Ex-SocGen boss fined for insider trading

30th June 2010, Comments 0 comments

French banking authorities on Wednesday fined a former manager at Societe Generale 100,000 euros (123,000 dollars) for insider trading when he was a boss of the alleged fraudster Jerome Kerviel.

France's Financial Markets Authority (AMF) said Jean-Pierre Mustier in August 2007 sold off lots of his stocks and bonds in the French bank Societe Generale before a drop in the markets.

It said that at the time he possessed "privileged information" about risks to the bank's asset values linked to the collapse of the US mortgage market.

As head of the bank's investment banking division, Mustier was the boss of Kerviel, who stood trial this month accused of secretly gambling away nearly five billion euros in losses, in one of the biggest rogue trade scandals.

Testifying at that trial, Mustier described how he had helped unravel Kerviel's risky trades when they came to light in January 2008 and then resigned as head of the investment division.

Kerviel's defence alleged Mustier was partly responsible for the failure of the bank's internal controls as Kerviel breached trading limits and ran up risky positions worth billions that nearly brought down the bank.

The AMF also on Wednesday absolved a former member of the bank's board, Robert Day, of insider trading charges for selling 40 million euros' worth of shares on the day that the bank discovered Kerviel's excesses.

© 2010 AFP

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