Re: French banker trades away 7 Billion dollars to his own company
More than likely he was trading futures or commodities on margin. In some cases those traders only have an equity position of 5% or less, meaning that he would be working with a couple of hundred million in equity, but he would be levering billions. If he got caught leaning the wrong way, particularly with some of the fast moves over the past few weeks, he could erode his equity and start getting margin calls pretty quickly. If the margin clerk does not see funds quickly enough, they just liquidate the position, regardless of price, which of course drives the price lower.
Really crappy set of internal controls and intraperiod accounting however.
Somebody has some 'splaining to do.