Rogue trader Kerviel 'crushed' by five-billion-euro fine

6th October 2010, Comments 0 comments

Rogue trader Jerome Kerviel and most French newspapers agreed Wednesday that the 33-year-old, who faces a five billion euro damages claim, has been made a scapegoat for a banking system based on greed.

"I have the feeling they wanted me to pay the price for everyone else and that it was necessary to save (Societe) Generale bank and that they killed Private Kerviel," he told Europe 1 radio.

"I am crushed by the weight of the sentence," he said in his first public reaction to his conviction Tuesday for breach of trust, forgery and entering false data into computers at Societe Generale, one of Europe's biggest banks.

Kerviel was sentenced to five years in jail with two years suspended and ordered to pay back the 4.9 billion euros his market gambles cost in 2008, just months before the subprime crisis would bring down Lehman Brothers bank.

The judge said 140,000 jobs at Societe Generale had been endangered by the actions of Kerviel, who has lodged an appeal against his conviction and will remain at liberty until that appeal is heard.

His lawyer had called for him to be cleared of all charges except the false computer logs, blaming the bank for the scandal that almost destroyed it and claiming the trader's bosses turned a blind eye as long as the money was rolling in.

That view was echoed by many French newspapers Wednesday, who were shocked by the colossal fine that Kerviel would take 17,000 years to pay with his current monthly salary of 2,300 euros as an IT consultant.

"The Only Guilty One?" asked the front-page headline of the left-leaning Liberation daily, which said in an editorial that the young ex-trader was paying for "all the sins of the bank."

La Tribune business daily said that by delivering such a "fanciful" verdict, the judges exposed themselves to accusations that the legal system "protects the powerful and savages the weak."

Les Echos, another business paper, noted that "by convicting Kerviel... the judges spectacularly enthrone Kerviel in his favourite role, that of victim."

Britain's Financial Times said that "such disastrous behaviour (by Kerviel) can only happen in a corporate culture that allows traders to cover their tracks even after they have bet the bank."

There was astonishment too within President Nicolas Sarkozy's ruling UMP party.

Gerard Longuet, the leader of UMP senators, said the fine was "slightly ridiculous" and that he was surprised that "one single man should carry the entire and exclusive responsibility."

A source close to the case said that Societe Generale was not counting on recovering the lost money, and on Wednesday government spokesman Luc Chatel said the bank should "perhaps" consider not insisting on the payment.

Societe Generale's lawyer Jean Veil has called the sentence a "moral compensation" for its employees and shareholders.

On discovering the risky deals in January 2008, Societe Generale was forced to make emergency transactions worth 50 billion euros -- equal to nearly all its shareholder capital at the time -- to balance its books.

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.

© 2010 AFP

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