Ouch!

Gotta watch that oversight, there...

PARIS (AP) -- French bank Societe Generale said Thursday it has uncovered a $7.14 billion fraud - one of history's biggest - by a single futures trader who fooled investors and overstepped his authority.

As usual with this sort of thing, it was done (as it only could have been) by someone on the inside.

It said a trader at the futures desk had misled investors in 2007 and 2008 through a "scheme of elaborate fictitious transactions."

The trader, who was not named, used his knowledge of the group's security systems to conceal his fraudulent positions, a statement from the bank said.

Any system can be subverted. And subversion usually does not happen because of weak algorithms (although that's only because most professional systems use peer-reviewed algorithms and protocols).

The problem, of course, and it's not a trivial problem at all, is making a set of procedures and checks that can't be gamed or subverted, but are still usable. (Who watches the watchers, etc.)