View more on these topics

Societe Generale loses £3.7bn due to fraudulent trader

French bank Societe Generale has uncovered a Paris-based trader who it says committed a fraud resulting in a loss of £3.7bn, according to reports.

It said the trader confessed and has been dismissed, and his managers have left the company.

The bank also announced a loss of £1.5bn following the US sub-prime mortgage crisis, but says it will still make a profit of up to £600m for 2007.

Trading in the bank’s shares has been suspended, following a drop of nearly 50 per cent in the past six months. The bank will need to seek £4.1bn in new capital to offset the losses.

It is expected to announce its full year results on February 21.

Societe Generale released a statement confirming the fraud, which says: “One trader responsible for plain vanilla futures hedging on European equity market indices, had taken massive fraudulent directional positions in 2007 and 2008 beyond his limited authority.”

It goes on to say: “As a result of this fraud, and in order to strengthen its capital base, the Group will launch a capital increase of £4.1bn, with preferential subscription rights, which has been fully underwritten by a bank syndicate.”

Recommended

Trade bodies secure European Consumer Credit Directive amendment

The AFB and AMI have claimed victory in securing an amendment to the European Consumer Credit Directive which would have banned the payment of commission.It says that an elevent hour submission from the associations to MEP’s led to the change of the directive.The Consumer Credit Directive passed its Second Reading in the European Parliament on […]

Technical drawing

Among many papers issued by the FSA in the pre-Christmas rush was one on its investigation into whether the market meets the needs of older consumers. It was assessing what has become known as decumulation or using assets built up over a working lifetime to provide retirement income. This is mainly through three product groups – annuities, income withdrawal (unsecured and alternatively secured pensions) and equity release.

Sumus profits up by 76%

Sumus profits rose by 76 per cent to £1.51m last year while revenue nearly doubled to £29.8m.

US equities: opportunities for short sellers expand

Optimism is as American as baseball and apple pie. And since the financial crisis, being optimistic about US equities has paid off: they have outperformed every other major developed market by a comfortable margin. Yet while there remain plenty of good reasons to be optimistic about US equities, Stephen Moore, manager of the Artemis US […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment