Societe Generale: Taking risks
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Societe Generale: Taking risks

SocGen has trader trouble again.

Photo: Reuters

When traders get blamed for something bad happening, or even just nearly happening, it is not entirely unheard of for them to be keen to shift that blame onto their own risk managers.

This can be appealing, particularly in an industry with a reputation for – ahem – occasional sub-optimal risk management. If only the cops had been patrolling my street properly, I wouldn’t have got myself into trouble!

And so we come to the odd tale of Kavish Kataria, a former Delta One trader at Societe Generale in Hong Kong. Bloomberg reported this week that he and his manager had left the bank last year after a review of some transactions that hadn’t been picked up by its risk-management systems and could potentially have caused a calamity but didn’t in the end.

Kavish Kataria

Anyway, Kataria took to LinkedIn on Thursday with a long defence in which he admitted mistakes but put the blame squarely on the bank for failing to monitor his options trades on Indian stock indices properly. Had it done so and had it then told him that he was exceeding his mandate, he would have changed his strategy, he says. As it was, he says he was fired.

So far there has been no official word from Societe Generale other than confirmation that there had been an incident that had not caused any “impact”. But it is an extraordinary spat to have broken out into the open, particularly at a firm that still feels bruised internally by the infamous Jérôme Kerviel affair (more Delta One!) in 2016. That incident was of course a tad different in that it caused some €4.9 billion of “impact”.

In an earlier LinkedIn post, from three months ago but only made available to his connections, Kataria says one of the things he learned in 2023 is that “fame is temporary but your actions & deeds last forever”.

Might need another edit.

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