Just wait for the global financial meltdown from shariah compliant finance, which is truly a Trojan Horse entering western financial markets.

Perhaps Kerviel, the man who broke the second largest bank in France, is just a lone rogue trader. He has cost Societe Generale over 4 billion euros in what papers are referring to as a completely unmotivated trading scheme in which he made no profits.

Or, maybe this is a tactic to weaken Western financial institutions so they can be purchased much more cheaply (”rescued”) by outside investors - particularly sovereign wealth funds. The Islamist countries - Kuwait, UAE, Saudi Arabia etc. - are the most active investors using sovereign wealth funds these days.

As to the repercussions…according to today’s Washington Post, shareholders from the U.S., Germany, France, Belgium, Switzerland and the Neterlands filed lawsuits alleging fraud, breach of trust and receipt of stolen goods against Societe Generale.

If all these lawsuits emerge from a trifling 4 billion Euros, imagine the lawsuits that may be filed once the real material risks of Shariah finance are revealed, and the participating institutions are found to have failed to disclose - since the Shariah finance market exposure is closer to a trillion dollars.  As Citigroup is finding, the “rule of deep pockets” is ever with us, like death and taxes.

As the Financial Times writes:

On Monday morning, SocGen began to unload Mr Kerviel’s huge futures contracts. But the markets were moving against the bank. Investors in Asia and Europe were offloading equities. As SocGen attempted to sell, its losses mounted. By Wednesday evening, when it finally closed Mr Keviel’s positions, the loss had risen to €4.9bn.

Daniel Bouton, SocGen’s canny, long-serving chief executive, decided to look at ways of raising capital. After consulting with JPMorgan and Morgan Stanley, Mr Bouton toyed with the idea of seeking fresh capital from a sovereign wealth investor. But ultimately they decided the best route was to launch a rights issue to raise €5.5bn.

On Thursday morning, SocGen announced the shocking news: one employee had put the future of one of France’s largest banks at risk.

The Financial Times notes that to avoid being taken over by sovereign wealth funds, SocGen is going to its own shareholders (and who might those be…)

SocGen’s failure is bound to add to scrutiny of banks. Mary Schapiro, chief executive office of the Financial Industry Regulatory Authority, the US body overseeing broker-dealers, yesterday said: “It is quite surprising positions of that magnitude would not have been monitored much more closely in this era of enhanced risk management.”

SocGen joins the growing list of financial institutions seeking to raise fresh capital. Until now, this activity has been limited to large investment banks that have turned to sovereign wealth funds. But it was only a matter of time before a bank decided to turn to its own shareholders.

SocGen’s rights issue will have made this harder for other banks to contemplate.

And speaking of sovereign wealth funds, controlled by among others countries armed with petrodollars and Wahabism, even the IMF wants them more regulated…and the Saudis were protesting they need their secrecy, at the Davos conference occurring at exactly the same time as the SocGen meltdown:

The IMF’s move comes as countries with sovereign wealth funds and recipient states skirmished at the World Economic Forum in Davos over the need for a code of conduct for such state-owned investment funds.

The US Treasury and other advanced nations insist on the need for guidelines to cover the transparency of the funds and to prohibit aggressive behaviour by the funds as investors.

Lawrence Summers, the former US Treasury secretary, recognised that sovereign wealth funds had so far proved model investors but was baffled why, if they intended to continue to behave well, there was reluctance to sign a code of -conduct.

Speaking about a hypothetical and damaging piece of state-led pressure from a sovereign wealth fund, he said: “The argument, ‘We’ve never done x, but it would be the end of the world if we were to refuse to do x’ is not entirely reassuring for people concerned about x.”

But Mohamed Al-Jasser, vice-governor of the Saudi Arabian Monetary Agency, the country’s central bank, replied that such statements implied that “the sovereign wealth funds are guilty until proven innocent”.

They ARE “guilty until proven innocent. ” Sovereign wealth funds represent the interests of national elites, not the market, and Islamist nations such as Saudi Arabia are imperialists looking to assert their supremacy over other countries.

How interesting to discover who was behind the fraud…stay tuned.