French rogue trader denounces 'banking orgy' in tell-all book

4th May 2010, Comments 0 comments

One month before he goes on trial, former French trader Jerome Kerviel is making his case in a tell-all book that likens trading to prostitution and hits out at the "big banking orgy."

Now an employee at a computer firm outside Paris, Kerviel depicts himself as a scapegoat of an out-of-control banking world in "L'Engrenage: Memoires d'un trader" (The Spiral: Memoirs of a Trader) that hits bookshops on Wednesday.

The 33-year-old ex-trader at Societe Generale bank describes the money-crazed atmosphere of trading rooms where managers congratulate top earners at the end of the day by comparing them to prostitutes.

"Bravo, you have been a good hooker today," is what bank managers would tell Kerviel on most nights, the ex-trader wrote in the book, excerpts of which have been released in the French press.

"In this big banking orgy, traders have the right to the same consideration afforded to any low-level prostitute: a quick recognition that the day's earnings were good."

Kerviel goes on trial on June 8, accused of gambling away billions of euros of SocGen's money in risky dealings that ended up costing the French bank 4.9 billion euros (6.5 billion dollars) in losses.

The former trader faces a maximum sentence of five years in prison and a fine of 375,000 euros if convicted on charges of breach of trust, falsifying and using fake documents and tampering with computer information.

One of France's three biggest banks, Societe Generale shocked the financial world when it revealed in January 2008 that it had been forced to unwind more than 50 billion euros of unauthorised deals Kerviel is said to have made.

The former trader has long maintained that his bank managers knew of his dealings and turned a blind eye as long as he was making a profit.

"I am just a man who made mistakes as an employee of a bank that for a long time allowed such errors, because they yielded a profit," he wrote.

In a series of interviews to promote his book, Kerviel has pointed to the global financial crisis as vindication, arguing that it shows how banks encourage traders to take reckless risks.

"I am struck by the fact that nothing has been done during the past two years of the financial crisis so that the causes of the crisis are addressed and a situation like mine does not happen again," he told Le Journal du Dimanche weekly.

"Banks work in a virtual world. There are financial products that are so complex that only one or two people understand how they work. Who controls these people?" he asked.

Since the Kerviel affair, attention has turned to another French trader, 31-year-old Fabrice Tourre from Goldman Sachs, dubbed "Fabulous Fab", who has been charged with fraud by the US Securities and Exchange Commission.

Tourre is accused of concocting some of the "Frankenstein products" that led to the 2008-2009 financial meltdown.

Following his arrest, Kerviel was released from jail pending trial and has sought to build a life far removed from the high-rollers of finance and the media.

He found a job in a computer firm, earns 2,300 euros a month, lives in a small flat and claims he never goes on holidays.

"I thought I was invulnerable," Kerviel wrote of his time at the SocGen trading desk. "The truth about how I made my earnings was an open secret."

Kerviel's trial winds up on June 23 and a verdict is expected soon after.


© 2010 AFP

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