By DPA
Paris : One of France’s largest banks, Societe Generale, said Thursday it has lost 4.9 billion euros ($7.1 billion) through what it called “an exceptional fraud.”
“One trader, responsible for plain vanilla futures hedging on European market indices, had taken massive fraudulent directional positions in 2007 and 2008 beyond his limited authority,” the bank said in a press statement. “He managed to conceal these positions through a scheme of elaborate fictitious transactions.”
Societe General said it would launch a capital increase of 5.5 billion euros as a result of the loss. Trading in the bank’s shares were suspended Thursday on the Paris Bourse.
The bank also had to post a write-down of 2.05 billion euros in the fourth quarter of 2007 because of losses related to the US sub-prime crisis.
Societe General said it still expected to post profits of 600 to 800 million euros for 2007. In 2006, the group recorded 5.22 billion euros in profit.