A Rogue Trader at Societe Generale Roils the World Financial System

1193 WordsSep 8, 20105 Pages
A Rogue Trader at Societe Generale Roils the World Financial System Most Important Facts Surrounding the Case Societe Generale alias SocGen is one of the oldest and recognized financial firms in France and worldwide. SocGen employs more than 130,000 workers and has 22.5 million customers all over the world. The company is a leader in Corporate and investment banking, retail banking and financial services, and global investment management services. In the beginning of the year 2008 company faced a crisis by losing around 5 billion euro’s because of a 31 year old trader Jerome Kervial who made unauthorized trade over the preceding year for around 73# billion which is above the market capitalization…show more content…
The management system should be well structured in the means of communication and to take corrective actions against the mistakes done by the employees to overcome the fraud activities done, so that a heavy loss can be stopped from happening. If the trader goes beyond the trading limit he has to seek permission from two to three higher officials. Secondly, random and frequent checks should be implemented on the trading history of its traders. If this would have been carried out the loss would not have gone out of control. The random checking information should not be revealed to the low level employees and to be maintained secretly. Third, the computer systems should have the track of entry and deleted data. The security should be high for personal logins, like finger print technology instead of user info. With this type of security unauthorized logins can be eliminated. Evaluating each course of action The first alternative course of action, that is maintaining a proper organizational structure, this would possibly have a good and effective output but it is a bit time consuming. A change in the operations would basically take some time to carry out. The second alternative course of action will have a good output as employees will have this trade checks that will be carried out frequently and they would hesitate to do fraud activities. Frequent checks would take some production time of the

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