It's completely unclear to me where the money went. It is a rather large sum. It should be distributed to all of us so we can buy classic cars with it. With the recession looming, prices will be falling and it's our duty to prop them up!
Now, can you explain about issuing new stock re: dilution of existing stock value? I know it's kinda basic, and I can always ask my friend the mutual-fund manager I guess.
Here is an excerpt from an article I read about it................
The bank, which insisted he had acted alone, said he took out "massive fraudulent directional positions in 2007 and 2008 beyond his limited authority."
Experts however had trouble accepting that a trader could have managed to successfully hide such colossal losses.
"It seems a bit much to believe that for an entire year this would have gone undetected," said Elie Cohen, a professor of economics at the Paris Institute of Political Studies.
"One person alone cannot trigger such a catastrophe," commented Arnaud Riverain from the private firm Arkeon Finance. The bank's trading desk must have suffered from some "dysfunction", he said.
Kerviel, who earned less than 100,000 euros per year, allegedly built up the huge losses dealing in derivatives tradings.
"The transactions which involved the fraud were simple -- taking a position on shares rising -- but hidden using extremely sophisticated and varied techniques," said Bouton in a statement.
He said the trader had been suspended after confessing to the fraud and that legal action would be taken against him.
Asked about his whereabouts, Bouton responded: "I don't know where he is."
One of France's three biggest banks, Societe Generale filed a court complaint against the trader, accusing him of falsifying bank documents, using falsified bank documents and unauthorized computer access.
And as the Paris prosecutor's office opened a preliminary investigation into the scandal, scores of shareholders lodged suit against the bank for fraud and misconduct.
The bank has already announced it was firing executives "responsible for the supervision and controls on the operations concerned."
Bouton, whose offer to resign was rejected, said both he and his deputy Philippe Citerne would forego their salaries for six months and their bonuses for 2007.
Finance Minister Christine Lagarde said she had asked the country's banking regulator to bring in tougher controls in response to the scandal.
Societe Generale said in a statement that the rogue trader had been carrying out what it called "vanilla futures hedging" on European equity markets -- industry jargon for the most basic kind of futures purchase.
It said he had an in-depth knowledge of the bank's control systems, and managed to cover his tracks "through a scheme of elaborate fictitious transactions."
These were discovered and investigated on January 19 and 20, it said.
A Societe Generale union source said it appeared that the trader had not acted for personal profit.
"The trader in question was experienced, knew how the bank worked. It seems he was playing the markets, but not for his own profit, and caused enormous losses," the source told AFP.
A human resources official described him as a "fragile" individual, "without particular genius" and facing family problems.
The scandal is only the latest of its kind to hit the international finance industry.
Three years after Nick Leeson caused the meltdown of Britain's Barings bank, Japanese trader Yasuo Hamanaka was jailed in 1998 for a decade of rogue trading which cost the Sumitomo Corporation of Japan 2.6 billion dollars.
In 2002 John Rusnak, a trader employed by Allied Irish Bank, was jailed for seven-and-a-half-years by a US court for losing the company 750 million dollars through unauthorised currency trading.
Societe Generale's stock has lost 20 percent of its value since the start of the year and 50 percent since last May.
The Fitch credit ratings agency lowered its ranking for Societe Generale debt to AA- from AA. Some analysts said the bank risked becoming a takeover target.