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Business

Prosecutors demand four-year sentence for rogue trader Kerviel

Video by Elena CASAS

Text by News Wires

Latest update : 2010-06-24

French prosecutors requested Thursday that rogue trader Jerome Kerviel be sentenced to four years in prison over alleged illicit trading that cost the French bank Société Générale €5 billion in losses.

AFP - French prosecutors on Thursday demanded that former trader Jerome Kerviel serve at least four years in jail for the rogue trading scandal that almost brought down Societe Generale bank.
   
State prosecutors Jean-Michel Aldebert and Philippe Bourion called for a five-year sentence with the fifth year to be suspended for Kerviel, who is charged with breach of trust, forgery and entering false data into computers.
   


Kerviel is accused by Societe Generale, one of Europe's biggest banks, of losing it 4.9 billion euros (7.1 billion dollars at the time) in early 2008 through unauthorised trades.
   
The 33-year-old has admitted regularly exceeding trading limits and logging false transactions to cover his gambles, but says this was common practice and that his bosses turned a blind eye as long as earnings were high.
   
Aldebert branded him a "professional fraud."
   
"Never has the criminal definition of breach of trust been so well-named," the prosecutor told the court in Paris on the penultimate day of the trial.
   
Bourion called Kerviel an "exceptionally talented actor" who committed a "historic" fraud, citing evidence from the trial that Kerviel had deceived his colleagues.
   
He summed up the former trader's defence as: "No one stopped me so I am not to blame." Kerviel's actions could have lead "quite simply to the destruction of Societe Generale," Bourion said.
   
On discovering the risky deals in January 2008, Societe Generale was forced it to unwind positions worth 50 billion euros -- equal to nearly all its shareholder capital at the time.
   
The bank has admitted failings in its controls, for which it was fined four million euros in July 2008, but insisted at the trial that managers could not have tracked all Kerviel's trades when he logged false data to cover them.
   
Societe Generale's president and chief executive at the time of the scandal, Daniel Bouton, told the court on Tuesday that the trading scandal was a "catastrophe" caused by Jerome Kerviel's "lies."
   
Societe Generale's lawyers said it wants 4.9 billion euros in compensation from Kerviel. He could also face a fine of 375,000 euros.
   
"It is obvious that Mr. Kerviel will not pay" the sum sought by the bank, Societe Generale's lawyer Jean Veil conceded, adding that the amount was decided upon for the sake of "simplicity."
   
The trial has lasted almost three weeks and heard from more than 30 witnesses but has shed little light on what motivated Kerviel.
   
"Why did he do these things? Hoping for a bonus? To become a star?" Bourion asked. "That's the only mystery the prosecution will not be able to solve."
   
In his last address to the court on Tuesday, Kerviel repeated his claim that he was "someone who had tried to do his job in the interests of the bank."
   
"There is no Kerviel mystery," he said.
   
The trial ends on Friday and the court is expected to deliberate for several weeks before handing down a verdict.

Date created : 2010-06-24

  • FRANCE

    SocGen demands €4.9 billion from Kerviel to compensate losses

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  • BANKING

    Ex-SocGen boss says trading scandal caused by Kerviel's 'lies'

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  • BANKING

    Former Societe Generale boss gives evidence in 'rogue trader' trial

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