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Strategies & Market Trends : Technology Stocks & Market Talk With Don Wolanchuk

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To: Jacques Tenzel who wrote (29400)	1/25/2008 10:24:10 PM
From: Chip McVickar	of 208149

UPDATE 1-SocGen on 48-hour post-fraud dumping spree -sources By Sudip Kar-Gupta and William Kemble-Diaz PARIS/LONDON, Jan 25 (Reuters) - French bank Societe Generale (SocGen) (SOGN.PA: Quote, Profile, Research) conducted a dramatic market sell-off operation in 48 hours after discovering a massive alleged fraud at the bank, traders and fund managers said on Friday. Sources close to French banks said SocGen had been nursing losses of 1-1.2 billion euros when it discovered the fraud on Friday. It subsequently unwound more than a million Eurostoxx stock index futures contracts from Jan. 21 to 22, bringing the hit to 4.9 billion euros ($7.2 billion) by Thursday. Estimates for the value of the dumped contracts ranged from 20 billion to 70 billion euros ($29-$103 billion). "What's emerging is that SocGen was brutal in the way it unwound its positions," said a trader at an investment bank. The trader, like others sifting through the turmoil left by SocGen's losses, declined to be named because of the sensitivity of trading and banking relationships. It is not clear whether the Bank of France instructed SocGen to unwind the positions immediately, or whether it was seeking to avoid the same fate as failed British bank Barings. "It's possible they learned some lessons from what happened to Barings. It prevaricated as it negotiated with the Bank of England, and positions moved further against it," he added. reuters.com

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