Jim Sinclair’s Commentary

I smell a rat. Rogue trader sounds a lot better than SIVs. The rogue takes the hit, does one year at a country club lock-up and then gets retirement pay. To assume a trader had a position that could have made or lost 7,000 million and no one knew is raving BS.

Rogue trader to cost SocGen $7bn

French bank Societe Generale says it has uncovered "massive" fraud by a Paris-based trader which resulted in a loss of 4.9bn euros ($7.1bn; £3.7bn).

The bank said the fraud was based on simple transactions, but concealed by "sophisticated and varied techniques".

It also announced fresh losses of 2.05bn euros related to the sub-prime mortgage crisis in the US.

The losses are four times greater than those made by Nick Leeson, the rogue trader who brought down Barings Bank.

Leeson was sentenced to six-and-a-half years in jail.

Societe Generale's shares, which were suspended in the morning, lost 3.6% when they resumed trading.

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