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Jerôme KERVIEL: «Traitor Trader» ou «Bouc émissaire»? Posted by on Jun 24, 2010 in Uncategorized

SCANDAL“: A seven-letter word that somehow seems to have morphed into “le maître-mot” (the “catchword”, or the “buzzword”) in France these days.

While the affaire Anelka is still unfolding, with the new implication of Thierry Henry, accused to be one of the masterminds behind the mutinée and la grève (the strike) directed against the Coach Domenech, another scandal, relatively old, is taking a new turn today, centering around the elusive character of Jerôme Kerviel, who ought in many aspects to be regarded as an “Anelka of finance” of sorts.

The reason behind the parallel can be appreciated in light of their own roles in hastening their self-disgrace, as much as for the fact that they could also serve as a convenient bouc émissaire (scapegoat) in lieu of other prominent figures who deserve to be equally blamed, if not more.

Cela dit (that being said), who is Jerôme Kerviel, and what did he do?

His PDG (meaning CEO) at the Société Générale, Daniel Bouton, who is an Énarque (see What is an Énarque?“), has been quite at a loss to determine le mot juste which would, in his eyes, be most fitting to define his managerial subordonné (subordonate): “Cet escroc, ce fraudeur, ce terroriste, je ne sais pas.” (“This crook, this swindler, this terrorist, I don’t know.”) 

Not terribly flattering, indeed.

In fact, Kerviel has been held responsible for the highest financial loss known in l’histoire de France, estimated at 5 milliards d’euros (5 billion euros), and is only overshadowed into second place on the interantional scene by New York’s veteran Ponzi schemer Bernie Madoff, whose fraudulent investment fund caused l’évaporation of about $18 billions.

The other widely-known mammoth financial fiascos include le Canadien Brian Hunter’s in 2006 (almost $7bn.); Crédit Lyonnais vs. Giancarlo Parreti, l’homme d’affaire (the businessman) who aspired for long to put his hands over the famous société de production Metro-Goldwyn-Mayer in 1990 ($5 bn.); LTCM’s John Meriwether in 1998 (almost $5bn); and finally, to name un cas célèbre (a famous case), Nick Leeson, l’Anglais (the English) who is credited with la chute (the downfall) of the oldest banque d’investissement (investment bank) in England in 1995, the age-old Barings bank!

Kerviel is a 33-year old Breton, which means that he is from the region of la Bretagne (Brittany.) He joined Société Générale exactly ten years ago, and started as an opérateur de bourse (or “trader”, which is also a usual term in France), dealing with the highly speculative produits dérivés financiers (financial derivatives), the very same instruments which are targeted as of late by the ministres de finance européens as a protective measure, especially in Germany

De manière plus spécifique (more specifically), Kerviel is accused of having exceeded his authorité, by trading undetected amounts that even dwarfed la capitalisation boursière (the market capitalization) of his company. He was seemingly able to accomplish all that thanks to an elaborate système de fraude which masked the true volume and size of his trades.

Today, mardi le 24 juin 2010, the judge sentenced him to cinq ans de prison (five years of prison.)

Jerôme, however, has always maintained that his superiors ont du savoir (must have known) about his trading bets, that they even profited from them, and that he was finally designated as nothing more than an expandable “bouc émissaire“, mainly to divert the general attention from the fact that the company had heavily lost on the subprime market: A key information which happened to be released le même jour (the same day) as the “scandal Kerviel” was publically announced.

That and more he explains in his book, which came out last month: “L’engrenage: Mémoires d’un Trader (“Gears: Memoires of a Trader.”)

Finally, and sur un ton moins grave (on a lighter note), here are a few  “fun facts” and blagues about le phénomène (the phenomenon) Kerviel!

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  1. Secil:

    France is famous for wine making, will we have a chance to read something about some of many chateaus?

  2. Secil:

    Yes I forgot to mention, after the world cup of course!:)