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French court drops €5b penalty for rogue trader

AFP/The Local · 19 Mar 2014, 14:43

Published: 19 Mar 2014 14:43 GMT+01:00

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Jerome Kerviel, who lost his appeal Wednesday against a three-year jail term for his part in France's biggest rogue-trading scandal, casts himself as a simple soul caught up in an orgy of greed.

The 37-year-old was convicted of forgery and breach of trust for gambling away nearly five billion euros ($7 billion) in risky deals as a star trader at Societe Generale, one of Europe's biggest banks.

But in Wednesday's ruling, a top French appeals court cancelled the €4.9-billion he had been ordered to pay back, referring the issue to another court.

Branded a crook by his ex-employer and a scapegoat by defenders, Kerviel insisted his bosses knew what he was doing and turned a blind eye to possible breaches of rules as long as he kept the profits rolling in.

He is currently on a trek from Rome to Paris to  highlight the "tyranny of the markets" and last month even met Pope Francis.

Even as he racked up billions for the bank in its skyscraper in Paris's La Defense business district, Kerviel lived modestly in a small suburban flat and took the train to Brittany in the holidays to visit his widowed mother.

"I am an ordinary person. I am not crazy," he said during investigations into the scandal after Societe Generale was driven to unwind 50 billion euros of risky deals that it blames on him.

"I didn't earn millions (in salary) and I didn't drive a Porsche," said Kerviel, who was paid 50,000 euros a year plus tens of thousands more in bonuses when the scandal erupted in January 2008.

"Have you seen my apartment? Forty-five square metres (485 square feet), no masters' paintings. Ikea furniture," he added.

Some commentators have interpreted his big risk-taking as motivated by the desire to prove himself, a young man from a modest background, among the ranks of high-flying traders from elite schools.

Societe Generale says he worked out how to circumvent complex risk-control mechanisms and its lawyer Jean Veil accused him of "duplicity" in reassuring his employers that all was well.

Kerviel was born in the small town of Pont l'Abbe, Brittany, to a father who taught metalwork and a mother who was a hairdresser.

He once ran for municipal office as a candidate from ex-president Nicolas Sarkozy's right-wing UMP party but was not elected. He told the newspaper Liberation that as a child he wanted to be a vet.

Instead, Kerviel trained in economics and finance at universities in nearby Quimper and in Nantes and Lyon, where his teachers said he graduated with solid but not exceptional grades.

Story continues below…

He joined Societe General in 2000 where he was promoted to the "front office" five years later to trade futures on European share indices -- effectively betting on the direction of the stock market.

Colleagues at the time described him as a quiet loner. Journalists have likened the fresh-faced ex-trader to the film star Tom Cruise.

He liked the music of R and B singer Alicia Keys and was a big film fan, admitting that he cried at the end of the 3D fantasy "Avatar." Kerviel spent 38 days in custody after his arrest in 2008 and later took up a job at a small IT company in a suburb of Paris.

He said ahead of his initial trial that he hoped it would teach people the lessons of the global financial crisis.

"Respect for work, solidarity, honesty -- I grew up with these notions. But when I became a trader, I lost part of these morals.

AFP/The Local (joshua.melvin@thelocal.com)

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