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Futures Trader Blamed for French Bank Fraud

STEVE INSKEEP, Host:

And from Paris we have more this morning from Eleanor Beardsley.

ELEANOR BEARDSLEY: Societe Generale's CEO Daniel Bouton said the trader had been able to conceal his own mini-company from the rest of the bank.

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M: (Through translator) He was intimately knowledgeable about our control processes, so he was able to build his own positions and hide them each time by other positions that were completely fictitious.

BEARDSLEY: Kerviel had been betting Societe Generale's billions over the last year but was only discovered last week. The company frantically closed out its remaining exposure to his trades early this week as markets whipsawed. The bank's losses were magnified by the market plunge, says economist Catherine Lubojinsky(ph), but this has happened before.

M: (Speaking French)

BEARDSLEY: Now out of jail, Leeson says the system needs more reforms.

M: There should have been, you know, there should have been checks and controls in place to stop him stepping outside of those limits. You're still looking at a system or a situation where the systems and the controls aren't good enough. The people in place to look after those systems and controls simply aren't good enough, either.

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BEARDSLEY: For NPR News, I'm Eleanor Beardsley in Paris. Transcript provided by NPR, Copyright NPR.

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