New York (HedgeCo.Net) – French officials have arrested a trader who allegedly lost more than $1 billion in complex derivative trades.  Boris Picano-Nacci of mutual bank Caisse d’Epargne was taken in for questioning last week, days after the loss forced the bank’s top three executives to part ways. 

Prosecutors in Paris are currently investigating whether or not they can nail the 33-year-old trader for a possible breach of trust. 

A copy of the bank’s internal investigation was said to have been obtained by French news magazine Nouvel Observateur, when they published the findings on Wednesday.   
According to that report, Caisse d’Epargne found lax internal controls and several alerts that had been disregarded.

The bank has stated that this was an error made by a small team of traders, who made a bad bet on the direction of the stock market while exceeding their trading risk limit. 

French Finance Minister Christine Lagarde revealed that an initial investigation had uncovered “serious holes” in the bank’s controls. 

This is the second trading scandal to rock a French bank this year.  Societe Generale made headlines in January for its $7 billion loss thanks to 31-year-old rogue trader Jerome Kerviel.

Caisse d’Epargne is currently planning a merger with French mutual lender Banque Populaire.    

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

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Reuters- Former Samsung Group chief Lee Kun-hee, one of South Korea‘s most powerful businessmen, was handed a 3-year suspended jail sentence on Wednesday for tax evasion, but was cleared of other charges.

The court also fined Lee 110 billion won ($109 million), more than double the amount of taxes he evaded, but cleared him of charges of breach of trust and illegal issuance of bonds aimed at transferring wealth to his children.

His jail sentence was suspended for five years.

Analysts and experts had expected Lee to escape prolonged jail time because judges have often been lenient to South Korean corporate leaders convicted of white collar crimes on the basis that putting them behind bars could hurt business.

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