Kerviel -- From Floyd Norris Blog

I thought so! Kerviel was ahead at the end of the year 2007!

May 13, 2008, 6:27 pm
SocGen Changes Its Numbers
Société Générale, the French bank that lost billions from a rogue trader, disclosed today that it had restated quarterly income figures for last year to account for the unauthorized trades. The audited numbers, which the company admitted violated accounting standards, now turn out to have been wrong. (The violation of accounting standards, as I explained in this column, involved shifting losses taken in 2008 to 2007. The company got its auditors to agree that was fine, despite the rules.)
SocGen still wants to report all the losses in 2007, but it concedes that losses came as early as the first quarter. Previously it had not disclosed any impact before the fourth quarter.
My colleague Nicola Clark of the International Herald Tribune brings to my attention the fact that the restatement can be found in today’s first quarter earnings release. You can find them on page 24, in appendix 3.2 How’s that for prominent disclosure?
Here is the latest on when the trader, Jérôme Kerviel, made and lost money on his unauthorized trades:
First quarter 2007 — A loss of 97 million euros.
Second quarter 2007 — A loss of 2.064 billion euros.
Third quarter 2007 — A profit of 2.524 billion euros.
Fourth quarter 2007 — A profit of 1.108 billion euros.
First quarter 2008 — A loss of 6.382 billion euros.

Those losses were taken after the bank found out about the trades and liquidated his positions in a hurry.
Previously, the company had reported the net amount for all the trades in the fourth quarter. It disclosed (in note 40 on page 247 of its annual report) that the 6.4 billion euro loss actually came on trades in the first quarter of this year, but it decided to report them in 2007 anyway. It still does that, but it spreads the earlier results among the other quarters when they actually occurred.
The interesting news for the first quarter of 2008, to me at least, is that SocGen spent 274 million euros to bail out its money market funds, which owned “securities that had become illiquid” and that could not be sold for their face value. It appears that Mr. Kerviel was not the only SocGen trader who made bad bets.