The French bank, Société Générale, recently incurred a loss of approximately $7 billion at the hands of a relatively low level trader, Jérôme Kerviel. The loss apparently came about not through complex fraud, but, rather, Kerviel, making enormous bets on the direction of European equity indexes, an exposure that was beyond his authority to take. Professor James Fanto discusses the lessons to be learned for all companies, and for financial institutions in particular, when designing compliance and supervisory systems to prevent one disgruntled, delusional, or unscrupulous person from seriously damaging, even destroying, a firm.

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