Ex-trader sticks up for Kerviel in fraud trial

11th June 2010, Comments 0 comments

A former trader at Societe Generale stuck up for alleged fraudster Jerome Kerviel at his trial on Friday, backing his claims that the French bank knew of risky deals that caused it billions in losses.

The bank accuses Kerviel of secretly gambling away 4.9 billion euros (7.1 billion dollars at the time) in the huge 2008 rogue trading case, seen as a symbol of the excesses blamed for the financial crisis.

Among other witnesses this week, one ex-colleague said Kerviel's "stratospheric" stock market risks nearly brought down the bank and a former top boss accused him of lying to cover up the losses.

On Friday, the court heard the first testimony by a trading room witness no longer employed by the bank -- Benoit Taillieu, 34, who worked as a trader at Societe Generale from 1999 to 2006 and now runs an interior design firm.

Taillieu, who did not know Kerviel, cited the huge sums traded and the earnings Kerviel recorded, saying that bosses must have noticed that they did not correspond to the limits they set.

"It's as if you were told to buy 10 tonnes of strawberries but you find yourself with 10 tonnes of potatoes, and the manager doesn't notice," he said.

Societe Generale, one of Europe's biggest banks, said it suffered the heavy losses when it was forced to unravel 50 billion euros of unauthorised trades in January 2008. Its market capitalisation at the time was about 56 billion euros.

Kerviel, 33, 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 earnings were high.

"For me it is certain, obvious" that Kerviel's bosses were aware of his excesses, said Taillieu.

"Jerome Kerviel may be guilty, but he is not the only one," Taillieu added, saying that while he worked at the bank he noticed "a growth in risk-taking over the years."

Branded a crook by his ex-employer but seen by others as a scapegoat, Kerviel faces up to five years in jail and a fine of 375,000 euros if convicted of breach of trust, forgery and entering false data into computers.

Lawyers have argued over whether his colleagues and bosses could have overlooked his excesses while sitting within metres of him at the "Delta One" trading desk and sharing a common computer system.

On Friday they wrangled over insinuations by Kerviel's lawyer, Olivier Metzner, that current employees of Societe Generale could not give reliable testimony for fear of losing their jobs.

At the opening of the trial on Tuesday, Kerviel presented himself as an ordinary, hard-working man, now a computer consultant earning 2,300 euros per month -- a big mark-down from the tens of thousands he earned as a trader.

More traders were scheduled to testify later in the trial. Trial hearings are set to wrap up on June 25 and the court is expected to deliberate for several weeks before handing down a verdict.

© 2010 AFP

0 Comments To This Article