The Societe Generale SA trading scandal grinds on, with yet another internal report. The conclusions, amazingly enough at this point, still appear to be tentative: Jerome did what he did (well, he confessed), he may have had an accomplice (his trusty assistant who input false data, but claims he didn't know what he was doing), and his two immediate supervisors shoulder the blame for inadequatte supervision. No kidding.
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Still, mysteries remain, as they have since the beginning. What did the top guys know? Now the fact is there's been a general houscleaning at SocGen as a result of the scandal, so this isn't about getting anyone fired. But it is curious. When Jerome lost all that money, the world, including CEO Daniel Bouton and the boys at the top of the bank, heard very quickly. But, as we now know, he also made an amazing amount of money for a plain-vanilla swaps desk over the year or so before the big Pink Panther-like "discovery" of fraud. It continues to boggle the mind that such big gains were being booked deep within the trading desk and no one at the top wondered who was behind them. Didn't anyone ask them? Did they review Bouton's e-mails?
And one more thing. This will never happen again because SocGen has installed all kinds of new risk controls and alerts. Right. - Robert Teitelman
See earlier stories about SocGen
