Two news surfaced today that I had covered a long time ago in October and November 2012. By a strange coincidence, both came out of France.
In the first, I used the murderous rampage of Mohamed Merah that occurred in March 2012 to write a Post on the futility of racism and other discriminations using the similarities between the shooter and one of his victims, French paratrooper Mohamed Legouad. Today March 19 is the sad anniversary of the last killings of Mehra at the entrance of the Toulouse Jewish school Otzar Hatorah. Mehra, having sworn not to be taken alive, was killed 3 days later ( 22nd ) by a RAID ( police special unit ) sharpshooter as he tried to evade the assault on his apartment by jumping off the balcony. A year later, the post in question is still worth reading, I believe :
http://definitivelapseofreason.com/2012/10/25/one-rosenberg-two-rosenbergs-and-then-two-mohameds/
The second Post appeared two weeks later and concerned the ridiculous plight of Jérome Kerviel. He was a trader with the Société Générale that in early 2008 lost 4.9B Euros ( 7B$ ). This incredible amount was the result of the investment bank closing all transactions of his. You should read the post to understand the ridicule :
In essence, the Société Générale argues that Kerviel had made fictitious trades in equity derivatives arbitrage and that these grew from small amounts in late 2006 to the incredible sum above by January 2008. Jérome defended himself by showing that he had not personally profited from the deals which the investigation with which he fully cooperated backed. Nonetheless, the bank filed a lawsuit against him for the full amount and penalties. The French State however rejected the charge of attempted fraud and indicted Kerviel on abuse of confidence and illegal access to computers still worth 3 years in jail. In essence, this shows that the judges do not believe the trader to have acted “against” the company? My personal opinion being simply that there is no way the bank could have let so much trade go on without approval and knowledge of the facts, barring which you should not invest your money in a firm that knows not what its employees are really doing with your cash?
The initial trial found Kerviel guilty and sentenced him to 5 years in prison of which 2 suspended, a ban from ever practicing in financial services again and … full restitution of 6.7 Billion bucks!
An appellate court in October 2012 upheld the conviction and Kerviel at the time of my post up there was appealing to the High Court. The verdict fell today : the prison term is still valid but the money will not have to be repaid? Jérome Kerviel learned the news on the road between Rome where he met Pope Francis and Paris to where he is walking back as a pilgrimage against the tyranny of the markets.
AFP image from the BBC
Click for link
or link with video below :
What’s next? For Kerviel, it will be jail but for the bank, there will be a civil case brought about to fix an amount to be obtained and paid back. This raises many smaller points. The trader’s lawyer sees an opportunity as the bank’s responsibility was considered by the High Court as engaged which is why the “fine” was dropped. In all logic, there should now be a case opened on their doings? Another interesting thing is that the investments made by Kerviel were actually much bigger than the loss. 6-7B$ was what it ended up costing but the volume of trade on which this amount was lost is evaluated at 38B Euros or +- 50B$? What do you think, dear reader? Do you find it reasonable that a financial organization would let a junior trader paid less than 200 000$ with bonus manage 50B$ without any kind of supervision? If it really happened that way, don’t you think that they should be sued for malpractice as a doctor would for a botched operation?
Said another way, if Jérome Kerviel goes to prison for 3 years and no one else is held responsible won’t it be another case of the permanent difference in treatment and Justice between the small man, the citizen and the corporations or the government. Steal a chicken then lie about it and go to jail. Steal a billion and lie always and go from CEO to running for office?
Just wondering … Tay.
Definitive Lapse of Reason 