Good With Kids

Jerome Kerviel taught kids judo, held the door for his elderly neighbors in a posh Paris suburb — and appears to have committed one of the biggest bank frauds in history … In the Brittany town of Pont l’Abbe where Kerviel grew up, his former judo teacher remembered him as a serious, helpful teenager. “He came in to train two or three times a week, and he also helped out with classes for kids,” said Philippe Orhant … “I liked him a lot, and I had total confidence in him” … Kerviel’s mother traveled to the Paris area on Thursday, when the bank revealed the scandal, to see her son, “because he wasn’t doing well,” said another aunt, Sylviane Kerviel. “Jerome has done nothing wrong,” she said. “He was a reserved, serious child. He didn’t pocket a cent, I’m sure of it” … Kerviel took “massive fraudulent directional positions” in various futures contracts, the bank said, betting at the start of this year that markets would rise. The bank says his actions cost it €4.9 billion (US$7.18 billion).

[Bank] Executives called him in for questioning on Saturday … Mr. Kerviel had convinced himself that he had mastered a new way to trade stock-index futures … For a while, he went in circles while justifying the trading strategy, this person said, but finally on Saturday night he broke down and admitted the trades. [To avoid] tipping off rivals (which could take advantage of the mass selling), on Monday the bank began unwinding the positions in small trades. [They] dealing with a market selloff that had begun in Asia [and] some index traders suspect that Société Générale’s steady selling kept the European markets from shaking off the sharp downturn on Monday … The day after that turmoil, the U.S. Federal Reserve slashed short-term interest rates three-quarters of a point. According to people familiar with the matter, the Fed hadn’t been told of the selling by Société Générale that conceivably was helping cause the Monday market volatility.

Leave a Reply