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Alok's Posts / Startup

How Societe Generale tried to Scam me!

The Sanjeev Agarwal incident with Citibank has triggered me to finally spill these beans:

In 2007, Societe Generale (Mumbai) was partially handling the Treasury function of my business group – c2w Group of Businesses (

A lady called Sanghamitra Mukherjee was our designated manager.

The Corporate business of c2w group is mainly liquid and FMP investments since we dont like to take market risks on our balance sheet. Largely there were no problems on that account except for bad investment choices that Soc Gen recommended to us like Lotus Liquid Fund (that actually stalled payment for 3 days on redemption date!!). I suspect Soc Gen earned more commission on such inferior funds and made us guinea pigs. 

Some time in 2007, Sanghamitra approached me and suggested I  start a Personal Wealth Management type of account with Societe Generale. I cant remember what they actually called it.

Individually, I am fully invested in very long term Pure Equity Mutual Funds (HDFC 200 types) since I believe that real wealth gets created only via Equity invested for 10+ year horizons. And since I run businesses, I leave the Mutual Funds to invest on my behalf (not that even if I tried I would succeed in selecting individual stocks). So my entire wealth is in long term equity MF’s. 

I was initially reluctant to open this account since I never believe in trading day to day equity (The Fortune magazine once reported that no day to day trader ever made net money over a long career).

Yet Sanghamitra was persistent and said I should give it a try.

In an experimental frame of mind (and not listening to my wife’s objections), I agreed to start the account and I (STILL THANK MY STARS) – only put 20 lacs into it (phew). 

I remember Sanghamitra asking me once – ‘Alok, what do you want’?

I said ‘A BMW 5 series’.

She said ‘Fair enough – invest 20 lacs first, and I will multiply it to get you a BMW 5 series’

I bought the plan.

An important point to note is that the account was ‘non discretionary’ – that means that for ever trade, Soc Gen would call me on the phone (recorded and stored by them) and ask for my permission to do that trade. I hated that construct (would disturb me) and actually suggested they make it ‘discretionary’ – which meant they could do anything with my money, but RBI/SEBI (one of them) had not granted them permission to do so.

In the weeks that ensued, Sanghamitra would call me and ask my permission to buy Stocks that Soc Gen was recommending. Also, she executed some sales. Like a dumb Robot, every time she would call, I would say ‘Yes, Yes, Yes’, sometimes even before the question was asked. 

I IMPLICITLY TRUSTED SOC GEN AND SANGHAMITRA and hence didnt really care which stock and shares I was saying yes to buy or to sell!

In between, Sanghamitra would call excitedly and say, ‘Alok we made x on this and y on that’, but I am a hard core Marwari and would always tell her – ‘Dont impress me with individual trades – show me the net gain’.

The XIRR % on the portfolio till end of 2007 was 15-18% (annualized), which honestly didn’t impress me much. 

Post Jan 2008, when the markets tanked, the portfolio went negative. 

I kind of shrugged it off thinking its typically market movements and it will take a couple of years to improve. (In 2008, the mood was very dismal).

Sometime later that year, Sanghamitra called and told me she was quitting Soc Gen and moving on. She introduced me to her Colleague who was taking over and I bid her goodbye.

The portfolio was pretty much in shambles by then.

One day, the new Soc Gen lady in charge of my account paid a courtesy visit to me and also bought her Equity Analyst with her. They wanted to do a quick review of my account.

When she started ticking off individual stock names, I interrupted her and reminded her that I had no clue what was bought and was not interested, coz all the suggestions were Soc Gen’s – as routed by Sangha to me via phone. Hence they should do what was appropriate.

‘No Sir’ the new Manager said. ‘These x an y shares’ were never recommended by Soc Gen!!! 

I WAS STUNNED. I HAD NO CLUE WHY SANGHAMITRA had asked me to buy those shares (and they were the ones down 90-95%). 

I immediately called Sanghamitra on the phone in front of her ex Employers officers and confronted her with the situation.

‘Alok, I recommended these stocks myself – they were not from the Bank’ replied Sanghamitra!!! 

I had been cheated into believing that Soc Gen was asking me to buy shares – on the recorded phone calls that I had said YES to – and now I was learning that the Share choices were of an individual (Sanghamitra) whom I did not know!! 

End of story – I thank God that I only invested 20 lacs (Imagine Sanjeev Agarwal who has lost 32 crores of his own money).

The money in the bank can now just about buy me a Corolla – forget a BMW (my wife always likes to remind me). Thankfully in 2010 and this year, most of the shit inside is now turning positive.

Soc Gen’s India head etc visited me and apologized etc, but legally I decided to stay quiet coz on the phone I had said ‘Yes’ to all the trades. 

Lessons learnt: 

All these fancy Banking Companies are just out there to Churn your money. They have very poor or no internal controls. They wine and dine you just to fool you. And when in trouble, they shrug their shoulders. 

Just buy long term Mutual Funds as ranked in the papers everyday and be happy. They return 20-25% IRR’s over 5-7 year horizons which is more than anything you can ask for.

Also check – My simple quiz that every Investment Banker and Financial whiz has FAILED IN



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  1. Bean Counters !

    Thank god I am a Seed Planter – I (try to) create real value.

  2. Best is to buy property in Tier I-II cities, at least 15%-25% safer appreciation plus rental income.

  3. Completely agree with Alok here; though one could also directly invest in Front-Line Sensex / Nifty Stocks with a 3-5 year term view

  4. Intresting that Soc Gen has not contacted me yet….let’s hope they sue me…..

  5. My paranoia kicks in and I imagine that this non-discretionary thing maybe some smart banker who twisted the SEBI/RBI into setting that rule to protect their own backsides…

  6. I agree Alok…if the common man uses his own intelligence…I think he can prosper more…..we can be logical and earn something easily….

  7. Thats on the front end.  Here’s what’s happening in the back rooms of Morgan Stanley: The Real Housewives of Wall Street


    Which is why I keep saying there is more than enough money to give everyone on the planet a luxurious condo, a BMW, food on the table forever, and still have enough left over to sponsor an interstellar expedition to Alpha Proxima.

  8. Hey Alok,


    Is it ok with you if I made a case study out of this, and shared the same, with a client? Facing a similar situation with this client, and need to build some case points for the meet and the strategy ahead. 


    I can keep your name confidential, but knowing you, I doubt that’d be critical factor of consideration. 🙂


    Pls do advise. 




  9. please expose EVERYTHING

  10. More than the greed of the banker or all those stock market analysts, the problem lies in our own greed to earn fast money from stocks. We speculate, and call that investing. Taking control of their investments, and knowing what they are doing with their money, is what separates successful investors from the doomed ones. 


    As Warren Buffett so often says, The chains of habit are too light to be felt until they are too heavy to be broken.”


    By the way, I have been a stock market analyst for the past eight years (that industry really stinks!), and have met innumerable investors who’ve lost all their savings just because they went by the advice of their ‘smart’ advisors. The only job the analysts, i-bankers, and other stock market forecasters have is to make fortune tellers look good. 

  11. Trading is gambling. Period. It’s the worst thing you can do to your money. That said, you seem to have really unrealistic expectations with return on investment. An IRR of 10%over 10 years would be enviable. Consistently getting over 20% over a long time frame is like expecting a miracle.

  12. @Abey John, Super Like..

  13. Was just randomly reading this article. and came about this comment.

    Nishant Sir:
    1) Have you been a trader? If you have never experienced Trading as a profession, how can you declare it as a gambling!
    2) Oh! So it is the worst thing that you could do to your money. I vehemently disagree. The worst thing you could do is to invest in debt and lose the value of the money as inflation rate outpaces debt rates.

    Discretionary and System Traders are two types of trading..
    Ever heard about system trading. How successful traders have built systems and implemented them.

    The problem with people present over here is they do no have complete idea about Trading, but they just have to follow herd mentality and abuse the profession.

    I am not pinpointing at you alone, but in general.

    In fact I feel very sad, that Alok Sir is also averse to Trading.

    Be it any profession, there are good ways of doing certain things, and bad ways too.
    Unfortunately, in this forum, I only see bad things about Trading.

    P.S- I am 24 years old. Have been trading with dummy money. I am learning since past 2 years! yes past 2 years I have put my efforts in to this wonderful profession, where people think they will earn millions in few days!
    Sorry if I was rude. Just could not stand this Trading -bashing!

    P.S – Example of a System
             What exactly is System Trading

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