SocGen used one trader to unwind $73 billion of deals

SocGen used one trader to unwind $73 billion of deals
Reuters - Sunday, January 27 06:16 pm

PARIS (Reuters) - French bank Societe Generale said on Sunday it used one sole trader to unwind 50 billion euros (37 billion pounds) worth of positions following its discovery of an alleged fraud at the bank.
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"We used just one trader," Jean-Pierre Mustier, the chief executive of SocGen's corporate and investment banking unit, told reporters on a conference call.

Mustier declined to identify the SocGen trader, but said he was a "very senior guy in the organisation." The bank unwound the position from Jan 21-23, with markets already under pressure from concerns over global credit losses.

Police are questioning 31-year-old SocGen trader Jerome Kerviel over the alleged fraud, which led to 4.9 billion euros worth of losses at the bank. SocGen said the nominal amount of the fraudulent position was around 50 billion euros.

Mustier said the unravelling of Kerviel's trades showed it was feasible for one trader alone to have caused the fraud.

"For matters of confidentiality, when we found out about the transaction we just had one trader, just one trader, to unwind the transaction. If one trader could unwind the transaction, one trader could put on the transaction."

($1=.6825 Euro)

(Reporting by Sudip Kar-Gupta, editing by Maureen Bavdek)