Meet world’s poorest man alive, once top trader, got 5-year sentence, caused Rs 49500000000000 loss to…, his name is…
When we think of the richest individuals in the world, names such as Elon Musk, Mukesh Ambani, Gautam Adani, and Jeff Bezos come to our minds. But have you ever wondered whose world’s poorest person is? Well, pictures of huts, an empty steel bowl, and torn clothes are associated with the ‘beggar’ word. At first glance, Jerome Kerviel might seem like an ordinary man walking around the streets of Paris. However, his story is not a normal one! Instead of poverty being shown in his clothing, food, or home, Jérôme Kerviel carries a financial burden so large that it caused a global market shock. And ultimately, he earned the title of being “the world’s poorest man.”
Who is Jérôme Kerviel?
In this article, we are talking about Jérôme Kerviel, a Frenchman who is now considered to be the world’s poorest and most indebted person. He is buried under a debt of nearly Rs 4.95 lakh crore (around $6.7 billion). Being poor does not always mean empty pockets.
Born on January 11, 1977, in a small French town called Pont-l’Abbé, Jerome hailed from a modest family. Speaking about his personal life, Jerome’s mother was a hairdresser, while his father worked as a blacksmith. Jérôme was a good student. He completed his master’s degree in Finance from Lumière Université Lumière Lyon 2. Soon after completing his studies, he was hired by Société Generale, which is the third-largest bank in France. At the bank, he worked as a junior derivatives trader. However, his knowledge of technology and excellent trading ability led him to cover millions of dollars in deals. He was always part of the bank’s Delta One division, which deals with share trading, algorithms, and investments.
How did Jérôme Kerviel become a billion-dollar trader?
Jérôme had a vast knowledge of computer programming and trading systems; however, he misused this knowledge and expertise, turning it into wrongful use. Jérôme had been misusing vulnerabilities in the bank’s internal systems to perform arbitrage. During this period, he traded billions of dollars utilizing the company’s capital. At first, he made huge profits, executing trades worth almost $73 billion in a calendar year.
What was Jérôme Kerviel’s scandal? How did the World come to know?
It is noted that the bank remained aware of this practice for a very long time, as Jérôme used technology to hide every irregularity. However, in 2008, the fraud became apparent, and an investigation began. On January 19, 2008, the scandal was revealed, shocking the bank and everyone around it. Upon inquiry into the controversy, it was determined that Jérôme’s unauthorized trading incurred an approximate loss of $7.2 billion, which is over Rs 4,95,000 crore, to the bank, as per media reports. This amount has become a debt burden against him, making him one of the poorest people in the world.
What did the Court order against him?
According to a 2010 report by The Guardian, Jérôme Kerviel, then 33 years old, was found guilty of breach of trust, computer abuse, and forgery. He was sentenced to five years in prison, with two years suspended. In a dramatic moment that drew audible gasps in the courtroom, the judge also ordered him to pay €4.9 billion (around £4.2 billion) in damages to Société Générale — the total amount the bank lost due to his high-risk trading strategies in January 2008.
After the incident, Jérôme received a 3-year prison sentence in 2015. He pleaded guilty to several charges, including breach of trust, fraud, and unauthorized access to computer systems. Kerviel was released in 2014 under electronic surveillance after serving just five months of his prison sentence.
Where is Jérôme Kerviel now?
While his sentence is completed, the debt burden still remains today. Upon his release from prison, Jérôme is trying to live a life of simplicity, but the weight of debt still leaves him one of the poorest people in the world.