French court to pass verdict on rogue trader Kerviel
A French court is on Tuesday to pass verdict on rogue trader Jerome Kerviel who faces up to four years in prison for covert stock trades that Societe Generale bank says cost it almost five billion euros.
Kerviel's lawyer has called for the 33-year-old to be acquitted, blaming the bank for the 2008 rogue trading scandal that almost destroyed it, while prosecutors have demanded four years' jail plus one year suspended.
Kerviel has admitted regularly exceeding trading limits and logging false transactions to cover his gambles, but said this was common practice among traders and that his bosses turned a blind eye as long as earnings were high.
His lawyer Olivier Metzner said that alongside its "careful" and "transparent" dealings the bank had a "dark side, where it creates extraordinary (financial) products, derivatives... exotic products".
At the last trial hearing in June, Metzner asked how a "normal boy" like Kerviel could "end up here", facing years in jail on charges of breach of trust, forgery and entering false data into computers.
"How do you create (people like Kerviel) if not for financial gain?" he said, referring to the bank.
Kerviel's former employers and the state prosecutors bringing criminal charges have branded him a liar who knowingly misled his bosses and put Societe Generale and its employees in peril.
Kerviel's defence has always been that his bosses knew of and approved his risky deals, which he says were visible to his colleagues and bosses on the trading desk.
On discovering the risky deals in January 2008, Societe Generale was forced to unwind positions worth 50 billion euros (69 billion dollars) -- 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 lawyers said it wants 4.9 billion euros in compensation from Kerviel. He could also face a fine of 375,000 euros.
The trial heard from more than 30 witnesses but shed little light on what motivated Kerviel, who said simply that he "tried to do his job in the interests of the bank."
"Why did he do these things? Hoping for a bonus? To become a star?" state prosecutor Philippe Bourion asked in June.
"That's the only mystery the prosecution will not be able to solve."
© 2010 AFP