It’s been all over the news that this guy at a French bank was involved in some shenanigans with fictitious trades. I don’t really understand what exactly he did, why he did it, and what benefits he got from doing whatever it is he did.
Any help?
Allegedly he made unauthorised bets on future market movements. These have the capacity to make or lose large amounts of money on a small stake. He allegedly disguised these transactions with fictitious bets on the market moving the opposite way - thus giving the appearance that the bank was not exposed.
If all had gone well perhaps he would have made a slightly bigger bonus. But there’s no suggestion that he stole the money. And if the markets hadn’t moved as much as they did when they did, that might have happened, although once a person starts doing this sort of thing they tend to make bigger and bigger bets to cover their mistakes until it eventually falls apart.
It’s also worth noting that not everyone is convinced that the bank’s hands are entirely clean. They will presumably need to convince the markets and the authorities that this was not behaviour that should have been picked up by normal checks and that the market was appropriately informed in a timely fashion of the problems.