Fraud costs Societe Generale $7 billion
Societe Generale, France’s second-largest bank, said that fraud by one of its futures traders had cost the bank $7.1 billion. Societe Generale also took about $3 billion in U.S.-subprime-related writedowns and said it will raise $8 billion by selling shares. Trading in the bank’s shares was halted early today. (AP in Societe Generale said the unidentified trader had exploited a security loophole to make unauthorized stock hedges. Not everyone was convinced. “I have a hard time buying the fact that a trader was able to set up a ’secret trade’ of €4.9 billion without anybody finding out,” said Ion-Marc Valahu at Amas Bank in Switzerland. (The New York Times, free registration)
Ford pares losses
Ford posted a loss of $2.7 billion in its fourth quarter, and $2.8 billion in all of 2007, roughly in line with analysts’ forecasts. But the losses were much better than a year earlier, when Ford lost $5.6 billion for the quarter and $12.6 billion for all of 2006. (AP in Yahoo! Finance) Ford has reached a deal to buy out 11,000 hourly workers and 2,000 managers, The Wall Street Journal reported, as it works to bring its workforce in line with slowing demand for its cars and trucks. ( “We’re delighted with what they’ve done to start to restructure the company,” said Morgan Keegan analyst Pete Hastings. (Bloomberg)
CBS site bets on free on-demand music, a music and social networking site acquired by CBS last year for $280 million, said it will let users play any of 3.5 million songs free of charge over the Internet. The ad-supported site lets you listen to a song three time before it prompts you to buy it through services like Apple’s iTunes or Amazon. (AP in Thanks in part to’s affiliation with a large media company, the four major record labels—Universal, Sony BMG, Warner, and EMI—are all partners in the endeavor, along with 150,000 other labels and artists. When London-based launched six years ago, the major labels “wouldn’t even take our calls,” said co-founder Martin Stiksel. (Reuters)
Flip that name
A different sort of real estate rush is going on in Los Angeles this week, as the annual DomainFest draws buyers, sellers, and speculators for an auction and trade show for Web domain names. Sales so far this week have included Porn-dot-net for $400,000 and Alimony-dot-com for $75,000, both far shy of the record $12 million paid for Sex-dot-com in 2006. Flippers, squatters, and other “domainers” say it is harder to make a fortune now, but there is still money in the game. “I just met a guy who bought Birthdaycakes, plural, and Weddingcake, singular, for $40,000,” said industry pioneer Frank Schilling. “He resold the pair for $300,000 14 months later.” (Los Angeles Times, free registration)