If there is one story that stands out this morning amongst all the others it is of what Société Général (SG) described as fraudulent trading by one of their plain vanilla futures specialists. The losses total US$7.2 billion (as in with a ‘b’) utterly overshadowing the bank’s other write-downs of US$3bn (US mortgages and monoline exposure).

A US$7.2bn gouging appears to be the mother of the mother of the greatest single unauthorised trading related loss. Ever.

In what is now the classic style of misdirection the public has come to expect from such situations, SG’s announcement claimed the massive loss was only possible because of the trader in question’s knowledge of the bank’s financial controls and systems. Such as they were.

Now, it is obvious that where a determination to cheat and steal exists no control system is infallible. However, one that leaks to the tune of US$7.2bn suggests, on the face of it, that it simply does not deserve to be called a control system. Yet SG say only one man did it over 2 years. Scarcely credible (and let's leave it at that).

So as much as this is an alleged fraud it is more, it would seem, a gross failure - a monumental negligence conceivably - of internal control and audit. Dodging responsibility for a fraud this size on the grounds that the perpetrator failed to play by the rules is farce of which Fernandel would be proud.

But expect les gars of SG to deny it to the end: Chair and CEO Daniel Bouton had his resignation refused by the Board. Which raises the question that quite possibly the only way to be made to resign in French corporia is to physically expire on the job. And then only maybe.

Separately, the cost of insuring against default on some of SG’s 5 year debt instruments increased by 10 to 20 basis points this morning. Anything less would belie the colossal scale of this episode.