The Tale of Two Banks: Societe Generale and Barings‪.‬

CASE DESCRIPTION The primary subject matter of this case concerns stories of financial fraud involving two rogue traders: Nick Leeson whose trading caused a 200 year-old institution, Barings Bank PLC, to lose almost $1 billion and go bankrupt in 1995; and Jerome Kerviel who lost over $7 billion for Societe Generale in 2008. Secondary issues are the complexities of financial instruments driven by the growth in derivative markets. Additionally, there is discussion of operational risks and lack of managerial oversight. The focus is more on the managerial, procedural, and control issues than on the financial instruments themselves. This case can be used effectively in finance, auditing, information systems or management classes. The case has a difficulty level of four or five, appropriate for late undergraduate or MBA students. The case is designed to be taught in three hours and is expected to require three hours of outside preparation by students.