In the wake of JPMorgan’s ill-conceived hedging strategy, which cost the bank its sterling reputation along with $2 billion and counting, Advanced Trading decided to highlight some of Wall Street’s worst bets ever.
May 21, 2012
5. Jerome Kerviel, Soceiete Generale
The former Societe Generale trader had the starring role in worst trading scandal in France’s history, taking on risky positions that ultimately cost his old employer more than $7 billion. Over a two-year period, Kerviel carried out billions of dollars worth of bad equity arbitrage trades that nearly sank France’s second-largest bank. He was sentenced to a three-year prison term and fined $6.7 billion following convictions for breach of trust, forgery and unauthorized use of SocGen’s system for his trades. But Kerviel contends that although he traded outside SocGen’s limits, his superiors turned a blind eye when his bets were turning a profit. He is appealing his convictions.
