French rogue trader held 50 bln euros in positions: Societe Generale
PARIS (AFP) — Societe Generale said Sunday that a rogue trader suspected of incurring massive losses at the French bank held positions worth about 50 billion euros (73 billion dollars) when he was uncovered.
Action was taken to liquidate the deals, limiting losses to 4.9 billion euros, Societe Generale said in a statement, a day after trader Jerome Kerviel, 31, turned himself in to police.
"The fraudulent position uncovered on Sunday January 20 totalled about 50 billion euros," said Societe Generale, one of Europe's biggest banks.
It said "it was imperative" that these positions be "undone as soon as possible, due to the risks tied to the amount." The French bank's market value is 35.9 billion euros.
Bank traders went to work over the following three days scrapping the deals and the position was closed on the evening of January 23, it added.
According to Societe Generale, the trader had bought futures in three European indices -- the Eurostoxx, the DAX in Frankfurt and the Footsie in London -- effectively betting on the future direction of the stock market.
It added that "market conditions were very unfavourable" when it decided to liquidate the positions, with the European and Asian markets registering drops in the days before the sell-off.
