The Gap

Meet the poorest person in the world owing a whooping $6.3 billion

Meet the poorest person in the world owing a whooping $6.3 billion

The largest bank account balances determine the wealthiest men in the world. So, it can be inferred that the poorest men in the world can be determined not only by the balance remaining in their accounts but also by how much debt they have to pay off. This is the case of Jerome Kerviel, the poorest person in the world.

Kerviel was living quite a decent and comfortable life before the situation that led to him being tagged as the poorest person in the world. Without any further ado, let’s get into details on the life of Jerome Kerviel and how he became the poorest person in the world.

Who is the poorest person in the world?

Jerome Kerviel, the poorest person in the world on a phone call

Jerome Kerviel has become famous for being tagged as the world’s biggest debtor. He was born and raised in Pont-l’Abbé, a commune in Brittany, situated in northwest France. His father, Charles, was a blacksmith and Marie-Josée, his mother, is a retired hairdresser. He comes from a family of four, with one older brother, Olivier.

Kerviel obtained a Master’s degree in Finance from Lumière University Lyon in the year 2000, majoring in the organisation and control of financial markets. He had earlier bagged a bachelor’s degree in finance from the University of Nantes. He was previously married, but he and his wife divorced in 2008.

How did Jerome Kerviel become the world’s poorest person?

Kerviel worked for the Société Générale in 2005 as part of the company’s Delta One division, which includes software investment, exchanges, ETFs, algorithmic trading, and equity derivatives. He worked as a junior-level derivatives trader, making approximately US$66,000 per year. 

Kerviel might have anticipated that a single high-risk business strategy would put him on the list of the wealthiest individuals ever, without carefully considering how dastardly the opposite result could be. In the long run, due to his thirst to accumulate a huge net worth, he would suffer terrible and almost unrecoverable losses

He is thought to have begun his illicit activities between the end of 2006 or early 2007. He reportedly utilised staggering sums of money to engage in arbitrage trading, which involves making money when numerous equities trade at different prices when they should all be trading at the same price. He reaped enormous profits in advance of declining market prices. He would make losing trades at the same time to offset his early victories and earnings. It served him well for a while, but his time was running out. 

ALSO READ: 15 richest pastors in the world, their sources of wealth

Kerviel’s woes began on January 19, 2008, when his bosses discovered his unlawful operations and trading. According to the investigation, he had created a stock index accumulation of around $73 billion by January 9, 2008. This resulted in a $7.2 billion loss for Société Générale. Jerome had been connected to several trade frauds, according to a report made public by SocGen.

By the time the scheme was discovered, he had accumulated significant debts and liabilities and owed the business $6.3 billion, which he will never be able to pay back.

It is still unknown how much illegal trading took place without being noticed at all, despite Société Générale bank asserting that Kerviel had operated alone. It is argued that he exercised this method outside the scope of his authority and could not have completed it on his own. Through his attorneys, Kerviel contended that he had carried out all of those actions to benefit his employer.

With the amount of money he is owing, Kerviel has ultimately been tagged as the world’s poorest person. The nature of his downfall will never be forgotten in the annals of financial fraud.

Arrest

Jerome Kerviel, the poorest person in the world arrested in France
Jerome Kerviel, centre, followed by his lawyer, Olivier Metzner, second right, arrives at the Paris courthouse.

At the very least, Kerviel must be an expert computer user because he was accused of gaining unauthorised access to Societe General’s trading systems. In addition, he was charged with fraud, breach of trust and overstepping his bounds. Kerviel cost Société Générale approximately €4.9 billion ($7 billion) in total.

He turned himself into the police in 2015 and spent three years in prison before being freed. Even though he is attempting to put his life back together, it is difficult to believe that he will ever be able to make good on that debt.

Net worth

Kerviel’s net worth currently reads a negative, minus $7 million. He owes this money to Société Générale, the bank, where he previously worked. This is the highest debt associated with an individual in contemporary times.

Top five poorest persons in the world 

This list contains the names of the biggest individual debtors in the world. It is nearly impossible to determine who is the poorest person in the world on an individual basis.

However, this list highlights the poorest persons in the world solely because of their incurred debt.

Jerome Kerviel

Jerome Kerviel

Eike Batista

Eike Batista

With a balance of less than $1 billion, Brazilian-German serial entrepreneur, Eike Batista, once among the richest people on earth, is now among the lowest. 

The EBX Group, headed by Batista, was a conglomerate that included several businesses, including OGX (oil and gas), MPX (energy), LLX (logistics), MMX (mining), and OSX (offshore services and equipment).

Batista committed to advancing Brazilian infrastructure and took part in large-scale industrial projects, but he overextended himself and his company, which ultimately caused his downfall and the fall of his empire. He was the richest Brazilian and seventh richest person in the world in 2012, with an estimated net worth of $35 billion. Due to the declining stock prices of his company, he was now worth $200 million by July 2013.

He is currently one of the biggest borrowers in the world, with no chance of payback after the accumulation of his debts and the liquidation of his company reduced his value to below $1 billion. He was sentenced to 30 years in prison for paying the then Rio de Janeiro Governor, Sérgio Cabral, to win governmental contracts, which made his predicament worse.

ALSO READ: Top 10 richest men in Nigeria, Africa, the world

Thomas Joseph Petters

Thomas Joseph Petters

The American public was duped out of around $2 billion by a former businessman Thomas Joseph Petters. He is serving a 50-year sentence in prison right now. Petters was one of the nation’s most renowned and admired businesspeople.

But until one of his employees came forward to confess to the police and aid them in their investigation, not even the US government had any suspicions that he was operating a bogus business operation and robbing people of their money.

He teamed up with the direct mail marketing firm, Fingerhut Companies Inc., in 2001, and together they launched Redtagbiz.com, an improved version of the online marketing firm. At its height, it was so prosperous that it brought in about $1 billion annually.

Peters established multiple Ponzi schemes and he funded his retail endeavours with the proceeds. Then he made fictitious purchases at retail stores to convince lenders to grant him loans so he could grow his company.

Barry Jay Minkow

Barry Jay Minkow

Barry Jay Minkow was previously a wealthy businessman, but he currently has a $612 million negative balance in his bank account. The business was called ZZZZ Best and it specialized in carpet cleaning and repair.

After he saw the success of his cleaning company, out of greed, he created a Ponzi scheme and employed ZZZZ Best as a cover for his fraudulent activities. The company did fail in 1987 and the public lost roughly $100 million, as a result. 

He was imprisoned and following his stay in jail, he felt regret. He changed his profession to a preacher and collaborated with law enforcement to look into fraud. However, when it was discovered that he manipulated the value of stocks on the stock exchange, he was promptly sent to jail once more.

Scott W. Rothstein

Scott W. Rothstein

Scott W. Rothstein once had a great deal of success in the legal profession. He currently owes $279 and will likely serve 50 years behind bars (as declared by the judge). He served as chairman, chief executive officer, and managing shareholder of the now-defunct Rothstein Rosenfeldt Adler legal firm.

With a $1.2 billion Ponzi scam, Rothstein led a lavish lifestyle and stole hundreds of millions of dollars from the bank in which his company’s account was domiciled. Additionally, he was alleged to have used top-secret information obtained from clients, some of which were prestigious corporations.

His Ponzi scheme had an estimated worth of $1.2 billion, making it one of the largest in recorded history. 

ALSO READ: Top 10 richest male, female footballers in the world

Previous ArticleNext Article
Send this to a friend