Response

 According to the discussion on part one, it is true that other DLP traders have manipulated GED’S transaction system like Kerviel since GED’S itself handover 1300proprietary trading activities comprising two groups. Volatility and arbitrage (Marchewka, 2016). Volatility traders were charged with profiting from directional trading positions while the arbitrage traders looked to profit from long or short combinations of offsetting positions by capturing mispricing between asset with similar market sensitivity.

It is typical for middle office employees to be promoted to the front office looking on the part of mustier who was aged 38from the time he joined Societe Generale, it had gained high internal recognition for building a profitable equity derivatives trading business. This was also proved by CIB’S earnings over the next four years (Fraser, 2014). Mustier’s contribution earned him promotion to the position of CIB’s global end and membership in Societe Generale executive committee.

Kerviel showed some unusual attitude when he was working in the middle office for manipulating the transaction system since his position in Societe Generalis CIB was unlikely to be noticed. He was also one of the seven traders in the delta one listed product (DLP) team.

Paris prosecutor had sufficient grounds for criminal charges against Kerviel because Societe Generalis system provided trading management with a series of transaction, profit and loss and cash flow reports during 2005-2006 monitoring appears to have been done in a desultory manner by Kerviel’s trading manager (Baller, 2016). Societe Generale maintain from its earliest public communication the posture that Kerviel was a rogue trader who single handedly developed methods to conduct unauthorized trading without being detected and used them to take massive trading positions that ultimately backfired when markets turned against him.

References

Baller, S., Dutta, S., & Lanvin, B. (2016). Global information technology report 2016. Geneva: Ouranos.

Fraser, J., Simkins, B., & Narvaez, K. (2014). Implementing Enterprise Risk Management: Case Studies and Best Practices. John Wiley & Sons

Marchewka, J. T. (2016). Information technology project management: Providing measurable organizational value. John Wiley & Sons.