Yahoo Finance I demand justice for all traders, says banker sacked by SocGen for risky bets
A banker fired for making a string of risky stock market bets has called for “trader justice” as he claimed that he and his colleagues were scapegoated.
Kavish Kataria, who worked on French bank Société Générale’s derivatives desk, was sacked last week after the lender uncovered trades he had placed on the Indian stock market that had gone under the radar.
In a LinkedIn post entitled “my side of the story”, Mr Kataria said there was no “trader justice” and many were made scapegoats by large banks.
He said: “It is very easy for an organisation to put the entire blame on traders and make them the scapegoat in the entire incident.
“Instead of taking the responsibility of the lapse in their risk system and not identifying the trades at the right time they fired me and terminated my contract.
“Trading Industry [sic] is so big but there are no rules or regulations which fight for trader justice. Every time something goes wrong in the organisation traders are only held responsible for wrong doings without listening to their side of the story.”
A SocGen spokesman said: “Our strict control framework has allowed us to identify a one-off trading incident in 2023, which didn’t generate any impact and led to appropriate mending measures.” He declined to comment on Mr Kataria’s LinkedIn post.
Traders buy and sell financial assets to try and make a profit for the bank. Despite the complex mathematics involved, some of the best traders rely on gut instincts and a tolerance for losing money to eventually make a profit.
Traders are given objectives but often have significant leeway in how they invest the bank’s money, although lenders have risk departments tracking the trades.
Mr Kataria bet on the Indian stock market using a number of derivative trades that SocGen’s risk managers did not spot because of a glitch in the system, Bloomberg reported.
Although the bank avoided any losses, the bets could have theoretically cost SocGen hundreds of millions of dollars.
In his post, Mr Kataria said the bets had been in place for four months and made almost €2m (£1.7m) for the bank.
He said: “I had no intention of hiding this [sic] trades from anyone. Mistakes are made by human beings only and I accept my mistake.”
Rogue traders have the capability to blow up banks. Nick Leeson sank Barings Bank in 1995 after placing reckless trades that lost the bank more than $200m (£160m).
Bruno Iksil, a JP Morgan trader nicknamed the London Whale, also made outsized bets in 2012 that cost the bank $6bn.
SocGen lost €4.9bn in 2007 from bets placed by rogue trader Jérôme Kerviel, who also worked in the Delta One unit.
