Doesn't everyone remember how the media and SocGen were all up in arms about Kerviel being a "rogue" trader. The whole course of events was drastically over-dramatized to try and make a lasting impression that it wasn't the bank's fault.
And now this:http://www.ft.com/cms/s/0/d77670e2-2910 ... ck_check=1SocGen flouted rules, says report
By Scheherazade Daneshkhu and Peggy Hollinger in Paris
Published: May 23 2008 22:47 | Last updated: May 23 2008 22:47
Société Générale traders and their superiors regularly flouted the rules, as part of a freewheeling culture in the bank’s derivatives business, opening the way for alleged rogue trader Jérôme Kerviel to place €50bn in unauthorised trades, says a damning report published on Friday.
The report – which comprises three separate reviews – also suggested that Mr Kerviel, who frequently used fictitious trades, might not have acted alone. His trading assistant, reported to be Thomas Mougard, carried out almost 15 per cent of the fictitious trades registered by Mr Kerviel, it said. However, the assistant’s alleged collusion had to be confirmed by the legal probe, it added.
The findings are likely to reignite criticism of a bank that appears to have favoured growth over risk controls.
Although the report’s focus is on Mr Kerviel’s immediate superiors, it will almost certainly revive controversy over the continuing presence of Daniel Bouton, former executive chairman who last week split his roles. Only this week French president Nicolas Sarkozy reiterated his view that senior management must be held accountable.
The reports prepared by PwC, the professional services firm and the bank’s internal audit team, and the special committee of three non-executive directors, paint a picture of a bank with a low appreciation of the risk of fraud, “a strong entrepreneurial culture” and “the emergence of unauthorised practices with limits regularly exceeded and results smoothed or transferred between traders”. Mr Kerviel’s daily supervision was weak, in spite of many alert signals.
The PwC study referred to a “general environment that did not encourage the development of a strong support function” in terms of operational risk. But the report found no evidence that Mr Kerviel’s superiors or colleagues were aware of his alleged fraud.
Mr Kerviel’s lawyers on Friday night said the findings strengthened the trader’s defence by identifying the information available to the trader’s superiors.
SocGen stood by Jean-Pierre Mustier, head of the corporate and investment bank, saying that he had the confidence of Frédéric Oudea, the former finance director who took over from Mr Bouton, chairman, as chief executive last week.