February 1, 2008
Unacknowledged Trading Genius
Kerviel Felt Out of His League
“… if clawing your way up from the mailroom wins you a badge of honor in the U.S., not so within in the rigid class system that defines the upper ranks of French finance. Mr. Kerviel’s effort to impress his colleagues now appears to be a motivating factor behind his disastrous trading spree.
‘I cannot believe that my superiors did not realize the amount I was risking,’ Kerviel said in the interrogation. ‘It is impossible to generate such profit with small positions. That’s what leads me to say that while I was [in the black], my supervisors closed their eyes on the methods I was using and the volumes I was trading.’”
I call bullshit, Jerome. If you’ve got other SocGen traders killing themselves after being so harshly reprimanded for losing a lousy €9 million in unauthorized trades (”He took his bag, left Société Générale and jumped off a bridge” [I loved that line, lol]), there’s no way management would look the other way when you’re making multi-billion euro one-way bets.
Wall Street firms have a mix of PSHs (”poor, smart, hungry”) and RDLs (”rich, dumb, lazy”). The latter (about half of new hires) tend to be somebody’s nephew/niece, or very good looking, or both.
Back in the early 1990s, I talked with a top headhunter in Hong Kong about working for a bank as a trader, and she said, “Forget about it, they only hire pretty girls, and you’re neither pretty nor a girl.”
February 1st, 2008 at 12:41 pm
Back in the early 1990s, I talked with a top headhunter in Hong Kong about working for a bank as a trader, and she said, “Forget about it, they only hire pretty girls, and you’re neither pretty nor a girl.”
Lehman Brothers?
February 1st, 2008 at 2:47 pm
lol that’s so true
February 1st, 2008 at 3:03 pm
Sorry for being blunt, but what was your choice then? How do you make a living in Beijing?
February 1st, 2008 at 3:17 pm
@akikana: Not Lehman; it was a British bank which will remain unnamed.
@Brian: Are you familiar with the pretty girls at Lehman Bros? :)
@Markus: Choice of employers you mean? It turns out I had no choice so I came home and made photocopies in a basement for a few years. I make my living now the old fashioned way: from dividend checks (and newsletter subscription income, which currently brings in $0000.00 a month).
February 2nd, 2008 at 5:31 am
I wonder what is bullshit; what a junior trader is saying or bank management which failed to notice. No matter what the motivation is this is the utter failure of quality control issue, IMO. I understand if the guy is a C-level exec or super trader but darn no one even knew who he was until now. He duped everyone above his level for so long? Is there something called an audit? Anyhow, one thing clear is it’s all French. How sophisticated they are!
February 2nd, 2008 at 7:10 am
jsp: It’s interesting, I’d love to hear someone at Goldman Sachs or Morgan Stanley explain why it could never happen to them — why their systems and controls are that much better, their audits are more thorough and complete, etc. etc. I’m still waiting.