Jérôme Kerviel lost $6.7B at Société Générale — the largest rogue trading loss ever

Jérôme Kerviel was a junior trader in Société Générale's Delta One group, a desk that trades equity index futures and other derivatives. His job was to execute arbitrage strategies that profited from small price differences between similar instruments. The positions were supposed to be hedged and low-risk, with strict limits on how much directional exposure he could take.

Kerviel systematically exceeded those limits, building up unauthorized directional bets worth €49.9 billion on European stock index futures — the DAX, Euro Stoxx 50, and FTSE 100. He hid the positions by creating offsetting fake trades that appeared to hedge the risk, but were entered into the system with future dates that would never be checked. He closed some positions within two to three days, just before the bank's internal control systems would flag them, then reopened them elsewhere. The bank's risk models showed his desk as flat to the market every day.

Société Générale discovered the fraud on January 19, 2008, and began unwinding the positions over three days starting January 21 — a period when global equity markets were falling sharply. The loss reached €4.9 billion ($6.7 billion at the time), more than the bank's entire market capitalization. Kerviel was convicted of breach of trust, data forgery, and unauthorized computer access, and ordered to repay the full €4.9 billion — a sum the bank itself called symbolic. The restitution order was later overturned by France's highest court, and he served less than five months.