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Business

French 'rogue trader' boss investigated for fraud

Text by NEWS WIRES

Latest update : 2009-08-07

Jean-Pierre Mustier, the former head of the Société Générale division where alleged rogue trader Jerôme Kerviel worked, will be leaving the French bank after financial regulators identified him as a supect in investigations for fraud.

AFP - A former boss of alleged French rogue trader Jerome Kerviel at Societe Generale is being investigated by French financial regulators for insider trading, the bank said in a statement on Thursday.
  
The Financial Markets Authority (AMF) has identified Jean-Pierre Mustier, formerly head of Societe Generale's corporate and investment banking division where Kerviel worked, as a suspect and he will leave the bank, it said.
  
Contacted by AFP, Mustier declined to comment.
  
In an interview published on the website of French news magazine Nouvel Observateur late on Thursday, Mustier said: "After the Kerviel affair, I think that ethically it was important that I leave the bank."
  
Robert Day, a Societe Generale board member, is also under investigation, the bank said, without specifying whether he would leave the bank.
  
Day sold 40.5 million euros in Societe Generale shares on the same day that the Kerviel affair first surfaced but the bank later said that he had no knowledge of the losses incurred by Kerviel when he sold his shares.
  
Societe Generale did not say if the investigation of Mustier and Day was linked to the Kerviel inquiry, which began last year after staggering trading losses were uncovered.
  
The bank did say, however, that both bankers deny wrongdoing.
  
Kerviel and his assistant Thomas Mougard have been charged over the loss of 4.9 billion euros (7.0 billion dollars) in alleged unauthorised derivatives trading at Societe Generale, one of France's three biggest banks.
  
Kerviel has defended himself saying that he is the scapegoat for wider problems with Societe Generale's control mechanisms for trading.

Date created : 2009-08-06

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