Saturday, January 26, 2008

SocGen Fraud And Market Crash A Coincidence?

How do you sell Futures over EUR 50 billion without affecting the marked (with all those sharp automated trading systems out there moving, well, A LOT of money in an instance), or, had the market not taken a dive, would there have been any loss and therefore fraud at Shock Gen at all?

NY Times: Société Générale’s Sales May Have Incited Market Plunge

German speaking N24 TV: Kontenverschleierung bei SocGen kein Einzelfall

Can't wait for the next movie, aeh, more details.


From Reuters: French police step up investigation into SocGen fraud
Jean-Pierre Mustier, head of SocGen's investment banking unit, told the Financial Times the rogue trader was managing hundreds of thousands of concealed trades and an equal number of fake hedges to give the appearance that any loss was offset.

"Every two or three days, he was changing his position. He would input a transaction that would trigger a control in three days and before that happened he would replace it with a different one," Mustier was quoted as saying.

SocGen has lodged a complaint with police based on three main charges -- fraudulent falsification of bank records, fraudulent use of such records and computer fraud. The three charges carry maximum prison terms of between 2 and 5 years.

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