Insights/Questions about the macroeconomics of Societe Generale's Rogue Trader

Nov 10, 2008 0 Replies

Jérôme Kerviel was a rogue trader at Societe Generale (SG). His trades cost the firm about $7.2B. However, there must have been a myriad of companies that profited from these trades. I would think that there were, let's say for argument's sake, that 1000 companies saved about $7,200 (or increased their earnings by this same amount). If my hypothesis is correct, than which companies profited?



It seems that the markets punished share prices when *ONE* company lost billions of dollars, but they did *NOT* reward as much the shares of the many companies that profited by a few millions here and there. Another words:



The reduction in market capitalization of SG < The aggregate gains of all the companies which profited from these rogue dealings.


Please clarify and enrich us with questions/comments.


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