Jérôme Kerviel worked for the second largest bank in France, Société Générale, until he went rogue and made a lot of fraudulent trades. He cleverly execute trades by sending fake emails from hacked computers. If his trades were to have been successful he would have became very rich today. But with great opportunity comes great risk and unfortunately for him his unauthorized trades costed the bank €50 billion and made him nothing 🙁 Not only has Mr. Kerviel been sentenced to 3 years in prison, but when he gets out in 2015 he has to pay back $6.3 billion to his former employer (O_o) He is now the most indebted person in the world. Not even winning the lottery can save this man now. I owe some money to the bank too, but not nearly as much as him.
We often hear about the ultra rich like Mexico’s telecom businessman Carlos Slim, currently the wealthiest person in the world who’s worth $73 billion USD. But we never hear about the people on the opposite end of the net worth spectrum. Obviously the 35 year old Mr. Kerviel isn’t expected to pay back all $6.3 billion in his lifetime, and the debt will probably be forgotten once he passes. So what will most likely happen is a percentage of any income he makes from now on will be paid towards a fund to cover his $6.3 billion fine.
I think what we can take away from this story is to be careful with how much risk we take on as it could leave us in a whole lot of debt and tarnish our credibility, and even future earning potential. And on a side note maybe the whole idea of net worth isn’t a reliable barometer to define how financially well off someone is. A homeless person with no savings or financial assets is literally over 6 billion dollars richer than Mr. Kerviel, at least on paper. But because of Kerviel’s connections, education, and work experience, I don’t think he’ll be living on the streets any time soon. Maybe the idea of quantitizing wealth, (AKA net worth,) isn’t to compare how rich or poor everyone is relative to each other, but is only meant to gauge how each individual is progressing with their own personal finances 😀