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Kerviel / SocGen 2008 : He Hid $50 Billion Inside the Bank's Own Risk System. For Two Years — EP25 T1
Description
In January 2008, Société Générale discovered that a junior trader had built a €50 billion unauthorized position in European equity futures. Jérôme Kerviel was 31 years old. He earned €52,000 a year. The position was larger than the entire market capitalization of the bank.
He didn't hack the system. He built his career inside it — three years in the back office before moving to the trading floor. He knew exactly which controls were automated and which ones depended on a human choosing to follow up.
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This episode dissects the mechanism that made it possible: not the fake hedges, but the €1.4 billion in profit he generated in 2007 — 50 times his desk's budget — that silenced every compliance alert for two years.
75 flags. All closed. No external verification.Jérôme Kerviel was a thirty-one year old trader earning €52,000 a year. He built a €50 billion unauthorized position in European equity futures inside one of the most sophisticated risk management systems in Europe. The system flagged his account seventy-five times. Every alert was closed. In 2007, he generated €1.4 billion in profit — fifty times his desk's budget. Nobody asked how. This episode dissects the Société Générale rogue trader collapse, the PnL-driven compliance failure mechanism, and the blind spot that allowed extraordinary returns to disable institutional oversight for two years. Jérôme Kerviel. Société Générale. Rogue trader. Trading fraud. Risk management failure. Delta one derivatives. Banking compliance failure. Financial
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