Okay if you’re like me you’re reading the headlines on a daily basis. Check that - you’re devouring them. China’s economy is soaring as they prepare their country, not to mention their congested highways for the upcoming Olympics. The economy in the US, well let’s just say on this side of the pond it’s flatlining at the moment, and for other news well there’s a junior trader with a major issue.
The name? Jérôme Kerviel. The place? France. The issue? $7 billion! How could one person instigate billions and billions in losses? How could one person cause such overwhelming damage to one company? I’ll give you the answer. Deception. Faux. A fraud.
And this is what I don’t quite understand. If someone is that shrewd, that smart, and say it with me now - deceptive and manipulative, why not use that ability for good rather than evil?
Perhaps it’s myopic of me to say. Maybe in that business as a trader it’s an insurmountable high; a fallacy if you will as the stakes get higher so do the trades. Fictitious trade after fictitious trade, perhaps he needed to be micromanaged? Apparently the fake trading increased in frequency and size therefore heating up the charts. My question is this: how will companies prevent this from happening again? What are the internal controls when a junior trader is mixing it up and hiding some trades and canceling others? Hmmm.
