2 Top Officials of Paris Bourse Quit in Scandal

Two top French stock market officials resigned Tuesday following the disclosure that the Bourse regulatory body lost 500 million francs ($86 million) in unsupervised trading after last October’s crash.

Xavier Dupont, architect of the recent Paris Bourse reforms, stepped down as chairman of the French stockbrokers’ association, SBF, at a crisis board meeting called to examine how the body lost a third of its bailout funds following the crash.

The scandal, described by senior officials as a catastrophe, also forced the resignation of Philippe Cosserat, the government’s representative on the SBF board.

“Faced with this catastrophe . . . it is the credibility of the whole market which is under threat. We have to put our house in order and find out what happened,” said Regis Rousselle, SBF vice president who was appointed Tuesday to replace Dupont as head of the SBF.

Confirmation of the resignations came in an SBF communique about midday, simply announcing the appointment of the 40-year-old Rousselle to Dupont’s post.

Move to Cover Losses

The scandal is the worst to hit the Bourse since the sweeping reforms of the past two years, which have seen the creation of the financial futures market (MATIF) and the end of the stockbrokers’ monopoly on share-trading granted by Napoleon at the start of the 19th Century.

Rousselle said the SBF would ask its members for a 1-billion-franc ($172-million) capital increase for the SBF, of which half would be to cover the losses.

Paris broker Jean-Pierre Pinatton said Dupont’s failure had not been so much the fact that the loss had occurred as that he had not kept other brokers informed of the situation.

“I lost money in this affair, and the first I knew about it was when I read my newspaper on Saturday. It was Cosserat who failed to supervise and Dupont who failed to inform,” he said.