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France police hold rogue bank trader suspected of massive fraud

[JURIST] Jerome Kerviel, a former trader at the French bank Societe Generale [official website], turned himself in to French police Saturday in connection with an investigation of what caused the bank to lose more than $7 billion. Kerviel has been accused of carrying out a scheme which amounted to the largest bank fraud in history. Societe Generale, where Kerviel worked since 2000, said it discovered the plan on January 18. The bank stated that Kerviel acted alone and that his strategy involved betting billions of dollars of the bank's money on European stock index futures.

French officials have pressured Societe Generale to explain how Kerviel's actions did not draw the attention of his supervisors or the bank's internal officers. The bank's chief executive, Daniel Bouton, said in an interview [Le Figaro report, in French] "...when the control systems detected an anomaly, he managed to convince control officers that it was nothing more than a minor error.” The New York Times has more. Le Figaro has additional coverage, in French.

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