French Trader Arrested in Tangled Fraud

Jan 27, 12:40 AM

Jerome Kerviel was arrested Saturday in Paris by French financial police. He had reportedly taken refuge with his brother since the story broke and has said he wants to cooperate with the investigation into his activities and those of his employer, Societe Generale.

Kerviel worked late into the night for months last year making unauthorized trades, the British newspaper, The Guardian, reported. He bought futures contracts that allowed him to make money on a falling market, using stolen passwords and other ruses to cover his tracks.

Kerviel then apparently tried to lose some money so that the unauthorized losses would balance the unauthorized gains. But he ended up losing more than he expected, the report said.

The bank made the losses even bigger, The Independent said, by dumping Kerviel's positions abruptly, more than doubling the shortfall to about $7 billion.

Kerviel's motives remain a mystery. French Trader Arrested in Tangled Fraud
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