The SocGen debate continues. Thanks to Gaute Solheim who commented yesterday as follows:
[Quoting Kurt Schulzke]: “The gains and losses were all a single product of the rogue behavior of a single trader who was discovered and ushered out of the company very early in 2008.”
I am not able to follow your logic here. If the rogue behaviour had resulted in record gains in early 2008, and he had been ushered out of the company for trading outside his limits, would it then be more “true and fair” to put all the gains from all the different trades he did in the 2007 result since they were “a single product”?
I have a hard time figuring out where in the IFRS a persons intent for “rogue behaviour” is treated as a cause to bundle together independent trades that otherwise would be handled independently. As you understand I am not convinced yet.
I do agree with you that IFRS is a step in the right direction, but I still suspect that SG stepped out of line here. Continue reading