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BANKING

French rogue trader handed €315 million fine

A court in Paris has ordered a former trader at French bank Caisse d’Epargne to repay an eye-watering €315 million in damages and costs to his former employers after he cost them a mammoth €751 million in failed deals.

French rogue trader handed €315 million fine
Boris Picano-Nacci, entering court in Paris for the first day of his trial on December 3rd, 2012. He was convicted of 'breach of trust' on Monday. Photo: Joel Saget/AFP

The court heard that in 2008, at the height of the financial crisis, Boris Picano-Nacci continued to carry out ‘proprietary trading’ in spite of a company-wide ban on the activity, which involves using the institution's own account to trade, rather than that of a customer.

The 37-year-old, who at the time dealt with derivatives, secretly persisted in the high-risk practice and only confessed to his bosses in October of that year, according to French media reports on Monday.

It was only after he owned up, and when his managers wound up all his deals, that the bank discovered the massive losses of an estimated €751 million.

At his trial in December last year, Picano-Nacci had denied any legal violation, though he accepted that his actions had amounted to professional misconduct.

On Monday he was convicted of breach of trust and ordered by the court to reimburse the bank a total of €315 in damages and costs. He was also handed a suspended two year jail sentence.

Reacting to the conviction, a lawyer for Caisse d'Epargne insisted that if Picano-Nacci couldn’t personally pay back the entire €315 million, he must at least repay more than “a symbolic amount,” according to France Info.

This is the second major ‘proprietary trading’ scandal to hit France in recent years. In October 2012, Jérôme Kerviel lost his appeal against a 2010 conviction for breach of trust. In 2008, his unauthorized trading resulted in the loss of €4.9 billion for his former employer, Société Générale.

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SOCIÉTÉ GÉNÉRALE

France’s Societe Generale to cut 1,500 jobs: report

French banking group Societe Generale is planning to cut 1,500 positions in its BFI corporate and investment banking arm, Le Figaro newspaper reported on Saturday.

France's Societe Generale to cut 1,500 jobs: report
Societe Generale CEO Frederic Oudea at the Climate Finance Day and Global Roundtable in Paris on November 26, 2018. Photo: ERIC PIERMONT / AFP
Citing internal bank documents, the paper said the bank was looking at two scenarios, both of which envisage 1,500 job cuts worldwide, with around 700 of them in France.
 
The company said in a statement on Saturday it was still reviewing activities in its corporate and investor client business so it was not possible to comment on the impact on jobs.
 
“We have an ongoing dialogue with our unions and will consult them on our projects and their impact as soon as the review is completed in the coming weeks,” the bank said.
 
French CGT union representative Philippe Fournil could not confirm the information, but said the bank's management had on Thursday indicated it was still reviewing activities within that business.