Jerome Kerviel, French, was born in Pont-l’Abbé, Finistère Province, Brittany, France on November 1977. From 1996 to 1999, he obtained a bachelor’s degree in finance from the University of Nantes. In September 2000, he obtained a master’s degree in finance from the University of Lyon. In March 2004, he started to work at Société Générale.
During his tenure at the bank, he was suspected of fraud and hacking into the bank’s information data system in an attempt to cover up nearly 50 billion euros in illegal transactions between 2007 and 2008. He invested in European stock index futures without authorization. Eventually, the bank suffered a pre-tax loss of 6.3 billion U.S. dollars. He was sentenced to three years in prison.
Event Process
In April 2012, a trader from France became the person with the most debt in history, with liabilities as high as 6.3 billion U.S. dollars, equivalent to 39.9 billion yuan. The person with the most debt in the world is Jerome Kerviel, a trader at Société Générale.
Jerome Kerviel joined Société Générale in France in 2004. Due to his extremely outstanding performance, he quickly became a trader at this bank. Although his position is not high, for Jerome Kerviel, who was born into an ordinary family and was 31 years old, it is already a very rare achievement.
At the age of 31, Kerviel lost an amount equivalent to his five-year annual salary in a transaction. However, the French bank did not give him any trouble because the position Kerviel held had such extensive authority. After this incident, Kerviel became familiar with the process of false transactions. As a result, his ambition grew larger and larger, finally reaching an irreparable point.
Between 2007 and 2008, Kerviel tried to cover up illegal transactions amounting to 50 billion euros. Such a huge amount finally alerted the management of Société Générale, and finally the target was locked on the small employee Kerviel. After verification by Société Générale, Kerviel quietly invested in European stocks, causing a loss of 6.3 billion U.S. dollars to Société Générale, equivalent to 39.9 billion yuan.
Subsequently, the French banking regulatory agency, the French Banking Commission, imposed a fine of 4 million euros on Société Générale because of the “serious lack” of the bank’s internal monitoring mechanism, which led to the occurrence of a huge fraud case.
Kerviel was finally sentenced to five years in prison and had to compensate Société Générale for a loss of 4.9 billion euros. At his current salary, it will take him 200,000 years to pay off the debt. Because he became a member who triggered a “financial disaster”, he was called a “devil trader” by the media.
Character Influence
The movie “The Outsider” is adapted from the above real event. The shocking “500 billion euro trading scandal”, due to its extremely large amount, makes people suspect that the inside story is not simple. Not only is there an international uproar, but it has also become a vocational training textbook for financial institutions. Thanks to the popularity of this case, the copyrights of “The Outsider” have been sold wildly in various countries. Not only was the movie nominated for the best film at the Istanbul Golden Orange Award, but the director Barratier was also praised by The Hollywood Reporter.
The movie tells that the protagonist, Jéhrom, is from Brittany. He is lucky enough to join Société Générale. With the appreciation of his supervisor, he becomes a trader in Paris. His life leaps over the dragon’s gate and his horizons are broadened since then. The money he earns from stock price futures trading is far more than dozens of hard-working lives of his father.
Jéhrom’s father is a boiler worker and his mother is a hairdresser. With a master’s degree in finance, he seems to have a magic touch. He can always help the bank earn astonishing profits, but he is also gradually indulging in one money game after another. Jéhrom is always right in every investment as if assisted by a god. Not only does the trading amount gradually exceed his authority, but the investment amount is even more than the bank’s share capital, leading to an uncontrollable situation and triggering a crash and plunge in the Nasdaq and Dow Jones EU indexes. The bank is on the verge of collapse. The bank angrily files a lawsuit against Jéhrom. In the end, he faces a sky-high claim of 4.9 billion euros.
Character summary
The subversion by Jerome Kerviel may be fatal. It is entirely possible that the glory in financial history achieved since the Napoleonic era will no longer belong to France.
In fact, there are many ultimate “losers”like this. Some “losers” were even once praised as “genius” traders. The final outcome is also lamentable. It seems that there is only a thin line between heaven and hell.
Reproduction Notes：InvestFancy » Rogue Trader: Jerome Kerviel