Frenchman Kerviel in huge rogue trade trial

8th June 2010, Comments 0 comments

Former trader Jerome Kerviel goes on trial Tuesday accused of unathorised deals that cost French bank Societe Generale five billion euros in one of the biggest financial fraud scandals in history.

The three-week trial pits the 33-year-old Frenchman alone against the huge bank that employed him, to decide whether he is solely responsible in a case seen as a symbol of the banking excesses blamed for the financial crisis.

Kerviel is accused of gambling away 4.9 billion euros (six billion dollars) in risky stock market trades and of hiding these actions from his employers at Societe Generale, one of France's three biggest banks.

Branded a crook by his ex-employer and by others a mere scapegoat for those higher up, he faces criminal charges along with civil suits by the bank and other plaintiffs including employees and shareholders.

He risks 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 entering false data into company computers.

Societe Generale revealed in January 2008 that it had been forced to unwind 50 billion euros of unauthorised deals it says Kerviel made.

He denies being solely responsible and says he will plead to be acquitted at the trial, which kicks off on Tuesday at 1:30 pm (1130 GMT).

"Are the banking excesses due to Jerome Kerviel? Or are they due to a banking system?" said Kerviel's lawyer Olivier Metzner in comments published Monday by the newspaper Metro.

Kerviel has said he made mistakes but maintains his bosses knew what he was doing and that he was just part of a "big banking orgy," as he described it in a memoir published last month.

He wrote that traders habitually hid the size of their bets and bosses turned a blind eye to possible breaches of trading limits as long as earnings were high, while congratulating the top earners as "good hookers."

Kerviel told AFP last month that the trial was a chance "to show the public that I was not an isolated case and there were abuses throughout the banking and trading world."

He said that among the 33 defence witnesses at his trial, some would shed light on the workings of the trading floor to prove that he had not acted without his bosses' knowledge.

"My aim is to show that at no point did Jerome Kerviel abuse the confidence of the bank," said Metzner, vowing to present evidence recovered from trading computers to prove that Societe Generale was aware of Kerviel's actions.

The bank's lawyer Jean Veil on the other hand has accused Kerviel of "duplicity" for reassuring his employers that all was well.

"These hearings are going to open in a particularly tense atmosphere," Metzner said.

© 2010 AFP

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