"Rogue Trader" Blamed for $7 Billion Bank Loss Arrested By French Police
By newsdesk - Posted on January 27th, 2008
26 January 2008 -- French police have detained a young bank trader blamed for losses of more than $7 billion at France's second largest bank, Societe Generale.
Judicial officials say authorities are holding Jerome Kerviel for questioning Saturday at the headquarters of the French financial police in Paris. The 31-year-old had not been seen in public since Societe Generale announced the record trading loss Thursday.
French investigators searched Kerviel's home in the Paris suburbs Friday as part of their investigation of the former stock index futures trader.
Societe Generale says Kerviel has confessed to covering up losses in his trading activity by inventing other trades that never occurred. The loss nearly wiped out the bank's profit for 2007, and is being called one of the biggest financial frauds in history.
Bank officials have fired Kerviel and his supervisors, but they say the young trader did not profit from his actions. They describe him as a relatively low-level trader of limited experience who had worked for the bank since 2000.
President Nicolas Sarkozy spoke Friday, during a visit to India, about the scandal. Although the bank faces a large-scale internal problem, Mr. Sarkozy says there is no reason to doubt the stability and reliability of the French financial system.
However, Societe Generale is under increasing government pressure to give a full account of how the trader managed to lose so much money.
Source: VOA News
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