An expose of bad businesses and their unethical practices

In a follow-up to a previous column, the Societe Generale employee that made fraudulent transactions totaling at least $7 billion did so at least partially by hacking into the banks computer system. The bank says that the trader used "several techniques of fraud" including computer hacking as part of the operation.

The bank denied that it has destabilized markets when it sold off the involved issues at a loss over several days last week, saying that it has absorbed the losses itself and that it had made all of the sales in a controlled manner. The bank also said that the trader appeared to have been working alone and had not profited from the fraudulent transactions, although that ignores the matter of motive.

The French Finance Minister and other European Union officials have been looking into the case and will continue to do so. There is, of course, risk from this type of operation within other banks. Merrill Lunch CEO John Thain said, “We will certainly go back and try to understand how this happened to make sure it can't happen, but again, no systems can prevent fraud, you just want to catch it as quickly as you can.”

This particular bit of Bad Business may be out of the barn, but that does not mean that some other banks may not need to secure some doors of their own.