Former Societe Generale boss gives evidence in 'rogue trader' trial
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Rogue trader Jerome Kerviel faces former Societe Generale chairman and CEO Daniel Bouton this week at the criminal trial over the bank’s 4.9 billion-euro trading loss.
Rogue trader Jerome Kerviel faces Daniel Bouton - the former chairman and CEO of Societe Generale and the man who once called him a “terrorist” - this week at a trial over the bank’s 4.9 billion-euro trading loss.
The high profile trial will attempt to determine how a single trader, then aged 31, was able to build up positions worth an estimated 50 billion euros without senior Societe Generale executives noticing.
The trial pitches the bank’s argument that the rogue trading, the largest banking scandal in French history, was the work of a single individual, against Kerviel’s contention that his bosses knew what he was doing and failed to put the necessary systems in place to prevent such practices.
SocGen has denied tacit complicity and demands Kerviel be sentenced.
Bouton will testify Tuesday after Judge Dominique Pauthe called on the former Societe Generale chairman and CEO and to appear before the court following a request by shareholders involved as plaintiffs.
Bouton had initially refused to attend the trial and has told reporters that he has never met Kerviel, nor did he ever want to.
His presence was not demanded by defense lawyers, who acknowledge that Bouton was not personally aware of what Kerviel was doing, neither by lawyers for the bank, who maintain that the idea of Bouton testifying at the criminal trial is “ridiculous”. But lawyers for five employees or retired employees who are shareholders asked for Bouton’s presence as a civil party.
Daniel Richard, the lawyer for the shareholders, is set to question Bouton about the corporate values at the bank during the Bouton years, which, shareholders charge, fostered a work atmosphere of unbridled profit.
The target of repeated attacks by French President Nicolas Sarkozy following the discovery of the extent of the trading scandal, Buoton eventually resigned in April 2009.
A bottle of champagne to patch up trading gaps
On Thursday, the court heard that Kerviel had offered an internal controller a bottle of champagne if she could patch up a discrepancy between trades he had reported and those booked in the system.
Marine Auclair testified that Kerviel appeared “fairly nervous” and told her that if she took care of the gap, he’d give her a bottle of champagne.
Auclair said she never received any champagne from Kerviel and told the court she believed his explanations were “crude”.
Kerviel risks five years in prison and a 375,000 euros fine if found guilty of charges of breach of trust, computer abuse and forgery. His trial began on Tuesday amid a media frenzy over one of the most famous faces of the financial crisis in France.
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