French rogue trader blames bank

25th June 2010, Comments 0 comments

Jerome Kerviel's lawyer on Friday urged judges to acquit the Frenchman of fraud, blaming the bank Societe Generale for the rogue trading scandal that almost destroyed it.

The final plea came on the last day of the trial, a day after prosecutors demanded that Kerviel be jailed for four years plus one year suspended, for covert stock trades that the bank says cost it 4.9 billion euros (7.1 billion dollars at the time) in 2008.

Alongside its "careful" and "transparent" dealings, Kerviel's lawyer Olivier Metzner alleged, the bank had its "dark side, where it creates extraordinary (financial) products, derivatives, this and that, exotic products."

Kerviel has admitted regularly exceeding trading limits and logging false transactions to cover his gambles, but says this was common practice among traders and that his bosses turned a blind eye as long as earnings were high.

The bank "is ready to do anything, even to cover up rotten assets," Metzner said.

He 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.

State prosecutor Jean-Michel Aldebert on Thursday branded him a "professional fraud."

Metzner on Friday reiterated his claims that Kerviel's bosses knew of and approved his risky deals, which he says were visible to his colleagues and bosses on the trading desk.

"I am asking you to show good sense," Metzner told the judges. While sitting close together, he asked, "during these three weeks, has one of you failed to see what the other was doing?"

Kerviel sat solemnly before the judges in a black suit and shirt before they ended the trial and announced that they would give a verdict on October 5.

On discovering the risky deals in January 2008, Societe Generale was forced to unwind positions worth 50 billion euros -- 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 has lasted almost three weeks and heard from more than 30 witnesses but has 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?" the other state prosecutor Philippe Bourion asked on Thursday.

"That's the only mystery the prosecution will not be able to solve."

© 2010 AFP

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