The $7.2 billion fraud at France’s SocGen, the world’s leading equity derivative trading house, is breathtaking.
But I’m skeptical about the claim that its was all the work of one “genius”. And, if it was, we should all worry even more about the risks of derivatives.
According to the Financial Times, SoGen “quickly unwound the positions he had amassed,” estimated at 40 billion to 60 billion Euros. Okay, so where did he get the money? That’s a huge position. He financed that much–and the bank didn’t notice? How much else is out there that isn’t being monitored, watched, or understood?
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