WTF? Does anybody work at this place (almost certainly no)? How could anybody use “their superior knowledge of the bank’s security system” to hide $8B in losses? Some risk manager there is the world’s stupidest and laziest person. You can use your superior knowledge of the banks security system to read your yahoo mail at work, not hide $8B in losses.
and the guy is now on the run… first he thinks to hide the $8B… now he thinks he can hide FROM it…
I just read the news. Completely crazy, they say that the guy was handling futures on European stock market indices and that the SoGen will fire his managers. Imagine?! hehe
I knew Joey would be all over this. It’s really quity scary that, when you consider the sheer size of the derivatives market,trillions of $$$ of notional worth, that someone can hide $8 billion in loses.
Just read the article. It seems that a surprising number of people get away with it (like the guy at Barrings bank a few years back). It’s one thing to have the market blow up on you in one day, but how to folks go for months and months and months hiding stuff. I guess I’m just not that smart (or that unethical).
Goes to show you that 90% of risk management “controls” and “checks” are just good PR. There are some risk managers out there who do a good job – generally at companies that allow their risk managers to actually do their jobs – but how can you even say that you have any risk management at all when you can’t even tell what freaking positions your traders have on?
This is why BOMs should never be promoted! http://www.bloomberg.com/apps/news?pid=20601087&sid=aOzOTPDFOnbc&refer=home “Societe Generale said that it has already closed all the positions set up by the trader, who had used his experience working in the back office to hide his trades through fictitious transactions.”
“…who had used his experience working in the back office…” Lol, there goes your reason to work BO
come on do you really believe it was just one guy and no supervisor knew? if he lost 7 bln $ means that he had posiotions of dozens of bln… BTW - their office is just accross the road and I can tell you they had gloomy faces this afternoon
imo SocGen are using this as a scapegoat to hide “other” losses… maybe further subprime related losses?
newsmaker Wrote: ------------------------------------------------------- > Goes to show you that 90% of risk management > “controls” and “checks” are just good PR. There > are some risk managers out there who do a good job > – generally at companies that allow their risk > managers to actually do their jobs – but how can > you even say that you have any risk management at > all when you can’t even tell what freaking > positions your traders have on? Amen!
They should blame this whole market volatility mess on that rogue trader! of course he did it. We need a skapegoat.
"but they were hidden through extremely sophisticated and varied techniques,’’ “His approach was to balance each real trade with a fictitious one, and his intimate and perverse'' knowledge of the bank's controls allowed him to avoid detection" can you really enter fictitious trades and there is no reconciliation of these trades? "He breached five levels of controls,’’ Christian Noyer, the governor of the Bank of France, said at a press conference today. He described the trader as ``a computer genius’’” the guy is a real computer whiz…
mrzerga Wrote: ------------------------------------------------------- > "but they were hidden through extremely > sophisticated and varied techniques,’’ > > “His approach was to balance each real trade with > a fictitious one, and his ``intimate and > perverse’’ knowledge of the bank’s controls > allowed him to avoid detection” > > can you really enter fictitious trades and there > is no reconciliation of these trades? No comment LOL. You’d be surprised what you can do…
Best comment I have heardon the whole thing: This trader must be named Mint Jelly becasue he is on the lamb
There is zero chance that would have happened if I had been running risk management there. No way, no chance, never, ever in a million years. The key to stuff is feedback and reconciliation. I would literally bet my life on it.
No kidding: Enter trade: Choose a number and hit enter. Cancel and re enter/backdate/change holdings…
JoeyDVivre Wrote: ------------------------------------------------------- > There is zero chance that would have happened if I > had been running risk management there. No way, > no chance, never, ever in a million years. The > key to stuff is feedback and reconciliation. I > would literally bet my life on it. Perhaps they should hire you?? Rumour has it Paris has a lot of good art and some very sexy women! Vous???
I know that a lot of big banks have seriously gone off the deep end because of weak risk management…but is this because these banks don’t have much of a semblance of a risk management department, or are the people in risk management just incompetent? Anyone else care to speak from personal experience? (it’s OK, I admit I am incompetent at certain things too so please don’t be ashamed)
JoeyD- you have to consider that some stuff gets reced out in spreadsheets and dbos at these big banks. If the kid knew how to enter a dummy offset - which people do for test purposes all the time - then it’s highly probable that someone may have over looked it. Since it was offset by a dummy trade (that probably looked live) then their books obviously didn’t look down 8 billion. It’s actually pretty easy to construct- and you have to take into consideration the lifer back office people that manage these places, they don’t care (or sometimes understand) what is happening. A good question to raise is whether they are dumping sub prime losses in with whatever this kid did. I wonder why they didn’t shut their mouths for a couple weeks to see if they could get out of the positions unscathed. my .02