How can the fate of the world's economy, and by extension the world itself, be concentrated in the hands of one person? A person with no conceivable power, financial or otherwise. Some believe that Jerome Kerviel's fraudulent trades from his low-level position at French bank Societe Generale could have contributed to last week's stock market sell off.
The rogue futures trader who cost French bank Societe Generale $7.14 billion had been betting on a much larger scale — with tens of billions in fraudulent deals, the bank said Friday.That last sentence is what really scares me. He didn't gain anything from the deal. What if he had been malicious? What more could he have done? For the sake of illustration, what if he was a muslim of North African descent sympathetic to Algerian Salafists or al-Qaeda?
France's No. 2 bank apologized to shareholders after discovering what appears to be the biggest-ever trading fraud carried out by a single person. The news Thursday rattled an already jittery banking sector at a time of global economic uncertainty.
The scale of the alleged fraud grew clearer Friday, when a bank official said 31-year-old trader Jerome Kerviel's positions had reached "several tens of billions of euros" — a staggering sum for a bank whose market capitalization is 35.9 billion euros ($52.6 billion). The official spoke on condition of anonymity in line with bank policy on such matters.
The bank said Kerviel appears to have netted no personal financial gain from the alleged schemes.
Believe it or not, preventing such disasters is a know process. Way back in college (yep, when I would chisel class notes onto a stone tablet), I took an accounting class that was all about separation of powers. We charted how you put checks and balances in place to prevent fraud. The bank had some but were weak enough that he was able to hide his trades and circumvent the security in place.
This week, as my Douche Bags of the Week, I'm including the bank as well since someone didn't take some college classes they should have.
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1 comment:
Bankers and stockbrokers routinely figure in my rogues gallery of douchebags, asshats, and fuckwits, alongside doctors, lawyers, Republicans, and the like.
Although, it's encouraging to know that when this guy almost plunged the world into another Great Depression he didn't do it for his own financial gain... Which begs then question: then why did he do it? Because he could?
This is the attitude that has made the French so beloved throughout Europe for the last thousand years. If you asked him he'd probably shrug, in that charming Gallic way that makes you want to strangle them.
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