13 October 2008

PARIS -- French rogue trader Jerome Kerviel, accused of gambling away billions of euros at Societe Generale, is a "very minor player" compared to the mega-losses run up by banks in the global financial crisis, his lawyers said Monday.

"Kerviel is one of many and the crisis today shows that he was in fact a very minor player," said lawyer Eric Dupond-Moretti.

"If I were cynical, I would even say that five billion euros compared to what we have seen in the past week is really very little."

Kerviel appeared for a hearing at the financial crimes unit of a Paris court as part of an ongoing investigation into EUR 4.9 billion in losses from unauthorised deals allegedly made by the junior trader.

The hearing took place as the French government was set to join other European countries and offer hundreds of billions of euros to the financial sector to shore up banks that have been crippled in the financial crisis.

"What we are saying is that it is obvious there was a system in place and that underlings like Kerviel should not be the only ones to pay for the consequences of this financial crisis," said Bernard Benaiem, another lawyer for Kerviel.

One of France's big three banks, Societe Generale shocked the financial world when it announced the staggering losses at the hands of a rogue trader in January, incurred when it was forced to unwind more than EUR 50 billion of unauthorised deals.

Kerviel, 31, has been charged with breach of trust, fabricating documents and illegally accessing computers in the worst rogue trading scandal in history.

Benaiem reiterated that Societe Generale management was aware of Kerviel's dealings, saying there had been email exchanges, letters and discussions that showed that his superiors knew.

Societe Generale's claim that its oversight mechanism was faulty is a "smokescreen and we intend to dissipate this smoke so that each party's precise responsibilities emerge," said Benaiem.

Kerviel turned himself in to police on 26 January, two days after the bank revealed the losses.

[AFP / Expatica]