×

Timeline of Events in SocGen Fraud Case

The following is a timeline of events concerning the alleged fraud at Societe Generale (SocGen) that caused $7 billion of losses at the French bank.

No Title_22817817

* 2007 - SocGen junior trader Jerome Kerviel starts building up large positions. As his losses mount he tries to cover up his positions by misappropriating the bank's computer systems.

* Jan 18, 2008 - SocGen shares plunge 8.2 percent in the last hour of trading, with traders and fund managers citing market speculation of huge write-downs at the bank.

* Jan 18 - The International Herald Tribune runs a report on its Web site saying that Bank of France Governor Christian Noyer has been monitoring the balance sheets of banks such as SocGen. The Bank of France later denies that Noyer ever mentioned the names of any specific banks when he made his comments.

* Jan 18 - Later that evening, a compliance officer notices a trade that has breached one of the bank's thresholds. The officer telephones another brokerage, with which SocGen had apparently made the trade, and is told that the firm has no record of any such transaction taking place.

* Jan 19/20 - On Saturday, SocGen senior executives begin investigating suspicious trades which are traced to Kerviel. The trader is hauled in and top management questions him.

* Jan 20 - Kerviel is questioned by the SocGen board.

* Jan 20 - Bouton says he informs the Governor of the Bank of France and the head of France's AMF stock market authority when he learns of the situation.

* Jan 20 - Kerviel, who is told by the bank after questioning that it plans to dismiss him, leaves. SocGen fails to hand him over to the police. Bouton later admits, at a news conference, that "perhaps we made a mistake in that respect".

* Jan 21 - As people return to their trading desks after the weekend, SocGen management decides to liquidate Kerviel's positions. Equity markets plunge that day, with many stock indexes suffering their worst one-day close since the terror attacks of Sept. 11, 2001.

* Jan 21 - SocGen's decision to close down the position in a falling market means the bank makes even more of a loss than it would have done in a more usual market environment. Market traders later wonder if the SocGen rogue trader was partly responsible for the global equity market slump.

* Jan 22 - The U.S. Federal Reserve stuns markets by announcing an emergency interest rate cut. It later says it was unaware of the SocGen rogue trader situation when it made its decision to slash rates by 75 basis points to 3.5 percent.

* Jan 23 - SocGen shares fall sharply again, closing down 4.2 percent. Traders and fund managers cite fresh rumors of write-downs at SocGen. Market speculation also swirls that some top SocGen bankers might have left the bank.

* Jan 24, 7 am London time - SocGen issues a statement saying it has uncovered a fraud resulting in losses of 4.9 billion euros. It says Bouton and Jean-Pierre Mustier, head of investment banking, tendered their resignations but these were not accepted. It also announces plans for a 5.5 billion euro capital increase.

* 10 am London time - SocGen holds press conference to discuss the fraud. Bouton says the bank does not know the whereabouts of the trader whom it does not identify.

* 3:25 pm London time - SocGen sources identify the trader as Kerviel. A photo of Kerviel from the SocGen internal website is soon circulating around dealing rooms and fund management houses in Paris.

* 3:37 pm London time - SocGen issues a statement saying it has filed a formal complaint with the Nanterre Public Prosecutor against the trader. The complaint is based on three main charges: fraudulent falsification of banking records, use of such records and computer fraud.

* 6:31 pm London time - A source from the U.S. Federal Reserve says U.S. central bank did not know of the rogue trader scandal at SocGen when it made an emergency interest rate cut during that week.

* Jan 25 - French police carry out searches of the home of Kerviel and of the headquarters of SocGen.

* Jan 26 - Kerviel is taken into police custody in Paris.

* Jan 27 - SocGen issues a statement with further detail of how the fraud occurred. The bank also says the trader had ended up with a position of 50 billion euros which SocGen decided to unwind from Jan 21-23.

* Jan 28 - SocGen Chairman Daniel Bouton told Europe 1 radio station that an offer he had made to resign in light of the bank's trading scandal "remained on the table."

Bouton offered his resignation to the SocGen board but the board did not accept it, saying it wanted him to stay on and sort out the situation.

"The board has asked me to stay. Of course, my resignation offer remains on the table. The board will decide to examine it when it wants," Bouton told Europe 1.

On Monday, Bouton told Europe 1 that the "real losses" were 4.82 billion euros.

* Jan 28 - Jerome Kerviel is freed pending further investigations after prosecutors failed to persuade judges to proceed with a full-scale fraud probe.

* Jan 28 - French Nicolas Sarkozy puts pressure on SocGen's top managers by telling them they would have to accept their share of responsibility for the world's biggest trading scandal, thereby putting pressure on SocGen's executive chairman to step down.

"When you have a fat salary, no doubt entirely legitimate, and then a big problem crops up, one cannot expect to wash one's hands of responsibility," Sarkozy said.

* Jan 29 - French Finance Minister Christine Lagarde tells LCI television SocGen is in "a crisis situation" and called for the bank's board members to consider the leadership role.

"In a difficult moment, the board members are there to decide if the person in charge is the best placed to run the ship when it is pitching a bit, or whether they should change the captain," the outspoken Lagarde said.