SocGen trader fired for risky bets claims he has been made a ‘scapegoat’

A former one Societe Generale A trader who was fired for unauthorized risky bets has criticized the French bank for making him a “scapegoat” and failing to take its share of responsibility for missing trades.

Kavish Kataria, who was fired from the bank’s Delta One desk last year, said profits and losses on his trades were reported daily to superiors on his team in Hong Kong and to those at the Paris headquarters, while a daily email about the transactions was also sent.

“Rather than take responsibility for the flaw in their risk system and not identifying the transactions at the right time, they fired me and terminated my contract,” Kataria said on a LinkedIn page. after Thursday.

The comments come after SocGen confirmed earlier this week that Kataria and team principal Kevin Ng were fired last year following an internal review of their dealings. A spokesperson for SocGen declined to comment on the post but issued a statement regarding the couple’s dismissal.

“Our strict control framework enabled us to identify a one-off trading incident in 2023, which had no impact whatsoever and led to appropriate remedial action,” the statement said.

Although SocGen didn’t lose money on the trades, losses could have reached hundreds of millions of dollars if there had been a market downturn, a person familiar with the matter said. told the Financial Times.

Kataria had been trading options on Indian indices, which he was not allowed to do, the person said. However, because most transactions were intraday, they were not immediately detected, the FT reported.

Kataria said the transactions were posted automatically and that “a daily email was sent to the entire group stating that the transactions had been reconciled.”

“It is very easy for other people to say that we were not aware of the transactions I made,” he wrote. “This means you haven’t done your job well, or you’re not suited for it.”

Kataria joined the Hong Kong bank in 2021 and claimed to have earned $50 million for the agency in the past eight months alone.

In his LinkedIn post, he called for better regulation after he was fired with seven days’ salary and his bonus from the previous year was withheld.

“The trading sector is so big, but there are no rules or regulations that fight for justice for the traders,” he said.

Risk management is a crucial area of ​​focus for banks, and SocGen remains scarred by the €4.9 billion in losses incurred in 2008 by ‘rogue trader’ Jerome Kerviel, who worked at the same derivatives desk as Kataria.

The French bank reported a lower-than-expected 22% decline in first-quarter net income on Friday, as gains on equity derivatives sales offset weakness in its retail bank and fixed income trading.