Date Posted:00:41:24 01/24/08 Thu Author:Bob O. Link Subject: SOCIETE GENERALE REPORTS $7.1 BILLION TRADING LOSS FROM "FRAUD"
Societe Generale reports $7.1 bln trading loss from "fraud"
By Steve Goldstein
Last update: 2:28 a.m. EST Jan. 24, 2008
LONDON (MarketWatch) -- French bank Societe Generale on Thursday said a trading incident resulted in a 4.9 billion euro ($7.1 billion) loss after an "exceptional fraud" committed by someone who usually trades plain-vanilla and European stock index futures.
It also said it was taking a 2.05 billion euro write-down, with 1.1 billion euros coming from U.S. residential property, 550 million euros coming from the U.S. bond insurers and 400 million euros in additional subprime-related risks.
It will earn between 600 million and 800 million euros for the year. The board rejected the resignation of CEO Daniel Bouton. It's going to issue 5.5 billion euros in preferred securities underwritten by J.P. Morgan to boost its capital.