Trader Jerome Kerviel. Scapegoat or victim of greed and stress?
Beginning traders almost always need their heroes. Millions in earnings, successful careers and simply excellent personal lives of successful managers become excellent examples for beginners to follow.
However, the trading world is filled not only with positive stories with a beautiful ending, but also with stories of fall, even imprisonment.
In this article you will meet another anti-hero who deprived thousands of French investors of their money, but at the same time turned out to be nothing more than a scapegoat for an angry public.
early years
Jerome Kerviel was born in the French town of Pont-l'Abbe on January 11, 1977. The Kerviel family was far from rich and almost always teetered on the brink of poverty, since in addition to Jerome, there was also an older brother in the family, and the parents had working professions.
Money was also very difficult for my father, since his profession as a blacksmith required enormous effort and health. Also, earnings were limited due to the fact that the town had only 8 thousand residents, so both mother and father had very few clients.
Jerome Kerviel himself grew up as an ordinary boy. At school he was the simplest average student and did not show any talents other than sports.
By the way, as a child, Jerome was a rather chubby boy, so many of his peers bullied him. However, instead of becoming an outcast, Jerome went to the judo and football sections, which over time allowed him to become the undisputed leader in his class.
After graduating from school, he entered the University of Nantes at the Faculty of Finance, where he successfully received a bachelor's degree. Then he continued his studies at the Faculty of Organization and Control of Financial Markets at the University of Lumvière Lyon, where he completed his master's degree in 2001.
The teachers themselves described Jerome as a very ordinary student who studied diligently and did not waste his precious time on student pranks.
Jump into politics. Trader career
Immediately after finishing his master's degree, Jerome Kerviel decided to show his oratorical skills in politics.
He was inspired to do this feat by the then acting mayor, Thierry Mavica. However, the election campaign was lost, and many noted that Jerome was not sincere and was very poor at establishing contacts with his voters.
After a disastrous start in his political career, Jerome received an offer from a large investment bank, Societe Generale, to head the standardization department, namely to work with certain traders’ reporting and monitor their transaction statistics.
After some time, Jerome Kerviel was promoted to the position of assistant trader, and literally a couple of years later he headed a department that was engaged in arbitrage through the purchase of futures on various sites for large economic indices.
Jerome's salary was about 100,000 thousand a year, but at the same time he had to manage billions of dollars. In 2008, a huge secret was revealed, and bank representatives turned to the government for financial assistance.
As it turned out, Jerome opened positions worth about $50 billion, which, after fixing the position, led to a loss of $7 billion for the bank.
A law enforcement investigation began and all ends were tied to Jerome, since he falsified documentation. The bank quickly fired the unfortunate trader and began an active campaign to whiten its reputation.
Trader Jerome Kerviel was sentenced to three years in prison and two years probation, and was fined $5 billion.
Many assessed such demands for compensation with humor, but thanks to the diligence of the lawyer, it was possible to prove that such a forgery was carried out with the participation of the bank's senior management, so the demands for compensation were removed.
By the way, after Jerome served his time, he managed to sue the bank for half a million dollars for illegal dismissal, and also wrote a book about how everything really happened.