An internal investigation by Societe Generale into massive trading losses caused by a single trader has found flaws in the French bank's oversight system and confirmed an earlier suspicion, that there were no accomplices.
SocGen said last month that rogue deals by Jerome Kerviel, a junior trader at France's second-largest listed bank, had caused a 4.9 billion-euro ($7.2 billion) loss.
The report, published Wednesday, supported SocGen's previously expressed view that he acted alone.
"At this stage of the investigations, there is no evidence of embezzlement or internal or external complicity (i.e. the existence of a third party who knowingly assisted the fraudster to conceal his positions)," the report said.
"The investigations are continuing, in particular, to cover a wider area than the activities of the author of the fraud," it added.
Kerviel, 31 years old, has been placed under formal investigation for breach of trust, computer abuse and falsification and is being held in a Paris prison.
The internal report reiterated that he started building up non-authorized trading positions in 2005 and 2006 for "small amounts," but that they got bigger from March 2007 onwards.
By the time SocGen discovered what was going on in late January, Kerviel had amassed a position worth 49 billion euros, which SocGen had to unwind between Jan. 21 and 23 in an already-falling stock market.
The bank's woes have renewed speculation that it could be a takeover target for France's largest listed bank, BNP Paribas.
Analysts have said that one of the problems might have been that Kerviel was eager to please his bosses after failing to get a bonus of the same scale as his peers. The SocGen report said Kerviel got a 60,000-euro bonus for 2006. He asked for a 600,000-euro bonus for 2007 but instead received half that.
The report said Kerviel's deception included rogue deals on warrants with a deferred start date, futures contracts and "forwards" deals using a counterparty within SocGen itself.
"The General Inspection department believes that, on the whole, the controls provided by the support and control functions were carried out in accordance with the procedures, but did not make it possible to identify the fraud before January 18th 2008," the report said.
It also said SocGen was already taking measures to shore up its risk controls, including biometric security controls.
The report comes a day before SocGen posts 2007 results. SocGen said last month it expected its 2007 net profit to fall 82 percent to 947 million euros, implying a 3.35 billion-euro loss for the fourth quarter alone.
In Parisl, SocGen shares closed down 6 percent at 71.15 euros Wednesday, giving the bank a market capitalization of about 33 billion euros.
The stock is down nearly 30 percent since the start of 2008, compared with an 18 percent fall in the DJ Stoxx European bank sector. SocGen shares dropped 23 percent in 2007.