned off foreign or hostile predators, meaning any tie-up must be all-French and agreed by both banks.

It is not the first time that speculation of a merger between the two French banks has mounted.

In 1999 BNP successfully bid for Paribas but failed in its takeover attempt for Soc Gen. Since then rumours of a merger have persisted.

Very interesting, reuters had some more information about this, it will be interesting to see how the deal develops, and if any other banks are interested in a deal with Soc Gen.