Jerome Kerviel
He is noted to be the poorest man in the world after he made huge losses that were valued at 4.9 billion euros. Jerome, born on the 11th January 1977 is a french rogue trader who was convicted and imprisoned in 2008 Societe General trading loss for breach of trust, forgery, and unauthorized use of the bank’s computers. His mother was a hairdresser, his father a blacksmith, and got married but later separated in the year 2008.
Education and Career
He graduated in the year 2000 from Lumiere University Lyon 2 with a Master of Finance specializing in organization and control of financial markets. Prior to that, he received a bachelor’s degree in finance from the University of Nantes. He joined the middle office of the bank Societe General in 2000 and worked in its compliance department. He was later promoted to the bank’s Delta One products team in Paris. The governor of the bank of France described Kerviel as a computer genius.
His Unauthorized Trading
Kerviel began creating fictitious trades in late 2006 and early 2007 but in relatively small transactions. The fake trading increased in frequency and in size by trading profitably in anticipation of falling market prices and was accused of exceeding his authority to engage in unauthorized trades totaling as much as 49.9 billion euros. This figure was far higher than the bank’s total market capitalization. Societe General claimed Kerviel had taken massive fraudulent directional positions far beyond his limited authority.
His unauthorized trading went unnoticed because he worked alone. And whenever his fake trades were questioned, He would describe it as a mistake, cancel the trade and later replace the trade with another transaction using a different instrument to avoid detection. Kerviel is not thought to have profited personally from the suspicious trades. Prosecutors say he has been cooperative with the investigation and has told them his actions were also practiced by other traders in Societe General.
Kerviel’s Legal Repercussions
The bank where he worked filed a lawsuit against him for creating fraudulent documents, using forged documents, and making attacks on an automated system, according to the spokeswoman for the prosecutor. In addition, a group of shareholders filed a lawsuit for fraud, breach of trust, and forgery. His trial began in October 2010 and was found guilty and sentenced to five years of prison, with two years suspended full restitution of the $6.7 billion which was lost, and a permanent ban from working in financial services.
