What a difference a few days makes. Jerome Kerviel, who last week was the most famous name in finance for supposedly sticking French Bank Societe Generale with a $7 billion loss, is still burning up the business pages.

While his immediate whereabouts weren't all that easy to nail down, Kerviel ended up questioned by police and remains under investigation but out on bail while authorities try to figure out exactly what happened. That may well involve some deep questioning of the version of events that Societe Generale has been pushing.

Based on Kerveil's actions it does not appear that he overstepped his bounds as a trader, rather than made any attempt to commit fraud upon the bank. This let him skate on the most serious charges. Beyond a juicy salary bonus he stood to gain from profitable trades, personal wealth doesn't seem to have been his primary goal.

While the bank claimed to have only discovered Kerviel's actions in the last few days, that claim doesn't exactly jibe with the report from Eurex, the European futures and options exchange, which apparently stepped in to question trades by Kerviel back on November of 2007.

Setting aside the fact that Kerveil was able to place what appear to be unapproved trades and then hide the dismal results, it appears that Societe Generale's rapid dumping of Kerveil's positions was in part responsible for their losses.

In a potentially related note, Societe Generale shareholders are roiling over potential insider dealings. Eight days before the Kerviel trading scandal erupted, Robert A. Day, an SG director dumped more than $1million in Societe Generale stock. Day's people claim the transactions are related to SG losses in the sub prime market, but well, appearances count, right?

Meanwhile, French PM Nicolas Sarkozy has made it fairly clear in the media that he expects senior executives of Societe Generale to resign over the whole affair.

-- MDT

Labels: Jerome Kerviel, Kerome Kerviel, Societe Generale