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Tuesday, January 29, 2008

Société Générale - Timeline of Fraud

A look at how Societe General's trading scandal unfolded:

- 2000: Jerome Kerviel joins Societe Generale, working in offices that monitor trades.

- 2005: Kerviel promoted to more glamorous arbitrage trading desk, where his job consisted of making profits from small differences in prices between different markets.

- Late 2006: Kerviel begins making transactions that the bank now says were apparent precursors to the alleged massive fraud.

- Jan. 18, 2008: Bank launches an emergency in-house investigation after Kerviel's transactions begin raising red flags.

- Jan. 19: Kerviel called to Societe Generale to explain. Bank says he eventually confirms fictitious trades.

- Jan. 20: Bank team works overnight to identify the exposure. CEO Daniel Bouton notifies Bank of France.

- Jan. 21: Bank starts quickly and quietly unwinding positions in European markets.

- Jan. 23: Position closed or hedged.

- Jan. 24: Societe Generale alleges the "massive" fraud cost 4.9 billion euros ($7.09 billion).

- Jan. 25: Bank apologizes to shareholders in newspaper ads. Police search Kerviel's apartment.

- Jan. 26: Police take Kerviel into custody.

- Jan. 27: The bank says Kerviel "combined several fraudulent methods" to cover his tracks, such as falsifying documents and swiping computer access codes. It says he bet 50 billion euros ($73.53 billion) - more than the bank's net worth - on futures contracts at three European equity indices. Defense attorney bank is making scapegoat of Kerviel to hide losses on U.S. mortgages.

- Jan. 28: Prosecutor requests preliminary charges of forgery, breach of trust and fraud against Kerviel, and says Kerviel could face up to seven years if convicted. Kerviel is released from custody on condition he remain in France.

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