Bank uncovers $7 billion fraud by single trader

PARIS (AP) -- Societe Generale uncovered a $7.14 billion fraud -- one
of history's biggest -- by a single futures trader who orchestrated a
series of bogus transactions that spiraled out of control amid roiling
markets this week, the French bank said Thursday. Executives said the trader, a French man in his 30s, acted alone. CEO Daniel Bouton said the trader's motivations were "irrational" and that he may not have benefited directly from the fraudulent deals.

The bombshell announcement destabilized a major bank already heavily exposed to the subprime crisis and rattled the global banking sector. France's second largest bank said it will seek 5.5 billion euros ($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 Thursday morning. Trading resumed midday and shares dropped 5.5 percent to 74.77 euros ($108.97)

Societe Generale said it detected the fraud over the weekend at its French markets division.

The trader had misled investors in 2007 and 2008 through a "scheme of elaborate fictitious transactions," the bank said. The trader, who was not named, used his knowledge of the group's security systems to conceal his fraudulent pos