Ex-banker claims superiors knew of risky bets

A MONTH before he is due to stand trial for his role in the biggest trading loss in French banking history, former Société Générale employee Jérôme Kerviel has claimed his superiors knew of his risky bets but turned a blind eye as long as they kept winning.

Société Générale shocked the banking world in January 2008 when it announced that it had lost €4.9 billion because Mr Kerviel, a junior market trader, placed €50 billion of allegedly unauthorised bets on futures markets.

At his trial, which is due to begin in Paris on June 8th, Mr Kerviel (33) faces charges of abuse of trust, faking documents and hacking into the bank’s computer system to enter false information.

He faces five years in prison and a €375,000 fine if found guilty.

After declining to speak publicly about the case for the past two years, the former banker has done a round of interviews in France to promote his new book, The Spiral: Memoirs of a Trader, which is due out on Wednesday.

Setting out the likely form of his defence, Mr Kerviel – who now earns €27,000 a year as a computer programmer – said his superiors were aware of what he was doing but did not stop him as long as he kept making money for the bank.

Société Générale has always denied this.

Mr Kerviel accepted that he ignored official limits on his trades but insisted he merely bought into a prevailing culture. “I am not a symptom of the financial crisis . . . I am merely a man who made mistakes within a bank where for a long time they were allowed – because they made a profit,” he said.

He appealed for others in the financial industry to speak out on his behalf, saying he often met people who privately agreed with his take on the scandal but refused to support him publicly “because they are afraid of reprisals or losing their job”.

“The financial milieu is very closed. They can’t say openly that Societe Générale’s account of things doesn’t hold up,” he said.

To explain his trades, Mr Kerviel writes of an institution intoxicated by the quest for maximum profit.

“Around the liberties that my colleagues and I took with exposure limits (was) . . . an unspoken law of ‘nothing seen, nothing said’,” he writes.