'n Vriendelike Veeltalige Internasionale Bymekaarkomplek
A Friendly Multilingual International Social Meeting Point

 
HomeHome  CalendarCalendar  GalleryGallery  FAQFAQ  SearchSearch  RegisterRegister  MemberlistMemberlist  UsergroupsUsergroups  Log in  

Share | 
 

 French bank hit by €4,9-billion fraud

View previous topic View next topic Go down 
AuthorMessage
Bennie
Addict


Male
Number of posts : 392
Location : Johannesburg
Registration date : 2007-11-02

PostSubject: French bank hit by €4,9-billion fraud   Thu Jan 24, 2008 4:09 pm





Sudip Kar-Gupta | Paris, France
24 January 2008 11:17
DisplayDCAd('220x240','1','');

TARGET="_blank"
HREF="http://ad.za.doubleclick.net/click%3Bh=v8/3651/3/0/%2a/t%3B178498108%3B0-0%3B0%3B16414598%3B5725-220/240%3B24380912/24398765/1%3B%3B%7Esscs%3D%3fhttp://www.nissan.co.za/vehicles_livina.asp">
French
bank Société Générale (SocGen) disclosed one of the biggest alleged
frauds in financial history on Thursday, adding to a wave of gloom
surrounding world markets battered by credit market losses.

SocGen, France's second-biggest listed bank, said it had uncovered an "exceptional fraud" by one of its traders.

It
said this would cost the group €4,9-billion and announced plans to
raise €5.5-billion through a capital increase to shore up its balance
sheet, also reeling from a crisis in global credit markets.

The
fraud disclosure brought back memories of Nick Leeson, the British
trader who in 1995 brought down blue-blooded merchant bank Barings
after racking up huge losses.

SocGen said it was in the process
of dismissing the Paris-based trader, who it did not name, and added
that the trader's managers would leave the company.

It added that its board had rejected an offer by chairperson and chief executive Daniel Bouton to resign.

SocGen shares were suspended.

The
Bank of France announced an inquiry by the Banking Commission and said
no further comment was necessary after Société Générale took steps to
strengthen its balance sheet.

French Economy Minister Christine Lagarde will make a statement during the day on the issue, her office said.

"The
most serious thing is that this puts into doubt the risk-management
systems at some banks," said Fortis analyst Carlos Garcia.

A
source at SocGen said the trader was "not one of its stars" and was
relatively young. SocGen said the trader had been handling plain
vanilla futures contracts on European stock-market indices, betting on
broad share market movements.

It was not immediately clear what
role French police were taking in the investigation. The French
prosecutor's office was not available for comment.

Further write-downs
Analysts
said the episode would have a major impact on the reputation of SocGen,
which was founded in 1864 and is one of France's most prestigious
blue-chip companies.

UBS said in a research note that the fraud
would impact the credibility of its derivatives business, which has
been one of its fastest-growing units and has a world-leading
reputation.

Shares in rivals like BNP rose. The fraud could rekindle BNP's ambitions to take control of SocGen, analysts said.

The
losses also echo a similar blow on a much smaller scale last year to
France's biggest retail bank, Credit Agricole, which in September
announced a €250-million charge related to an unauthorised trading
position.

SocGen also announced further write-downs of €2,05-billion related to the global credit crunch.

Banks
around the world have been hit by credit market losses related to
United States subprime mortgages. These mortgages are the riskiest
property loans, often extended to people who have payment difficulties
or a bad credit history. -- Reuters
Back to top Go down
View user profile
 
French bank hit by €4,9-billion fraud
View previous topic View next topic Back to top 
Page 1 of 1
 Similar topics
-
» Senior 63 yr old Bank Executive arrested on suspicion of Tax Fraud
» Bloomberg: Deutsche Bank suspects Russian clients laundering six billion
» Cindy Anthony Implicated in Mail Fraud?
» Bank of England warns of problems
» MF Global brokers/dealers $1.2 billion missing!

Permissions in this forum:You cannot reply to topics in this forum
Sparkling Sparklers :: Sparkling Sparklers Forums :: In die Nuus - In the News-
Jump to: