Societe Generale, France's second largest bank, said on Thursday that alleged fraud by one of its junior traders led to a $7.2 billion (4.9 million euro) loss.
Societe plans to raise 5.5 billion euros after reporting the trading loss and write-downs related to subprime mortgages, the bank said in a statement today.
Chairman Daniel Bouton offered to resign after the unauthorized trades last week but the company's Board of Directors refused, the bank said.
Bouton said in a statement the allegedly fraudulent stocks futures transactions were simple but were hidden through extremely sophisticated ways.
The bank named 31-year old Frenchman Jerome Kerviel as the trader responsible, according to the Wall Street Journal. He began working at the bank in 2000.