The greatest fraud performed for no reason by Martina Harvanova

Humans tend to behave after a strange manner time to time. As it is accustomed, everything we do is an action for a reason. Despite this generally known and accepted fact, there are always some exceptions. Just like in a recently investigated case in France. A trader of Societe Generale, one of the leading financial service groups in the euro zone, is accused of losing 4.9 billion Euros ($7.2 billion) through unauthorized dealing. The biggest-ever trading fraud by a single person is still being investigated, but so far some detected facts are staggering. The act of Jerome Kerviel began when he set up positions in futures linked to European stock indexes and then hedged them with fictitious trades. The entire fraud can have been performed as he hacked into computers and faked e-mails and documents to hide his trades as well as he exploited other weaknesses in controls. He took only four days off last August and postponed a vacation at the end of the year, Societe Generale said. Banks often make trading staff take time off so any concealed positions will become evident in their absence. The issue is deemed a proof of a clear fault in the bank's control systems and a need of tighter regulation of the state too, as both the bank officials and the president Sarkozy acknowledged. However, there is also another striking aspect of the case - the reason of Kerviel's step. As claimed by bank's CEO: "we don't know, we don't understand what drove him to do it." Kerviel's motivations are still quite unclear and therefore the event is a massive shock for the Societe Generale. In fact, the defendant didn't steal anything, take anything, he didn't take any profit for himself. Rather reserved and considerate Kerviel used to be a successful and hardworking employee and as his lawyer said the trader made profits for the bank through 2007and took risky positions like all traders. Our actions don't need to be done for a reason. Sometimes we behave somehow subconsciously, we simply want to achieve some position. Just like Kerviel, we need to prove our ability to reach a particular target or to show how efficient our work can be performed. This case unveiled our every-day behavior. It is just a common move accomplished in an extreme way.

related story: http://www.bloomberg.com/apps/news?pid=20601085&sid=auk00jDKCNA0

by Martina Harvanova for PocketNews (http://pocketnews.tv)

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