What is $7.14 Billion?

socgen_logo.gifThe amount that Soc Gen should have told analysts was due to write-off’s related to subprime loans. Instead Soc Gen CEO Daniel Bouton insisted the USD 7.14 billion fraud was due to a single trader using “plain vanilla” hedges on European stock-market indexes, whatever.

Personally, if they would have said subprime losses it would have sucked but this just makes it worse. You mean one guy can rack up over USD 7 billion in losses and not one person noticed within Soc Gen?  Maybe the risk managers were too busy evaluating risk on CDO squared products.

What’s even funnier about this whole situation is that Risk magazine (yeah, about as exciting as watching paint dry) just award Soc Gen as the Equity Derivatives House of the Year for their risk management.

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