who is jerome kerviel 
jerome kerviel was a junior level derivatives trader for french securities firm soci t g n rale he was charged with losing more than 4 9 billion in company assets by conducting a series of unauthorized and false trades between 2006 and early 2008 when company managers discovered that kerviel had conducted tens of billions of euros worth of unauthorized trades they rushed to close out the open positions most of which were specialized equity arbitrage trades and contain the extent of the fraud several of the trades were closed out with heavy losses due to a falling market at the time of sale understanding jerome kervieljerome kerviel was born on jan 11 1977 growing up in pont l abby brittany france kerviel completed a bachelor s degree at the university of nantes in 1999 and then a master s in finance at the university of lyon in 2000 4jerome kerviel joined soci t g n rale in the summer of 2000 at the age of 23 his first position at the company was in the compliance department but in 2005 he moved to a junior trader job working with derivatives kerviel s role was to capitalize on pricing discrepancies between equity derivatives and the market price of stocks upon which the derivatives were based 4understanding derivativesderivatives are investment instruments that derive their value from another asset such as the price of corn a stock or an index there are many different kinds of derivatives such as futures options and swaps to limit risk in derivative trades a long derivative position is generally offset with a similar short position for example if a trader purchased euro stock market futures hoping the market would go up typically this bet would be offset by shorting u s stock futures to profit if markets decline as european and u s stocks tend to move in a similar fashion kerviel began making only one side of these bets kerviel and unauthorized tradeswith several years experience in soci t g n rale s back office kerviel was well versed in the company s policies for approving and regulating trading among its brokers he took advantage of this knowledge in late 2006 and early 2008 to offset his one sided bets with the opposite position that did not actually exist by creating fake trades in the system s computers and logs so the trades were not flagged by the bank s oversight systems initially these trades were profitable with so much early success kerviel feared the bank would discover the false transactions to conceal the activity he began creating losing trades intentionally to generate losses to offset his early gains managerial staff at soci t g n rale uncovered unauthorized trading activity in january 2008 and took steps to unwind the positions created by kerviel when the dust settled kerviel s losses were estimated at 4 9 billion kerviel maintains that his bosses knew about his fraudulent trades but intentionally looked the other way as he was making profits for the bank an appeals court in versailles sided with kerviel in 2016 and stated in a judgment that it was not occasional negligence but managerial choices that ensured kerviel could get away with his criminal acts 1special considerationsthere are conflicting accounts about kerviel s talents as a trader and student professors at his alma mater the university of lyon are reported to have said that he was a student just like any other 5 the former governor of the bank of france described kerviel as a computer genius but colleagues claim that he was not a star trader within their ranks 6notably kerviel is not believed to have profited personally from his reckless trading though he now falls into the infamous group of rogue traders that have collectively lost their employers billions of dollars through risky and unauthorized trading activity while kerviel s case was being considered he made a pilgrimage on foot to rome from paris to meet the pope together they discussed the problems of capitalism kerviel was convicted of breach of trust and other charges in the french court in 2010 he was sentenced to at least three years in prison and ordered to pay restitution of 4 9 billion 1 he served five months in prison in 2014 before being released 3 his fine amount was also reduced to 1 million in 2016 2jerome kerviel faqsa rogue trader is one who trades on behalf of others clients or a company and does so in a reckless manner often flouting company policy and risk management procedures the actions a rogue trader takes are usually on a speculative basis involving high risk securities and significant amounts of capital jerome kerviel does not have a positive net worth after his sentence he owed 4 9 billion but this amount was cut to 1 million in 2016 therefore he has a negative net worth of approximately 1 million euros 7jerome kerviel is currently working as an it consultant at lemaire consultants 8yes soci t g n rale is still in business it is a global financial firm with offices all over the world it is headquartered in paris the company has extensive retail banking services along with sales and trading and investment banking the bottom linejerome kerviel was a trader for the french investment bank soci t g n rale where he made rogue trades using derivatives his trades resulted in losses of 4 9 billion for the bank he was sentenced to three years in prison serving only five months and was ordered to pay fines totaling 4 9 billion but that was later reduced to 1 million 