Open

Coming up

Don't miss

Replay


LATEST SHOWS

#TECH 24

Anonymous Vs ISIS

Read more

AFRICA NEWS

Ebola virus: US to send 3,000 troops to West Africa

Read more

AFRICA NEWS

Nigeria attack: Bomb blast in college in Kano

Read more

AFRICA NEWS

Ebola: Lockdown brings Sierra Leone capital to a halt

Read more

MEDIAWATCH

Sarkozy's political comeback: did he ever leave?

Read more

DEBATE

The World This Week

Read more

FRANCE IN FOCUS

Travel chaos: Air France pilots take industrial action

Read more

THE BUSINESS INTERVIEW

Christian Kastrop, Director of Policy Studies, OECD

Read more

AFRICA NEWS

Ebola: UN Security Council unanimously passes resolution

Read more

Business France

French 'rogue trader' probe ends paving way for trial

Video by Louis MASSIE , Lise BARCELLINI

Latest update : 2009-01-27

Jerôme Kerviel, the trader blamed for French bank Société Générale's 4.9 billion euros worth of losses in derivatives trades, could soon face trial after judges called an end to a year-long probe into one of France's biggest banking scandals.

AFP - French investigating magistrates ended their year-long investigation of alleged rogue trader Jerome Kerviel and his bank Societe Generale on Monday, clearing the way for a trial, officials said.
  
Kerviel and his former assistant, Thomas Mougard, could now face court over charges they concealed a series of risky derivatives trades from his bosses and ending up costing SocGen 4.9 billion euros (7.1 billion dollars).
  
At the time, Kerviel's losses amounted to one of the biggest rogue trading scandals in history and shook confidence in French banks, but many banks have since written off far greater sums following the sub-prime debt meltdown.
  
Now that judges Renaud van Ruymbeke et Francoise Desset have concluded their enquiry, state prosecutors will study their conclusions and decided whether or not to recommend that they take 32-year-old Kerviel to trial.
  
The defendants also have three months in which they can demand further hearings to introduce new evidence to the enquiry. Both are free on bail.
  
Kerviel is accused of breach of trust, fabricating documents and illegally accessing computers. Mougard, 24, was charged in August with "complicity in introducing false data into a computer system."
  
During the investigation Kerviel insisted that SocGen's bosses knew about his risky off-the-books trades, but were happy to let him continue as long as he racked up multi-million-dollar profits.
  
The bank -- which is suing its former employee in a parallel civil action -- denies this, and Van Ruymbeke and Desset signalled during their investigation that they regarded Kerviel as an unreliable witness.
  
Nevertheless, France's banking regulator fined Societe Generale four million euros in July for what were branded "grave deficiencies" in internal controls, which allowed the situation to go undetected for so long.
  
The banking commission also issued a formal warning to the bank for failing to prevent the losses. Five bank employees were fired and two others resigned.
  
Huge losses were uncovered when the bank was forced to unwind more than 50 billion euros in unauthorised deals Kerviel is said to have made, at a time when he was employed to limit the bank's exposure to trading risk.
  
Described by workmates as a quiet, unassuming trader, Kerviel surrendered to police on January 26, two days after the bank revealed the losses.
  
He has since become something a folk hero to some elements of French public opinion exasperated by the excesses and misdeeds of the world of high finance, at a time of global economic misery.

Date created : 2009-01-26

COMMENT(S)