Equity Derivatives House of the Year

An as-yet-unnamed trader at SocGen has somehow contrived to lose more than $7 billion by making bad directional bets on equity indices. Bloomberg’s Gregory Viscusi is on irony watch:

"At first this seemed like a joke," said Nicolas Rutsaert, an analyst covering European banks at Dexia SA in Brussels. Societe Generale “was a leader in derivatives and was considered one of the best risk managers in the world.”…

Societe Generale has ranked first or second during the past five years in client surveys of equity derivative firms, according to Risk Magazine. In 2007, it received the award for "Equity Derivatives House of the Year” from The Banker, a London-based monthly magazine.

You can see why that might be, given the amount of money that the rest of the equities-trading world was, we now realize, making from this one out-of-control trader.

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