French prosecutors oppose rogue trader Kerviel's release

14th March 2008, Comments 0 comments

French prosecutors will ask a Paris court to keep rogue trader Jerome Kerviel behind bars during investigation.

   PARIS, March 14, 2008 (AFP) - French prosecutors will ask a Paris court to
keep rogue trader Jerome Kerviel behind bars during an investigation into the
multi-billion-euro scandal at Societe Generale, a spokeswoman said Thursday.
   Kerviel, a 31-year-old junior trader, is to appear in court on Friday for a
remand hearing as investigators seek to establish whether he had any
accomplices in the biggest bank trading scam in history.
   "We must ensure that all useful evidence that could lead to the truth is
preserved and prevent any fraudulent contacts," said Ulrika Weiss from the
prosecutor's office.
   Societe Generale has blamed trades made by Kerviel for the mammoth losses
of 4.9 billion euros (7.1 billion dollars) incurred after the bank was forced
to unwind more than 50 billion euros in unauthorized deals.
   A 29-year-old Societe Generale employee described as a friend of Kerviel
was detained for questioning early Wednesday and released later that evening
without charge, a judicial source said.
   The man who worked on Societe Generale's trading floor was asked about his
contacts with Kerviel, the only person who has been charged in the case.
   Police from the specialist financial brigade picked up the employee early
Wednesday at Societe Generale's offices near Paris and searched his desk as
well as his home.
   Investigators examining Kerviel's phone records found numerous calls made
by him to the employee, a source close to the investigation said.
   Kerviel turned himself into police on January 26, two days after the bank
revealed the losses, and he was charged on January 28 with breach of trust,
fabricating documents and illegally accessing computers.
   He has been held at La Sante prison in Paris since February 8.
   Lawyers for Kerviel argue that their client has been cooperating with
police and that investigators have not come up with evidence pointing to
possible accomplices.
   A broker who worked for Societe Generale subsidiary Fimat and who knew
Kerviel was questioned twice and named as an assisted witness in the case, but
no charges have been laid against him.
   While Kerviel has maintained he acted alone, he has suggested that his
bosses at Societe Generale knew that he was dealing with huge sums of money
but turned a blind eye as long as he was making a profit.
   In an exclusive interview with AFP last month, Kerviel said he refused to
be made a scapegoat by Societe Generale management and that he got a "bit
carried away" in his aim of making money for the bank.
   "I was designated (as solely responsible) by Societe Generale. I accept my
share of responsibility but I will not be made a scapegoat for Societe
Generale," he said during the interview at his lawyer's Paris offices.
   An internal bank inquiry found that Kerviel's allegedly unauthorised
trading had not been detected because of his sophisticated techniques, but it
also pointed the finger at internal audit and risk control failures.
   Shares in Societe Generale fell more than 3.0 percent in opening deals
Thursday on the Paris stock exchange after a group of US investors launched a
class action law suit against the French bank.
   US law firm Cohen Milstein Hausfeld and Toll filed the suit in a federal
court in New York on Wednesday alleging that Societe Generale misled investors
about its exposure to risky US mortgage securities and failed to thwart the
rogue trade deals.


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