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Patrick Boyle On Finance
Won't Somebody Please Think of The Traders??
May 4, 2024
Kavish Kataria, the trader involved in unauthorized risky options trades, criticized leadership on LinkedIn. The podcast delves into scandals at the Delta One desk, compares previous incidents, and discusses the aftermath and reforms in risk management.
17:40
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Quick takeaways
- Unauthorized trades can lead to massive losses, as seen in Societe Generale's $5.2 billion scandal in 2008.
- Risk management discrepancies and inadequate systems can facilitate rogue trading behavior, as highlighted in the recent Delta One desk incident at Societe Generale.
Deep dives
The Jerome Curviel Rogue Trading Incident at Societe Gen
In 2008, Societe Genorale faced a $5.2 billion loss due to unauthorized trades on their delta-1 trading desk by rogue trader Jerome Curviel, who amassed a $50 billion position in Eurostock's futures. The discovery of the unauthorized trades on a day called Black Monday led to S&P futures trading limit down and an emergency meeting by the Federal Reserve to slash interest rates to prevent a stock market crash. Curviel was sentenced to prison but only served five months, claiming innocence and portraying himself as a victim of a broken system.
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Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode