bugger must be a nick leeson groupie...

what with the financial markets already in a state of turmoil over the US sub-prime meltdown, and major US banks having to take massive hits in writedowns as a result, the last thing the market needs is a rogue trader...goodness, haven't the banks learnt from the mistakes of BARINGS when nick leeson ran amok and brought the venerable british bank to its knees???

now it's the turn of Soc-Gen

Rogue trader to cost SocGen $7bn

French bank Societe Generale says it has uncovered "massive" fraud by a Paris-based trader which resulted in a loss of 4.9bn euros ($7.1bn; £3.7bn).

The bank said the fraud was based on simple transactions, but concealed by "sophisticated and varied techniques".

While Societe Generale has yet to name the trader, media reports say he is 31-year-old Frenchman Jerome Kerviel.

The losses are four times greater than those made by Nick Leeson, the rogue trader who brought down Barings Bank. Leeson was sentenced to six-and-a-half years in jail.

Speaking to the BBC, Leeson said he was not shocked that the latest fraud had taken place - only its scale.

"Rogue trading is probably a daily occurrence within the financial markets," he said. "What shocked me was the size. I never for one moment believed it would get to this degree of magnitude, this degree of loss."

Societe Generale's shares, which were suspended in the morning, ended the day down 4.1%. According to reports, Mr Kerviel worked at the bank's Delta One products team in Paris.

Although Societe Generale has yet to confirm his name, it did say that the trader was a Frenchman in his 30s who joined the bank in 2000 and earned a salary and bonus of less than 100,000 euros. He was responsible for betting on the markets' future performance, bank executives said. Societe Generale said the trader had taken what it called "massive fraudulent directional positions in 2007 and 2008 beyond his limited authority".

The fraud is an extraordinary echo of the rogue trader, Nick Leeson, who caused the collapse of Barings Bank in 1995, says BBC business correspondent Nils Blythe. But the losses uncovered by Barings bosses totalled just £860m - about a quarter of the amount lost by Societe Generale.

The bank, one of France's largest, will need to seek 5.5bn euros in new capital to offset the losses. But it said it would still make a profit of 600m to 800m euros for 2007, despite the blow to its balance sheet. The bank's losses have seriously dented its profits for 2007. The company will announce its full year results on February 21, and it said that it expects its 2007 net income to be in the range of 600m-800m euros. Shares in Societe Generale have fallen by nearly 50% in the past six months.

Societe Generale is also going to raise 5.5bn euros through a capital increase "to strengthen its capital base".

article HERE