Case Study The Rogue Trade

Task 1: Société Générale: The Rogue Trader

1. What are the motivations of individuals who engage in unethical conduct in organizational settings? Why did Kerviel do it? How did he justify his activities?

The motivations of individuals who engage in unethical conduct in an organization is usually caused by a poorly designed incentive system. These motives are usually related to external rewards such as: money compensations, praises, and fame.

In the case of Société Générale, Kerviel possessed similar motivations, which were the reasons why he conducted unethical activities.

The main motives that drove Kerviel were recognition and fame. The London Times commented on Kerviel as “an average guy” with “mediocre abilities and limited experience”; however, Kerviel wanted to be noticed and to show that he was as good as “the golden boys”. His ambition for greatness was due to his experiences involving his ordinary hometown and childhood. Kerviel is a child of a hairdresser and a vocational school teacher; he was raised up in a coastal town in Brittany, which was dominated by industries like fishing and tourism. He failed several times on achieving excellent results (ex.

To prevent rogue traders and similar situations happening again, the bank first needs to reinforce their internal control system, because the frail control system was the main reason to cause the catastrophe for SocGen. In the “SocGen” case, it mentioned “France’s politicians gained in power from the crisis”; the Prime Minister François Fillon, besieged by reporters at Davos, promised to ensure “greater transparency” in financial markets.” (P.15). Minister of Economy Christine Lagarde also mentioned the markets actors needed more independent scrutiny and there should be heavier legal sanctions against banks that did not meet their regulatory