Would a whistleblower hotline have prevented the Societe Generale scandal?
Since the breaking of this $7.2 billion scandal, my mind has been reeling, as I have considered the organization’s lapses and the opportunities it may have had to prevent such a travesty. News stories to date indicate that one fairly low-level trader circumvented controls that exposed Societe Generale to $70 billion in unintended risk. This is real money, even for the second largest bank in France. Given our business, I am naturally lead to wonder whether a whistleblower hotline could have prevented such a catastrophe. The website of Societe Generale indicates they have a rigorous system of internal controls and many of the elements of an effective compliance program. They employ 525 full time compliance and money laundering officers, publish a code of conduct worldwide, and have trained 17,859 officers in compliance issues. They also deploy sophisticated technology tools to detect fraudulent and other harmful activities. And yet it does not appear that they have an ethics and complian
