A rogue trader at the Société Générale, one of France’s respected banks, lost over $7 billion (!) on bad bets. Why did it take the bank so long to uncover the fraud? According to the NY Times:
A French bank announced Thursday that it had lost $7.2 billion, not because of complex subprime loans, but the old-fashioned way — because a 31-year-old rogue trader made bad bets on stocks and then, in trying to cover up those losses, dug himself deeper into a hole.
Société Générale, one of France’s largest and most respected banks, said an unassuming midlevel employee who made about 100,000 euros ($147,000) a year — identified by others as Jérôme Kerviel — managed to evade multiple layers of computer controls and audits for as long as a year, stacking up 4.9 billion euros in losses for the bank...
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