...or 150,000 years worth of tuition at Notre Dame (with money to spare for ResLife fines!)...
These figures add up to over $7 billion, the same amount of money lost this week in a trading scandal by Société Généralés, one of France's largest banks. Detailed information on the matter is limited and the story being told to/by the media still leaves many questions wanting for answers:
-How could ONE mid-level employee single-handedly pull off the LARGEST fraud in history? (even George Clooney needed 10 other people to help him rob the MGM!)
-The NYT claims that Mr. Kerviel made no profit from the scheme...but then why did he do it? Who was profiting? Somebody HAD to have been profiting...
-Société Généralés' auditors discovered the fraud last weekend, started selling off some of their hedge funds on Monday, didn't disclose the fraud until Thursday...am I missing something? Am I the only person who sees something wrong with this?
-The French Prime Minister claims that "the scandal has nothing to do with the situation in the financial markets"...even though the instability and anxiety induced by the bank selling off billions of bad bets is more than enough to induce a downward spiral in any market.
-The reporting on the scandal treats this as an isolated anomaly. Is it? If it is true that Mr. Kerviel was, on his own, able to infiltrate and exploit one of the largest financial institutions in the world and rip it off for $7.2 billion, what does that signal about the integrity of the world financial system? What other forms of scandal, corruption, and exploitation exist? This issue is not often talked about, but a telling statistic is that over $1 TRILLION is thought to be laundered every year (some estimate that the value is closer to $3 trillion). This money does not exist outside or independent of the "legal" financial system, but often commingles with licit money and enters legitimate financial systems and institutions. I don't think this is an isolated anomaly...
-I still don't believe he did it by himself. It just doesn't add up...
Sean
p.s. on a somewhat related topic, the NYT article had an interesting chart on past fraud cases similar to Mr. Kerviel's. Revealing fact: of the four others that committed trading fraud (with all but one totaling in the $billions) the longest jail sentence was 7.5 years! This is while we simultaneously put third strike drug users for LIFE. Who's a bigger criminal?
Several other articles that cover the scandal:
1
2
3
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