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France

Trial of French ex-trader Jerome Kerviel delayed pending appeal

Text by NEWS WIRES

Latest update : 2009-09-02

The trial of Jerome Kerviel, the former trader accused of having lost French bank Societe Generale 4.9 billion euros, has been delayed pending the examination of a procedural appeal lodged by his lawyer.

Reuters - The planned trial of French former trader Jerome Kerviel, blamed for huge losses at Societe Generale, has been blocked pending a procedural appeal, his lawyer Olivier Metzner said on Tuesday.

Kerviel, 32, has been under investigation since SocGen in January 2008 unveiled 4.9 billion euros ($7 billion) in losses which it said were caused by unauthorised deals carried out by Kerviel, then a junior trader at the bank.

On Monday, an examining magistrate ordered Kerviel to stand trial on charges of breach of trust, fraud and manipulating SocGen's computer system. The trial was expected to take place within the next 12 months.

But Metzner said that the Cour de Cassation, an appeal court which does not consider the substance of a case but rather examines whether correct legal procedure was followed, had agreed to hear an appeal filed by Kerviel's defence team.

That, Metzner said in an interview on RTL radio, meant that Kerviel's trial in a criminal court -- which will tackle the substance of the case -- was suspended until the Cour de Cassation had made a decision.

It was not immediately clear how long that would take.

The appeal to the Cour de Cassation, filed by Metzner in April, argues that the examining magistrates leading the probe into the SocGen affair had systematically refused to pursue avenues of investigation suggested by Kerviel.

Metzner suggested that in particular, the judges had not looked closely enough at the issue of how much Kerviel's managers at SocGen knew of his dealings.

Under French law, examining magistrates are required to look at all facts of a case, both those that incriminate the suspect and those that strengthen the suspect's defence.

The charges against Kerviel carry a maximum penalty of five years in jail and 375,000 euros in fines.

The ex-financier was freed from prison in March last year after an appeal against his detention, but he has remained under formal investigation ever since.

Kerviel has admitted building up unauthorised trading positions, but has said his supervisors tolerated breaches in its risk controls.

Internal reports by SocGen into the affair show that Kerviel bypassed the bank's control systems to start building up positions in 2005 and 2006 for "small amounts".

By the time SocGen discovered what was going on in January last year, Kerviel had amassed a position worth 49 billion euros -- greater than SocGen's own market value.

SocGen swiftly unwound the positions but suffered a 4.9 billion euro loss in the process which it blamed squarely on Kerviel.

Date created : 2009-09-02

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