Rules widely flouted at SocGen

A former Société Générale
risk auditor yesterday backed the claims by Jérôme Kerviel, the trader at the
centre of the bank’s €4.9bn (£3.7bn) losses, that rules were widely flouted by
traders, who escaped punishment ‘because they were making money for the bank’.

Maxime Legrand said inspections were a sham carried out by junior staff
lacking the clout to check on traders, who did not take them seriously and
hounded them out.

His comments will be seen by the bank’s critics as an explanation of how
Kerviel, was able to stake €50bn on European stock markets without being found
out, The Times reports.

‘Personally, I wasn’t up to detecting exactly the risks there could be,’
Legrand, who worked at SocGen between 2001 and 2004, said. ‘The inspection team
didn’t have enough power in this bank and we weren’t given the time or the means
necessary to carry out verifications.’

Further reading:

Rogue trader refuses to be scapegoat

French regulator slams SocGen’s monitoring

story in The Times

Related reading