1. Did Jerome Kerviel perpetrate a fraud? Why or why not?

2. When such mammoth unauthorized trades occur, and the bank is bankrupted or severely damaged financially, should the board of directors, who have the ultimate responsibility for the bank’s activities, or its executives whose job it is to protect the bank, go to jail rather than the rogue trader?

3. Were the bank’s actions in liquidating Kerviel’s positions ethical?

4. Did the French officials who authorized the liquidation behave ethically?

5. There is considerable debate about whether better controls can ever stop a rogue trader. What is your opinion, and why?

6. If enhanced controls really can’t stop all rogue traders, how are companies to be protected from them?

Jerome Kerviel joined the French bank, Societe Generale (SocGen), in 2000 at the age of twenty-three as part of its systems personnel in its back office. In 2005 he became a junior derivatives trader with an annual limit of €20 million, which is just under U.S.$30 million. However, in November 2007, exchange officials questioned SocGen about why he had traded more than U.S.$74 billion worth of stock-index futures contracts.