The fraudulent positions adopted by an unnamed trader in 2007 and 2008 are costing France's second largest bank 4.9 billion euros ($7.2 billion).
The fraud was reportedly uncovered Monday, and Societe Generale confirmed that since then it had unwound all of the trader's allegedly fraudulent positions.
Societe Generale said the trader was responsible for "plain-vanilla" futures hedging on stock market indexes in Europe, and that he was able to conceal "massive" fraudulent positions thanks to inside knowledge of back-office control procedures.
Little has been said about the four other individuals fired from Societe Generale along with Kerviel, who were apparently supervising him even as he allegedly placed fraudulent positions amounting to 50 billion euros ($72.5 billion).
First there are the questions about the fraudulent positions adopted by an unnamed Paris-based trader in 2007 and 2008, which are costing France's second-largest bank 4.9 billion euros ($7.2 billion).
Societe Generale looked vulnerable to a BNP-led takeover partly because of Kerviel's rogue trading activities, which left the French bank nursing a $7.1 billion loss after unwinding $70 billion in allegedly fraudulent positions.
The bank had discovered that one of its traders had taken "massive fraudulent directional positions in 2007 and 2008," and that he had concealed them "through a scheme of elaborate fictitious transactions".
Société Générale said it had no indication that the trader — who joined the company in 2000 and worked for several years in the risk-management office before being moved to the Delta One trading desk in Paris — "had taken massive fraudulent directional positions in 2007 and 2008 far beyond his limited authority".
There will be loads of complex arguments, dressed up as two counts each of false accounting and fraudulent abuse of position – but in general, unauthorised trading is the City's equivalent of a bloke snaffling the week's housekeeping money from his wife's purse and popping down to the bookies.
Romney had adopted their rhetoric, fraudulent though his positioning was, and for them, that was enough.
