Well, That’s One Way to Shift Attention Away From Mortgage Losses

Although something tells me SocGen would rather have the focus be on bad mortgage bets than on the largest trading loss in investment banking history. The earnings statement, released this morning, begins with the following sentence:

Societe Generale Group has uncovered an exceptional fraud in a sub-section of its market activities.

Not the way you’d want to start any press statement, let alone an earnings announcement. That fraud, reports the Wall Street Journal, was due to a single futures trader — and led to a stunning $7.2 billion write-down. And it has a way of making a $3.01 billion loss due to subprime mortgage and derivative exposure seem, well, small.

The really ironic thing? SocGen was just named “Equity Derivatives House of the Year” by Risk Managment magazine, a few short weeks ago — see here for yourself. The magazine lauded SocGen for “for consistently providing liquidity during the market turmoil.”

As Felix Salmon at Portfolio.com notes, we now know where some of that liquidity might have been coming from.