Jerome Kerviel is now being sentenced for what briefly ranked him among the most infamous of ethically challenged traders. A few years ago, when he was caught, investigators attributed billions in losses to his gunslinger risk-taking with other people's money. Speculation in trading circles indicated the attending scandal could mean the end for Kerviel's employer, Societe Generale. After all, lesser yet similar financial malpractice ruined the venerable Barclay's less that a decade before. What is Kerveil's fate today?
Three years in jail and an order that he pay restitution to the tune of 7 billion euros, according to the BBC (http://www.bbc.co.uk/news/mobile/business-11474077).
Ah, here we see a clear sign of the power of inflation to turn yesterday's gasp into today's yawn. Evidently, as the BBC article concludes, what Kerviel gambled and lost is rounding error compared to the hundreds of billions lost in the American subprime mortgage market. Thus, at least in France, there appears to linger a perception that America can still outperform Europe.
It is interesting that the court finding Kerveil guilty absolved his employer of any responsibility for fostering a no-holds-barred, don't ask don't tell arena -- as long as the financial trades were yielding profits. It does seem Societe Generale will not escape paying some fines for failures of due diligence, i.e., for failing to institute reasonable checks to limit the impact of unreasonable actions. Unlike Barclay's, however, Societe Generale shows every sign of emerging intact from the catastrophic loss and scandal.
Why? Is it because the French are more forgiving that the British? Or is it because an accident of fate just happened to bring out so many financial misdeeds to public attention around the same time that Kerveil's misdeeds faded away by contrast? Lesson for malefactors: If you must sin, do try to time it so that other sinners are acting more prominently at the same time. It will lessen not only perceived villainy but also your punishment. Could a book deal be far behind?
-- Nick Catrantzos
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Nick Catrantzos + Tom Goff
- All Secure
- NICK CATRANTZOS is the lead author of the All Secure website and is the emeritus security director for a large public organization. He has also managed security aspects of corporate takeovers, response to international hostage situations, and finding and keeping secrets. He has been board certified in security management, licensed as a private investigator, and certified as an incident commander. He worked as a case officer for a discreet branch of public service. He protected stealth technology at Lockheed and, later, as a consulting security director for both Kroll and Control Risks, he assisted executives with workplace violence cases and with protecting VIPs and critical assets globally in volatile areas. Nick's partner, TOM GOFF, was a captain in the Military Police Corps, U.S. Army Reserve and has a law degree from the University of California at Davis. He is a former reporter for Fortune Magazine, was senior editor at New York Magazine and Esquire, and has provided crisis and communications counsel to senior executives at Fortune 500 companies, including Lockheed, ARCO, Microsoft, Nissan, and Sony Pictures.