New Poster Child for Corporate Blunders

Back in the 90’s there was good’ol Nick Leeson, lead trader at Barings Bank that took a trading account minus $2 Billion and managed to hide it for a few good months.  Then everything caught up with him.

It’s rather interesting that Nick Leeson is now a speaker and seems to be advising people on “Stress Management” –something that he handed out very well while at work at Barings Bank!

It’s announced today that he’s handed his batton to a new leader at the insurance and financial giant Societe Generale, the French behemoth.  Now there is a new role model in the game and this time the stakes are just a tad bit higher. The institution needs to “write off” $7.2 Billion dollars to offset the losses of its rogue trader who has admitted to the scandal.

At this time there is no announcement regarding the name of the nice guy or gal.  I’ll make no assumptions here.  What I found incredible was the the massive fraud was uncovered over the weekend. And in today’s announcement, the French Financial giant said “We are in the process of dismissing the Paris-based trader” –So, after 5 days of knowing it and after the trader admitted the problems, they are in the process of firing the guy.  Nice pace.

This goes to a post I made a while back at my investment site, NEXT SuperStock >> –where is all this money coming from and where does all this money go?  If the trader “lost” the money, it has to go somewhere.  Basically, the trader made a bet, and lost.  That means there is a winner somewhere else.  So, while there was a loss at Societe Generale, there was a considerable gain to an underwriter of securities.

The next item is even more incredible:  The bank will “write off” said amount they lost.  Write off?  What a convenient term to say that “We * (insert you favorite derogatory term) up, bigtime!”

If you ask me, it seems that the capacity to make blunders are facilitated by the ease in which people are allowed to manage money.  It’s all “easy come, easy go” and the poor working people pay for all these blunders, made by Presidents down to coprorate money managers –the price is paid off the working backs, of common, decent working people, as they slave away from day to day earning a living.

It seems to me that the “hardships” need to be endured by these corporate CEO’s and traders on a regular basis to understand how tough it is to make the money in the first place.  Perhaps, only then will they take the responsiblity and not gamble with it.

Rich Sage