Financial Post- French bank Societe Generale said fraud by a single trader had caused it a 4.9-billion euro (US$7.1-billion) loss and that it would seek emergency funds as a result, shocking battered markets.
If fraud is proved, the loss will be the biggest caused by a rogue trader, ahead of the US$2.6-billion hit to Sumitomo Corp caused by copper trader Yasuo Hamanaka and the US$1.4-billion loss caused to Barings by Nick Leeson, both in the 1990s. It also eclipses a US$6-billion loss racked up by hedge fund Amaranth trader Brian Hunter and his team ahead of its collapse in 2006.
SocGen, France’s second-biggest listed bank, announced plans to raise 5.5-billion euros through a capital increase to shore up its balance sheet, also reeling from a crisis in global credit markets. It unveiled a further write-down of 2.05-billion euros related to the global credit crunch on Thursday.
