How 1 trader hid $70billion from the bank!

11 Apr 2026 · 1 min

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In this narrated monologue, Dan Novaes recounts the 2008 Société Générale scandal involving trader Jérôme Kerviel. Kerviel, a back‑office employee, exploited his deep knowledge of the bank’s trade‑verification processes to create massive unauthorized positions that at their peak were valued at over $70 billion—more than the bank’s market capitalisation. He concealed these bets by fabricating offsetting fake trades, evading detection for months. When market conditions turned in early 2008, the hidden positions generated losses that forced the bank to unwind them rapidly, resulting in a $5 billion hit. Kerviel was arrested and convicted, but the episode highlighted a critical vulnerability: a single insider who fully understands internal controls can bypass them, exposing systemic risk despite apparently robust procedures.

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In 2008, one trader lost $5 billion and almost brought down one of the oldest banks in the world. His name was Jérôme Kerviel. The bank was Société Générale. Kerviel wasn't a senior executive. He wasn't even supposed to take big risks. But he knew the system. He had worked in the bank's back office. He understood how trades were checked and how to hide them. So he started making unauthorized bets, massive ones. At one point, his positions were worth over $70 billion. That's more than the entire bank's value. But no one noticed because he created fake trades to cover the real ones. For months, it worked until the market turned. Losses started piling up fast. The bank discovered everything in January 2008. Panic! They had to unwind his positions immediately. That's when the real damage happened. Selling everything at once during a falling market. Total loss: $5 billion, all from one employee. Kerviel was later arrested and convicted. But the bigger shock was this. The system didn't fail because it was broken. It failed because one person understood it too well and knew exactly where no one was looking.