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Foreign Exchange

People: Mystery as SG suspends two senior FX staff

No money lost on trading, bank says; Uncertainty may hit hiring plans

"There has been no problem
with any client trade or any
wrong-doing towards a client,
and no financial loss towards
a client or the bank"

Mystery still surrounds Société Générale’s Corporate & Investment Banking’s suspension of two senior employees at the end of October. Didier Meyer, its global head of FX options and spot trading, and Eric Leandri, its head of FX structuring for Europe and Asia, have been relieved of their duties. No reasons have been given for the suspensions. Euromoney contacted SocGen, but it declined to comment on individuals. We also tried to contact the individuals involved, but they did not respond.

A spurt of activity in the options market by SocGen – it was particularly active at the long end of the EUR/USD curve – inevitably led to rumours that the suspensions were related to a large trade that had somehow gone wrong.

The talk in the market is that SocGen advised a client with huge exposure to the downside of EUR/USD to put on a €5 billion hedge through a combination of outright forwards and the purchase of longer-dated out-of-the-money EUR calls. Sources close to Meyer insist that no loss was incurred, which has been confirmed by SocGen. "We do not comment on any individuals. There has been no problem with any client trade or any wrong-doing towards a client in this context, and no financial loss towards a client or the bank," says a SocGen spokesman.

Talk in the market is that the trade that led to their suspension was extremely profitable. Well-placed sources elsewhere say that the client is not unhappy with it either. The buzz is that the decision to suspend the two may have been based on an oversight on their part – rather than any deliberate actions – but it was apparently taken at an extremely high level. Clearly, SocGen is particularly sensitive to its procedures after Jérôme Kerviel.

SocGen’s reticence on the subject – while understandable – will only serve to fuel the rumours. The decision to suspend Meyer and Leandri, who are said to be extremely popular with their colleagues, is hardly likely to serve as a magnet to attract new staff to the bank. SocGen has been actively trying to hire in recent months in an effort to build up its FX business.

Meyer has worked for SocGen since 2001, when he joined the bank to set up an FX structuring desk in Paris. He had previously worked for both Alcatel and Elf. Leandri joined the bank in 2004, also from Alcatel, where he was head of treasury.

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