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 😀
Ouch, don’t feel bad for that guy. I think once he gets out, he will con-cock another crazy idea and make money off of it under the table. He will still live the rich life because that is what our society allows people like that to achieve. You only get 3 years for screwing your employers of €50 billion. I feel much better now about the $50k that I racked up and then paid off.
He has become a huge burden on society especially if we factor in the cost of keeping him in jail. Poor tax payers of France.
Wow, talk about taking it on the chin. 😉 I would tend to agree with Grayson that he should not have too bad of a time making a living as society tends to allow it. Plus, he only got three years…a mere slap on the wrist if you ask me.
They should really change the rules of how banks operate. Unfortunately most people don’t understand how the whole convoluted system works, and most who do don’t want it to change lol. Yeah 3 years is not a very long considering what he’s done.
haha that is some serious negative NW! I wonder how much of his income will be seized, normally in France they only leave you 400 euros to live (the poverty level income) but I think he may get VIP treatment.
That’s interesting. 400 euros sounds pretty reasonable. Canada’s poverty line is a bit higher I think. I would think someone as clever as him would have saw the end coming and put some of his money away in offshore banks or at least storing part of his wealth in precious metals or art that does not have to be disclosed to officials. People refer to this as stealth wealth.
Well that sucks to be…him
I guess first on his to do list is to write a book on how he did it all. That should bring him some money to get back on his feet.
Didn’t he try to sue the bank saying not his fault?
Very similar story to Nick Leeson who brought down Barings Bank in the UK though that was only for $1.4 billion. His book was a good read.
I’m not sure but I wouldn’t be surprised he tried to sue the bank. People like him will always try to work hard and the best out of their situation. I remember when Conrad Black was placed behind bars. He made a lot of friends in there by giving financial advice to his inmates. And he wrote a book and sold many copies lol.
thats the inherent problem with banker compensation. bonuses even in the form of restricted stock grants tend to reward risk taking for the sake of short term profits. its getting better now with more banks introducing the clause to claw back bonuses down the road.
I’ve heard that traders are given incentives to take big risks as well. Even if most of the traders fail, it sometimes take one successful one to make the bank a lot of money. There is clearly a conflict on interest with some banking practices. This man’s case is a symptom of that, as well the idea that companies are allowed to become too big to fail and then need to be bailed out.
He looks like he could be a James Bond! Maybe he should market his acting skills as he must have had some level of acting skills development if his top management truted him, to pay down that un-comprehensable debt load – Cheers.
The latest bond film was pretty good. A lot of product placements, but I’m okay with that. I sometimes think about who would replace Daniel Craig after he retires his Bond role :0)
Ingesting point. Net worth is useful, But to someone that far in debt, it means nothing. He will still live an affluent life, no doubt despite his huge debt. Makes you wonder a bit…