Societe Generale May Be Up For Sale

by Stewart Douglas

Story link: Societe Generale May Be Up For Sale

Under-fire Societe Generale has today announced that it may be willing to listen to takeover offers following the high profile ‘rogue trader’ scandal, which has left the bank billions out of pocket and open to criticism over its security and anti-fraud provisions by analysts throughout market sectors.

The bank has been very much in the media spotlight in recent weeks following the discovery of a widespread fraudulent trading scheme established by one of its junior traders, which staked significant amounts of investors’ money against highly risky, index linked investments, which have left the bank seriously out of pocket, prompting the announcement today that it may be willing to listen to offers from potential bidders.

Rogue trade Jerome Kerviel effectively gambled substantial amounts of the bank’s money on share indexes, managing to fly under the radar by creating fictitious share trades to cover his back. Whilst it has been revealed that the banker had indeed realised a profit of around £1 billion towards the start of his fraudulent activities, the resultant loss could have continued to cost the bank hundreds of millions every single day with the decline of European stock indexes over the last few weeks.

Meanwhile investigations into the event are ongoing on behalf of industry regulators, who are attempting to uncover exactly how such a junior trader could trade fraudulently without detection for such a prolonged period, and indeed why none of the security procedures designed to catch this sort of event flagged up the irregular trading patterns.

It remains to be seen whether the investigations will turn up more sinister involvement from other employeed of the bank, and indeed whether any prospective bidders will launch for the troubled investment firm.