Low-Level Société Générale Insider’s Forgeries Cost Bank $7.2 Billion

This week Economist.com reports that Jérôme Kerviel, the Société Générale employee who sparked the world's biggest-ever trading loss, was so low on the bank's totem pole that some didn't consider him a trader at all. That may have been what allowed him to pull it off. According to preliminary inquiries into the trading fraud that cost Société Générale €4.9 billion ($7.2 billion), Mr. Kerviel allegedly placed hundreds of thousands of unhedged real trades on stock-index futures markets. For months, Mr. Kerviel avoided detection because -- even as he allegedly built up massive positions -- he always managed to square his books as a low-level trader in the "Delta One" desk: never make a big profit or loss. When one trade caught the attention of a supervisor last week, and the system collapsed, myriad small losses compounded into a huge financial hole for the bank.