French's second largest bank by market value has today uncovered a massive $7.2bn loss accumulated by a lone traders actions. The trader who has agreed to this is yet to be mentioned as at release. The trader had basically opened trades beyond his limit got in trouble. This fraud was uncovered last week. As at release Societe Generale has it's shares suspended, with the bank Chief executive offering to step down but the Bank's Board has refused the move from It's Chief Executive, although supervisors were suspended on this move.
From a fax release the bank stated that it discovered this on Jan 19, although the crime was committed between 2007 & 2008, he took very high trading position, and as a middle employer he was able avert security. And is not clear when shares would start trading again.
Furthermore, the trader has had all his open positions closed. The bank has also stated that he was aided by in-depth knowledge of control procedures.Though it is a big bank but it's a massive loss to take and they tend to seek re-capitilization to the tone of about $7bn.
All seems to be very untimely at a point where global slow doen seems to be on the lips of investors around the world, this would be a big blow for Societe Generale to take at this point.
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