- Tuesday, May 14, 2024
Kavish Kataria says his bosses were at fault for failing to identify the trades and he was being made a scapegoat
By: Shajil Kumar
One of the Societe Generale traders let go by the French bank late last year after it uncovered a series of unauthorised bets has criticised his former bosses, saying they were at fault for failing to identify the trades. He said he and other traders were being targeted.
Kavish Kataria, a former vice president at SocGen in Hong Kong, said on LinkedIn on Thursday that his job had been terminated with seven days pay and his bonus for the previous year withheld despite, he claimed, making the bank more than $50 million (£39.9m) in profit in eight months.
Kataria, who worked on the derivatives desk, was sacked last week after the lender uncovered trades he had placed on the Indian stock market.
SocGen’s risk managers could not spot Kataria bet on the Indian stock market because of a glitch in the system. Although the bank avoided any losses, the bets could have theoretically cost SocGen hundreds of millions of dollars.
“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,” he said.
“Just mentioning technical glitch or mentioning they were not aware of the trades done by me is completely incorrect,” he added.
Kataria said the trades he made were auto-booked into a system and reported daily “by the PL control team to all the higher bosses in HK as well as in Paris.”
He said if he were informed that the trades were not in his mandate he wouldn’t have traded that strategy and lost the job.
SocGen declined to comment on Kataria’s post.
Two Hong Kong-based traders at Societe Generale left the French bank late last year after the bank discovered unauthorised bets made via options contracts tied to Indian stock-market indices, a source close to the matter said on Tuesday.
The trades did not exceed authorised trading amounts and led to no losses, but the bank’s risk-management systems failed to detect the trades because they were made in the morning and unwound in the afternoon every day, leaving no trace of any trade exceeding limits in the books, the source added.
In a statement on Tuesday, SocGen said it had identified a “one-off trading incident in 2023, which didn’t generate any impact and led to appropriate mending measures,” without elaborating.
SocGen, which reports its first-quarter earnings on Friday, has made improving its risk controls a priority.
The bank’s most infamous risk control failure resulted in 4.9 billion euros (£4.19bn) worth of losses in 2008, after bets by “rogue trader” Jerome Kerviel. (Agencies)
