Management Turnover as Change Agent

Tuesday, January 29, 2008

Pressure Builds on Head of Soc Gen to Resign

No real surprise, when you consider how the scandal at Société Générale has continued to evolve. Chairman and CEO Daniel Bouton has a difficult task ahead of him to survive as the bank's leader. According to the UK Times Online,
In a television interview today, Christine Lagarde signalled that Société Générale needed a change of leadership to recover from the world’s biggest trading scandal, involving the increasingly infamous trader Jérôme Kerviel who notched up €4.9 billion (£3.7 billion) in losses from share trades.
The latest hic cup to the scandal relates to what might be viewed as insider trading by one of the directors of the bank. The Times Online went to say,
Société Générale issued a statement regarding the sale of shares worth nearly €100 million by one of its board directors, Robert A. Day, days before the scandal broke.

Documents released yesterday by the AMF, the French market regulator, showed that Mr Day sold €85.7 million in shares on January 10. Also, two trusts connected to Mr Day, offloaded large chucks of shares on the same day — the Robert A. Day Foundation sold €8.6 million in stock and the Kelly Day Foundation sold €959,066. The AMF is due to send a report on the events at Société Générale to Ms Lagarde on Friday.
More and more it appears the Bouton will have an extremely difficult time saving his job. Stay tuned as the scandal continues to unfold and raise more questions than answers.

For more:

New York Times (Jan. 30)
Deal Journal
New York Times
France 24
Financial Times

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