A logo outside a Societe Generale SA office building in central Paris, France, on Monday, Feb. 5, 2024.
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A former Societe Generale trader who was fired for unauthorized risky bets has lambasted the French bank for making him a “scapegoat” and failing to take its share of responsibility for missing the trades.
Kavish Kataria, who was dismissed from the bank’s Delta One desk last year, said the profits and losses on his trades were reported on a daily basis to superiors on his Hong Kong team as well as those in the Paris head office, while a daily email about the transactions was also sent out.
“Instead of taking the responsibility of the lapse in their risk system and not identifying the trades at the right time they fired me and terminated my contract,” Kataria said in a LinkedIn post Thursday.
The comments come after SocGen confirmed earlier this week that Kataria and team head Kevin Ng were dismissed last year after an internal review of their transactions. A SocGen spokesperson declined to comment on the post, but provided a statement on the pair’s dismissal.
“Our strict control framework has allowed us to identify a one-off trading incident in 2023, which didn’t generate any impact and led to appropriate mending measures,” the statement said.
Although SocGen did not lose any money from the trades, losses could have spiraled into the hundreds of millions of dollars had there been a market downturn, a person familiar with the matter told the Financial Times.
Kataria had been dealing in options on Indian indexes, which he was not permitted to do, the person said. However, because most were intraday trades, they were not immediately detected, the FT reported.
Kataria said the trades were auto-booked and a “daily email was sent to the entire group mentioning the trades have been reconciled.”
“It’s very easy for other people to say that we were not aware of the trades done by me,” he wrote. “This means either you were not doing your job properly or either you were unfit for the same.”
Kataria joined the bank in Hong Kong in 2021 and claimed he made $50 million for the desk in the last eight months alone.
In his LinkedIn post, he called for better regulation after he was dismissed with seven days’ salary and his bonus for the previous year was withheld.
“Trading Industry is so big but there are no rules or regulations which fight for trader justice,” he said.
Risk management is a critical area of focus for banks, and SocGen remains scarred by the 4.9 billion euros ($5.2 billion) in losses accrued in 2008 by “rogue trader” Jerome Kerviel, who worked on the same derivatives desk as Kataria.
The French bank on Friday reported a lower-than-expected 22% slide in first-quarter net income, as profits on equity derivative sales offset weakness at its retail bank and fixed income trading.
This article was originally published on CNBC