Thursday it has uncovered a US$7.14 billion fraud -- one of history's biggest -- by a single futures trader who fooled investors and overstepped his authority. The fraud destabilized a major bank already exposed to the subprime crisis. France's second largest bank by market value said it would be forced to seek US$8.02 billion in new capital.Trading in Societe Generale's shares, which have lost nearly half their value over the past six months, was suspended on the Paris bourse. It was unclear when trading would resume.The bank said it detected the fraud at its French markets division the weekend of Jan. 19-20. In a statement announcing the discovery, it called the fraud "exceptional in its size and nature.''It said a trader at the futures desk had misled investors in 2007 and 2008 through a "scheme of elaborate fictitious transactions.''The trader, who was not named, used his knowledge of the group's security systems to conceal his fraudulent positions, a SocGen statement said.The individual confessed to the fraud, the bank said, and was being dismissed. His supervisors were to leave the group. Chief Executive Daniel Bouton offered his resignation but it was rejected by the board.The fraud appeared to be the largest ever by a single trader. If confirmed, it would far outstrip the Nick Leeson trading scandal in 1995 that bankrupted British bank Barings. Barings collapsed after Leeson, the bank's Singapore general manager of futures trading, lost 860 million pounds -- then worth US$1.38 billion -- on Asian futures markets, wiping out the bank's cash reserves. The company had been in business for more than 230 years.
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