Frenchman Kerviel in massive rogue trade trial
Former trader Jerome Kerviel goes on trial Tuesday accused of fraud that cost French bank Societe Generale five billion euros -- but insists that his bosses knew what he was up to.
The 33-year-old is accused of gambling away 4.9 billion euros (six billion dollars) in risky deals at Societe Generale, one of France's three largest banks, in what was then considered the biggest trading scandal in history.
Societe Generale revealed in January 2008 that it had been forced to unwind 50 billion euros of unauthorised deals it says Kerviel made. He faces criminal charges along with a civil suit by the bank in the trial that runs to June 25.
Branded a crook by his ex-employer, a symbol of banking excesses by some and by others a mere scapegoat for those higher up, Kerviel says he has seen the light and wants to use his trial to teach the lessons of the financial crisis.
He 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 entering false data into company computers.
Kerviel denies being solely responsible and says he will plead not guilty. He 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 admitted he had "pushed some small companies towards the bottom" by betting against them in speculative trades.
"We are all doing it," he said. "We were conditioned for that, we were paid for that and if you didn't do it, you got shouted at."
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.
Kerviel's lawyer Olivier Metzner said one "cannot abuse the confidence of someone who has authorised you to do what you have done.
"We are going to show that all Jerome Kerviel's operations were visible" to his bosses, Metzner said.
Societe Generale's lawyer Jean Veil on the other hand accuses Kerviel of "duplicity" in reassuring his employers that all was well.
"It makes no sense to make fake emails and then to claim now, as he is doing, that several people were aware of it," Veil said.
"It will be a tight thing because the stakes are huge," Kerviel said. "But I think it will also be a way to air in public the debate on the morals, the regulation, the functioning of all that," he added.
"People think we're just finding out that (US investment bank) Goldman Sachs speculated on the American mortgage markets," blamed at least in part for causing the financial meltdown, he added.
"Since 2007 in the trading room, everybody knew that."
© 2010 AFP