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Jerome Kerviel

Definition

Jérôme Kerviel is a French trader who was convicted in the 2008 Société Générale trading loss for breach of trust, forgery and unauthorized use of the bank's computers, resulting in losses valued at €4.9 billion.

What is 'Jerome Kerviel'

A trader for French securities firm Société Générale that was charged with losing more than $7 billion in company assets by conducting a series of unauthorized and false trades between 2006 and early 2008. When company managers discovered that Kerviel had conducted tens of billions of dollars' worth of unauthorized trades, they rushed to close out the open positions (most of which were specialized equity arbitrage trades) and contain the extent of the fraud. Several of the trades were closed out with heavy losses due to a falling market at the time of sale.

Explaining 'Jerome Kerviel'

Kerviel had several years' experience in Société's back office, and was well-versed in the company policies for approving and regulating trading among its brokers. Kerviel's losses are yet another case study in rogue trading, despite all the modern regulations and technological advances designed to prevent such things from ever happening.

Kerviel was not considered a well-renowned trader by any extent; in fact, when the story broke many openly wondered how such a person could obtain the authority over such huge sums of capital without the company noticing. Kerviel hid his early gains by creating fake, offsetting trades in the system's computers and logs. He had extensive knowledge of the computers and systems used in the company, which was essential to his trading scheme.


Further Reading


Jérome Kerviel the'rogue trader'of Société Générale: Bad luck, bad apple, bad tree or bad orchard?
papers.ssrn.com [PDF]
… to Global Corporate Scandals, Vanderbilt University Law School Law and Economics Working Paper … www.news.com.au/business/breaking-news/french-rogue-trader-jerome- kerviel-guilty- of … 40 C. Bremner, Rogue Société Générale trader Jérôme Kerviel jailed, ordered to repay …

Behavioural patterns in rogue trading: Analysing the cases of Nick Leeson, Jérôme Kerviel and Kweku Adoboli—Part 1Behavioural patterns in rogue trading: Analysing the cases of Nick Leeson, Jérôme Kerviel and Kweku Adoboli—Part 1
www.ingentaconnect.com [PDF]
… to Global Corporate Scandals, Vanderbilt University Law School Law and Economics Working Paper … www.news.com.au/business/breaking-news/french-rogue-trader-jerome- kerviel-guilty- of … 40 C. Bremner, Rogue Société Générale trader Jérôme Kerviel jailed, ordered to repay …

Behavioural patterns in rogue trading: Applying control balance theory to the rogue traders Nick Leeson, Jérôme Kerviel and Kweku Adoboli—Part 2Behavioural patterns in rogue trading: Applying control balance theory to the rogue traders Nick Leeson, Jérôme Kerviel and Kweku Adoboli—Part 2
www.ingentaconnect.com [PDF]
… to Global Corporate Scandals, Vanderbilt University Law School Law and Economics Working Paper … www.news.com.au/business/breaking-news/french-rogue-trader-jerome- kerviel-guilty- of … 40 C. Bremner, Rogue Société Générale trader Jérôme Kerviel jailed, ordered to repay …

Europe and the US: A Tale of Two Financial CrisesEurope and the US: A Tale of Two Financial Crises
bruegel.org [PDF]
… to Global Corporate Scandals, Vanderbilt University Law School Law and Economics Working Paper … www.news.com.au/business/breaking-news/french-rogue-trader-jerome- kerviel-guilty- of … 40 C. Bremner, Rogue Société Générale trader Jérôme Kerviel jailed, ordered to repay …

THE MOVIE L'OUTSIDER AND THE STORY OF JÉRÔME KERVIEL: AN EXAMPLE OF CONTRIBUTION OF CINEMA TO AN ANTHROPOLOGY OF FINANCIAL …THE MOVIE L'OUTSIDER AND THE STORY OF JÉRÔME KERVIEL: AN EXAMPLE OF CONTRIBUTION OF CINEMA TO AN ANTHROPOLOGY OF FINANCIAL …
econpapers.repec.org [PDF]
… to Global Corporate Scandals, Vanderbilt University Law School Law and Economics Working Paper … www.news.com.au/business/breaking-news/french-rogue-trader-jerome- kerviel-guilty- of … 40 C. Bremner, Rogue Société Générale trader Jérôme Kerviel jailed, ordered to repay …

Financial risk management: When does independence fail?Financial risk management: When does independence fail?
pubs.aeaweb.org [PDF]
… to Global Corporate Scandals, Vanderbilt University Law School Law and Economics Working Paper … www.news.com.au/business/breaking-news/french-rogue-trader-jerome- kerviel-guilty- of … 40 C. Bremner, Rogue Société Générale trader Jérôme Kerviel jailed, ordered to repay …

New plots are badly needed in finance: accounting for the financial crisis of 2007‐2010New plots are badly needed in finance: accounting for the financial crisis of 2007‐2010
www.emerald.com [PDF]
… to Global Corporate Scandals, Vanderbilt University Law School Law and Economics Working Paper … www.news.com.au/business/breaking-news/french-rogue-trader-jerome- kerviel-guilty- of … 40 C. Bremner, Rogue Société Générale trader Jérôme Kerviel jailed, ordered to repay …

Do Traders Become Rogues? or Do Rogues Become Traders? The Om of Jerome and The Karma of Kerviel…Do Traders Become Rogues? or Do Rogues Become Traders? The Om of Jerome and The Karma of Kerviel…
papers.ssrn.com [PDF]
… to Global Corporate Scandals, Vanderbilt University Law School Law and Economics Working Paper … www.news.com.au/business/breaking-news/french-rogue-trader-jerome- kerviel-guilty- of … 40 C. Bremner, Rogue Société Générale trader Jérôme Kerviel jailed, ordered to repay …



Q&A About Jerome Kerviel


Who is Jerome Kerviel?

A trader for French securities firm Socit Gnrale that was charged with losing more than 7 billion in company assets by conducting a series of unauthorized and false trades between 26 and early 28.

How did Jerome Kerviel conduct his unauthorized trades?

He conducted his unauthorized trades through a series of fake, offsetting trades in the system's computers and logs.

Where does Mr.Kerveli work now?

He works at another company called Euronext;

Who is responsible for preventing such things from ever happening despite all modern regulations designed to prevent such things from ever happening ?

The Securities Exchange Commission (SEC) is responsible for preventing such things from ever happening despite all modern regulations designed to prevent such things from ever happening .

Why was it easy for Jerome Kerviel to conduct his unauthorized trading scheme?

It was easy because he had extensive knowledge about the computers and systems used in the company.

What is his position at Euronext ?

He is an equity derivatives trader;

What does the police say about these charges against Jerome Kerviel?

They state they lack evidence to charge him with fraud and charged him with breach of trust and illegally accessing computers instead.

What did Jerome Kerviel do?

He conducted tens of billions of dollars' worth of unauthorized trades.

What is Jerome Kerviel?

Jerome Kerviel is a trader.

Why did Socit Gnrale state that they lost this money?

Because of fraudulent transactions created by Jerome Kerviel.

Who was responsible for these losses?

The bank states that the losses were caused by Jerome Kerviel.

What happened when Socit Gnrale managers discovered that they lost more than 7 billion due to Jerome Kerviel's actions?

They rushed to close out open positions (most which were specialized equity arbitrage) and contain the extent of fraud.

When were Jerome Kerviel's losses discovered?

His losses were discovered when company managers found out that he had conducted tens of billions of dollars' worth of unauthorized trades.

How much money did Socit Gnrale lose due to the actions of Jerome Kerviel?

The bank lost 4.9 billion euros.

Where can you learn more information about this case ?

You can read more information here ;

What happened when some positions were closed out with heavy losses due to falling market at time sale occurred?

The market fell sharply during this period, making many positions unprofitable or even worthless as prices dropped further after sales occurred.