Claremont Insider: More CMC News

Wednesday, February 6, 2008

More CMC News

Claremont McKenna College is having a rough week.

First, there was the news yesterday that the CMC Associated Students received some criticism over their "white party" last weekend, which Scripps College Dean of Students Debra Wood considered racist and sexist.

Now CMC alum Robert Day, who back in September gave the school the gift of a $200 million endowment, is making headlines for a Securities and Exchange Commission investigation into Day's sale of a large amount of stock in French bank Société Générale in December and January.

Day is on the board of Société Générale.

On January 24th, Société Générale reported a loss of $7 billion as the result of the actions of trader Jerome Kerviel. An Associated Press article on Monday gave a timeline of the stock sales by Day and two foundations he is associated with:

According to filings last week in France, Day and the charitable foundations sold shares in Societe Generale on Jan. 9, Jan. 10 and Jan. 18. The bank says it launched an internal investigation on Jan. 18, after transactions by rogue trader Jerome Kerviel raised red flags. The stock sales by Day and the foundations totaled $206 million.

The bank made its bombshell-loss announcement on Jan. 24.

Day, through a spokesperson, denied any impropriety in the stock sales, according to the AP article:

The spokesman for Day, Josh Pekarsky, said in an e-mailed statement: "Mr. Day and his family's trusts and charitable foundations sold Societe Generale shares in December and January, which was a window of time where such trades were permitted under Societe Generale's trading policies. All required government disclosures were made. No inside information was used in any way with respect to these sales. Mr. Day has pledged his cooperation into any inquiries of this matter."

An article in the British newspaper The Guardian yesterday indicated Société Générale doesn't believe that Day used any inside information to prompt the stock sales:

SocGen has defended Day, saying that he had not been advised of Kerviel's trading losses at the time of his sale of stock - nor was he aware of write-downs related to sub-prime mortgages which, SocGen said, were presented to its board on January 20.