As if the Nick Leeson “rogue trader” episode of 1995 was not enough for the financial markets to digest, we have today seen inter-market fraud taken to a new level with news that ONE rogue trader has taken a $7 billion gamble with the funds of establish French Bank Societe Generale - and lost the lot!

The person in question is believed to be Frenchman Jerome Kerviel, a 31-year-old trader who worked on the firms Delta One products team, which basically involved taking large positions on the future movement of share prices. The fraudulent transactions seem to have taken place between 2007 and 2008, and using a number of techniques which he seems to have gleaned from his time in the back office, the trader has managed to conceal his position until now.

While the Bank will still report a profit for the year, the massive hit on the bank’s asset base will force them into the market to raise more capital to shore up their balance sheet. The banks shares were suspended at the opening of today’s market trading but soon resumed after the announcement, immediately falling 3.6%. Societe Generale are unwilling to give away much detail until a full review has been carried out, but there are major question about how a trader earning less that 100,000 Euros a year has been able to rack up such large positions, apparently unnoticed by the company’s accounts department.

There is also a secondary problem for the bank now that this situation has been released to the public – if one trader could hold the bank over a barrel to the tune of $7 billion, are there any more skeletons in the cupboard?

Until a full review of the banks positions and internal procedures has been carried out – not to mention probable intervention by the regulators – there will be a sense of uncertainty regarding the company and the share price is likely to suffer further during this period.