Appeal hearing opens for French rogue trader

Jérôme Kerviel, the rogue trader whose misplaced gambles almost brought the leading French bank Société Générale to its knees, began his appeal Monday against a 2010 conviction for breach of trust and forgery.

Appeal hearing opens for French rogue trader
Frederic Houmbert

The 35-year-old Frenchman had been sentenced to five years in jail with two years suspended for breach of trust, forgery and entering false data into computers during the 2008 covert stock market deals.

“I am not responsible for this loss and the acts I am accused of. I always acted with the knowledge of my hierarchy,” he told the judge when asked why he was appealing his 2010 conviction.

The original verdict also required him to pay back the staggering €4.9 billion ($6.0 billion) his market gambles cost Société Générale.

But for the critics, that ruling made him a scapegoat for a banking system based on pure greed.

His actions almost destroyed Société Générale just months before the subprime crisis.

But Kerviel argued that his superiors knew what he was doing and had turned a blind eye as long as he was making them a profit.

Rejecting charges that he acted alone, he insisted the firm knew all about his $50 billion in trading positions, and even encouraged him to take risks.

Kerviel admits regularly exceeding trading limits and logging false transactions to cover his gambles, but says this was common practice.

Société Générale management has argued it knew nothing of what Kerviel was up to.

Two months ago, Kerviel changed his lawyer, hiring David Koubbi, who has launched two countersuits against Société Générale.

One accuses the bank of allegedly manipulating secret recordings to make it appear that the trader’s superiors were unaware of his activities.

The other says that while Kerviel was ordered to repay the €4.9 billion he lost, the firm has already been repaid a third of that sum in the form of a tax write-off — paid for by the taxpayer.

Société Générale, which said in 2010 that it would spare Kerviel paying the full compensation, has hit back with two suits for malicious falsehood.

Since the Kerviel case exploded, banks have insisted that internal safeguards have been reinforced to prevent a repeat.

Société Générale was fined €4 million at the time by the bankingcommission for failing in its internal checks.

If convicted on appeal, Kerviel faces up to five years in prison and a fine of €375,000.

The trial is set to last until June 28th.

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France’s Societe Generale to cut 1,500 jobs: report

French banking group Societe Generale is planning to cut 1,500 positions in its BFI corporate and investment banking arm, Le Figaro newspaper reported on Saturday.

France's Societe Generale to cut 1,500 jobs: report
Societe Generale CEO Frederic Oudea at the Climate Finance Day and Global Roundtable in Paris on November 26, 2018. Photo: ERIC PIERMONT / AFP
Citing internal bank documents, the paper said the bank was looking at two scenarios, both of which envisage 1,500 job cuts worldwide, with around 700 of them in France.
The company said in a statement on Saturday it was still reviewing activities in its corporate and investor client business so it was not possible to comment on the impact on jobs.
“We have an ongoing dialogue with our unions and will consult them on our projects and their impact as soon as the review is completed in the coming weeks,” the bank said.
French CGT union representative Philippe Fournil could not confirm the information, but said the bank's management had on Thursday indicated it was still reviewing activities within that business.