European financial firms can expect a much more unforgiving attitude from regulators following the alleged fraud at French bank Societe Generale, the biggest rogue trading scandal in financial history.
While SG initially blamed its staggering loss on the activities of trader Jérôme Kerviel—whom the bank originally called a “genius of fraud”—evidence is mounting that the bank’s internal control and risk management systems were critically weak.
The bank lost at least $7.15 billion on $73 billion of unhedged futures contracts that Kerviel built up, allegedly in breach of his trading limits and without the banks’ knowledge. Both the French daily Le Monde and ...