PARIS: As panic swept European markets last Monday, word spread that a big hedge fund was in trouble and dumping stocks.
Someone was selling, all right - Société Générale. The French bank was frantically unwinding an estimated $75 billion of bad bets on European stocks that the bank said was placed by a rogue trader, Jérôme Kerviel.
As the bank struggled Friday to determine how someone could have run up $7.2 billion in losses before anyone caught on, the scope - and global effect - of the fraud began to emerge.
From his desk in the middle of the trading floor on the sixth floor of Société Générale's Alicante building in the La Defense business district outside Paris, Kerviel, 31, took huge bullish positions on the Dow Jones Euro Stoxx 50 index and the German DAX in particular, according to a fellow trader still working there who insisted on anonymity.
photo: Société Générale's efforts to stem losses last week may have exacerbated plunging stock markets (Benoit Tessier/Reuters)
