SocGen fraud details leave traders astonished

By William Kemble-Diaz and Tom Miles

LONDON/HONG KONG (Reuters) - Incredulous derivative and equity traders still wanted answers on Monday after Societe Generale explained how a rogue trader built up a $73 billion position and caused the French bank to lose $7 billion.

Societe Generale said the trader, 31-year-old Jerome Kerviel, created fictitious accounts to make it look as though his unhedged positions had been covered, and falsified documents to cloak his actions.

"I think most people are just astonished that someone could get away with that kind of trade for so long without being noticed," said Matt McKeith, head of equity dealing at First State Investments in Hong Kong. "I'd always be slightly suspicious of the company line in these circumstances."

Derivative and equity traders were foxed by the explanation, especially since Kerviel appeared to have made no personal profit from his gamble.

"It doesn't quite seem to hang together," said a London derivatives trader with several years' experience processing trades in a bank's back office, just like Kerviel. "People are still retaining a healthy sense of scepticism."

For a story on SocGen's explanation, click

Traders variously speculated whether the relatively lowly Kerviel had a grudge against the bank, or was frustrated that he could not deal in bigger volumes, or that he was a fall guy for systemic failure at SocGen, and many still questioned whether he could have acted alone.

For a newsmaker on Kerviel, click