French rogue trader handed €315 million fine
Published: 28 Jan 2013 16:51 GMT+01:00
Updated: 29 Jan 2013 08:45 GMT+01:00
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The court heard that in 2008, at the height of the financial crisis, Boris Picano-Nacci continued to carry out ‘proprietary trading’ in spite of a company-wide ban on the activity, which involves using the institution's own account to trade, rather than that of a customer.
The 37-year-old, who at the time dealt with derivatives, secretly persisted in the high-risk practice and only confessed to his bosses in October of that year, according to French media reports on Monday.
It was only after he owned up, and when his managers wound up all his deals, that the bank discovered the massive losses of an estimated €751 million.
At his trial in December last year, Picano-Nacci had denied any legal violation, though he accepted that his actions had amounted to professional misconduct.
On Monday he was convicted of breach of trust and ordered by the court to reimburse the bank a total of €315 in damages and costs. He was also handed a suspended two year jail sentence.
Reacting to the conviction, a lawyer for Caisse d'Epargne insisted that if Picano-Nacci couldn’t personally pay back the entire €315 million, he must at least repay more than “a symbolic amount,” according to France Info.
This is the second major ‘proprietary trading’ scandal to hit France in recent years. In October 2012, Jérôme Kerviel lost his appeal against a 2010 conviction for breach of trust. In 2008, his unauthorized trading resulted in the loss of €4.9 billion for his former employer, Société Générale.