Saturday, February 9, 2008

Moussa Bakir Rogue Trader Released Europe

Fimat Broker Released in Societe Generale Probe (Update1)

By Gregory Viscusi

Feb. 9 (Bloomberg) -- Moussa Bakir, a derivatives broker held two days ago in connection with Societe Generale SA's record trading losses, was released and won't be charged, according to the Paris prosecutor's office.

French investigators determined, after questioning Bakir, that he is a ``witness'' and that there are no grounds to hold him or press charges, Isabelle Montagne, a spokeswoman for the prosecutor, said.

Bakir, who works at Societe Generale's futures brokerage Fimat, was questioned about e-mails he exchanged with Jerome Kerviel, the trader blamed by Societe Generale for losing 4.9 billion euros ($7.2 billion) through unauthorized trading.

Insider Trading 911 Krongard, Shattuck (#40)

great video on 9-11-01 insider trading fraud.

exxonMobil wins freeze of 12 bln dlrs in Venezuelan assets

The Raw Story | ExxonMobil wins freeze of 12 bln dlrs in Venezuelan assets

The US energy giant said Thursday that the High Court in London had granted its request to freeze the assets of Petroleos de Venezuela (PVDSA).

"The freezing order prohibits PDVSA from disposing of its assets worldwide up to a value of 12 billion dollars," said Margaret Ross, an ExxonMobil spokeswoman.

The company said it has also secured separate orders from courts in the Netherlands and Netherlands Antilles to freeze assets in those jurisdictions of up to 12 billion dollars. A New York court also froze 300 million dollars.

Recession to be longer than usual: UMich | U.S. | Reuters

Recession to be longer than usual: UMich | U.S. | Reuters

NEW YORK (Reuters) - The U.S. economy has entered a recession that will be more painful and drawn out than the usual downturn, the director of the Reuters/University of Michigan consumer sentiment survey said on Friday.

Inflation pressures will linger despite the retrenchment in consumer spending, complicating the task of policy-makers, the University's Richard Curtin said in a report, citing data from industry group The Conference Board.

"This is no ordinary recession," he said. "The aftereffects will last much longer than the typical downturn."

He said the Conference Board's expectations index is a strong predictor of economic contractions, and that it is currently flashing red.

With Americans getting hit with everything from a housing downturn to excess borrowing, things will get worse before they get better.

"Consumers must take more drastic steps to stabilize their finances in the midst of high fuel and food prices, stagnant incomes, and record debt," Curtin said.

Iranian Oil Bourse In Check, Cut Cables

George Bush delivers the horse's head | Spero News
As to whether the Bush administration would start a war to defend dollar hegemony; that's a question that should be asked of Saddam Hussein. Iraq was invaded just six months after Saddam converted to the euro. The message is clear; the Empire will defend its currency.

Similarly, Iran switched from the dollar in 2007 and has insisted that Japan pay its enormous energy bills in yen. The “conversion” has infuriated the Bush administration and made Iran the target of US belligerence ever since. In fact, even though 16 US Intelligence agencies issued a report (NIE) saying that Iran was not developing nuclear weapons; and even though the UN's nuclear watchdog, the IAEA, found that Iran was in compliance with its obligations under the Nuclear Nonproliferation (NPT) Treaty; a preemptive US-led attack on Iran still appears likely.

And, although the western media now minimizes the prospects of another war in the region; Israel is taking the precautions that suggest that the idea is not so far-fetched. “Israel calls for shelter rooms to be set up in a bid to prepare the public for yet another war, this time, one of raining missiles.” (Press TV, Iran) -end snip

- i would like to take the time to call the Iranians idiots. They spend billions building a new oil pit with out satellite connections to the internet. "someone" cuts the cables and kish island (location of new oil trading pit) is out of commission. LOL . lets not forget with iran under sanctions the world's huge oil traders cannot trade on this exchange.

on the cables: perfect time to set up a relay for snooping. 5 cables cut by accident? GIVE ME A BREAK!!

i am not saying it is right but the USA seems to have Iranian Oil Pit Dreams in check if not mate. -st0ckman

he is a snip of a market watch article. great read!

This concept seems a little far fetched until you look at the details which were provided to me by one of my readers, Martin Kuplens-Ewart who has been following the story from the outset. He notes: "there is a substantial event that has effectively been killed by the loss of connectivity: the launch of the Iranian Oil Bourse.
"A marketplace for oil, gas, and various petrochemicals, the Iranian Oil Bourse would trade exclusively in non-dollars and probably substantial negative impact to the U.S. economy and financial system. The bourse was scheduled for launch this week (between Feb. 1 and 11. With complete elimination of Internet connectivity to the country, this launch is now impossible and unlikely to be achievable before month's end (given the estimate 10-14 days for repairs to fiber-optic cables)."
He cites various articles expressing the mystery behind the cut cables and describing the bourse and its overall threat to the U.S. economy, as well as how the thing could backfire, ruining the Iranian economy. See Seattle Times article. See World Press article. See Energy Bulletin item.
The second bourse article, written in 2005, discusses the early planning for the bourse and suggests or wonders if someone might take some covert actions against it.
Communication breakdown
In most instances Internet connectivity can be rerouted, and much of the Middle East has already done this. But what makes this situation unique is that the bourse was being established on Kish Island, a free-trade zone set up by the Iranians in hopes of creating a cool tourist destination.
For an example of what they are up to check out the Web site for one of the new hotels here. See link to Dariush Grand Hotel.
There doesn't seem to be an alternate Internet connection to the island other than the cut cables. I attempted to email the three top hotels on the island and all the email bounced. I was also unable to make a telephone call there indicating a large telecommunications failure.
The Web sites for the hotels are likely to be hosted off the island and are still working.
This sort of telecom and Internet failure/collapse, no matter what the cause, is unlikely to give anyone confidence in an international oil trading system on Kish Island. Too much money is at risk. The island obviously needs satellite access or some form of connectivity back up that is foolproof.

Rogue Trader Moussa Bakir, Jerome Kerviel Société Générale SocGen

2nd Trader, Moussa Bakir Emerges in Inquiry in France - New York Times

2nd Trader, Moussa Bakir Emerges in Inquiry in France

Published: February 9, 2008

PARIS — French investigators said Friday that they were questioning a second trader in connection with Société Générale’s 5 billion euro ($7.1 billion) loss, the worst in history caused by a rogue trader.

Adam Berry/Bloomberg News

Moussa Bakir, a 32-year-old broker, in a Web photo.

The announcement cast further doubt on the bank’s assertion that the rogue trader, Jérôme Kerviel, acted alone in amassing more than $50 billion in unauthorized positions on stock futures.

Also Friday, a Paris court ruled that Mr. Kerviel, a 31-year-old junior trader, had to go to jail while awaiting trial, reversing a judge’s ruling last week that he could remain free as his case was investigated. At that time, the Paris prosecutor had argued that he should be detained to keep him from harming himself.

Courtroom observers said Mr. Kerviel appeared shocked by the court’s decision on Friday. The prosecution said Mr. Kerviel could be detained for 4 to 12 months.

Legal experts said the revelation that Mr. Kerviel might not have been the lone operator suggested that oversight of Société Générale’s trading room might have been recklessly lax. That could put added pressure on Daniel Bouton, the bank’s chief executive, and other top managers to explain more fully the circumstances that led to the losses.

“It really suggests a higher-level failure of risk management than we thought two weeks ago,” when the bank initially disclosed its trading losses, said Christopher Mesnooh, an international business lawyer in Paris.

“It’s one thing to overlook one person,” he added, “but if it’s two people then it begins to stagger the imagination.”

The man French financial authorities were questioning was identified as Moussa Bakir, a 32-year-old broker at Newedge, Société Générale’s futures brokerage unit (formerly called Fimat). He has not been accused of any crime.

According to two people with knowledge of the investigation, Société Générale has provided prosecutors with new evidence related to Mr. Kerviel’s fictitious trades — trades he used to cover up his unauthorized positions — including a series of messages between Mr. Kerviel and Mr. Bakir sent over the bank’s computer system.

According to these people, who requested anonymity because they were not authorized to discuss the case, Mr. Bakir sent one such message to Mr. Kerviel on Nov. 30, which read, “You have done nothing illegal in terms of the law.”

Both of the people said this message was only a “small part” of the communications linking the two men, and there was more “interesting” correspondence that had yet to be disclosed.

The Nov. 30 message was sent just four days after Eurex, the Frankfurt-based derivatives exchange, sent a query to Société Générale’s compliance department seeking clarification of several suspicious trades by Mr. Kerviel. It had been the second letter from Eurex in less than three weeks questioning Mr. Kerviel’s investment strategy and, especially, his habit of entering trades through a broker at Fimat, rather than from Société Générale’s offices.

In a Nov. 7 letter, Eurex asked whether Mr. Kerviel entered the transactions automatically or manually.

Investigators are also examining Mr. Kerviel’s cellphone bills, which Jean Veil, a lawyer for Société Générale, described earlier this week as unusually high, suggesting that there “could have been” others involved.

Mr. Veil emphasized that the bank had found no evidence to suggest that Mr. Kerviel had accomplices.

“That said,” he added, “I am asking myself how he could have built up a 1,000-euro monthly cellphone bill given that he worked all day long in an office with telephones.”

A spokeswoman for the prosecutor’s office, Isabelle Montagne, confirmed that the police had taken a male employee of Newedge into custody around midday on Thursday and that he was expected to be held for questioning until around midday on Saturday. She said the police had also raided Newedge’s offices on the Champs-Élysées on Thursday, taking documents and computer files.

A spokeswoman for Société Générale, Joelle Rosello, declined to comment, saying the bank was “cooperating closely with the investigation.”

Last month, Société Générale merged Fimat into Newedge, a joint venture with the futures brokerage unit of Calyon, the investment banking arm of Crédit Agricole, another French bank. Representatives for Newedge referred all inquiries to Société Générale.

Stéphane Bonifassi, a business crime expert at the law firm Lebray & Associés in Paris, said the emergence of Mr. Bakir as a possible accomplice might have helped the prosecution at the hearing Friday.

“That there is this other guy may have strengthened the need to place Mr. Kerviel in pretrial detention to avoid them talking together or coordinating their stories,” Mr. Bonifassi said.

Frédérik-Karel Canoy, a lawyer for small shareholders who was present as the decision was read, said Mr. Kerviel reacted as if “the sky had fallen on his head.”

“When he heard the words ‘placed in detention’ you could see his body crumple slightly as if it suddenly hit him that he really was going to prison,” Mr. Canoy said.

Another lawyer who was present said that Mr. Kerviel was escorted away from the hearing room by three gendarmes but that he was not handcuffed. Mr. Kerviel’s lawyer, Elisabeth Meyer, wept, Mr. Canoy said.

Ashen-faced as she addressed a crush of cameras after the verdict, Ms. Meyer vowed to appeal. “I cannot explain this decision,” she said.

Last month, the Paris prosecutor, Jean-Claude Marin, requested Mr. Kerviel be detained to protect him from the media and professional pressure, and out of concern he might harm himself once he understood the gravity of his situation.

James Kanter contributed reporting from Paris.

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