Former Société Générale trader who lost €4.9bn appears in Paris court
JÉRÔME KERVIEL, the former Société Générale trader who is accused of causing a €4.9 billion loss at the bank, has said he hid nothing from his employers and took his prompts from their “daily encouragement”.
More than two years after France’s second largest bank stunned the financial world by announcing the record trading loss, Mr Kerviel’s trial began yesterday amid intense interest in Paris.
“We hope that there will be transparency, that the truth will not be obstructed by Société Générale, like it has been for two years,” the former banker’s lawyer, Olivier Metzner, said as he arrived at the courthouse.
Although Mr Kerviel (33) has admitted to building up the risky trading positions leading up to the loss in early 2008, he has said breaches in the banks risk control system were tolerated.
Société Générale is adamant that he acted alone and says investigating magistrates have already dismissed his claims of tacit complicity from his employers. The bank said before the trial that it held Mr Kerviel entirely responsible and called for an “exemplary punishment”. It has also asked to recoup the full €4.9 billion loss in damages.
Inside the court, Mr Kerviel, who faces five years in jail and a €375,000 fine if found guilty of charges of breach of trust, computer abuse and forgery, declared his current profession as “consultant” and his current monthly salary as €2,300.
Mr Kerviel said he “hid nothing” from his colleagues at the bank and that all his actions were visible to his employer. The “daily encouragement of [his] superiors” prompted him to continue, he added.
Facing each other in the courtroom are two of Pariss best-known lawyers – Metzner and Jean Veil. Mr Metzner’s clients include Panamas former dictator Manuel Noriega, one-time Vivendi chief executive Jean-Marie Messier and former French prime minister Dominique de Villepin.
The Paris-based bank disclosed the unauthorised bets on January 24th, 2008, with then chief executive Daniel Bouton calling Mr Kerviel a “terrorist”. The bank filed a criminal complaint the same day and will participate in the trial as a civil party, a status that enables it to seek damages under French law.
In France, criminal claims precede civil claims, so if Mr Kerviel is cleared, the bank won’t be able to seek restitution. “This situation was caused by a man, Mr Kerviel, who betrayed the trust of the bank and its employees, notably his work colleagues, to whom he lied and abused with forged documents,” Société Générale said in a 26-page statement to the court.
The amount awarded to “SocGen” ultimately is less important than a clear statement by Judge Dominique Pauthe holding Mr Kerviel responsible for the loss, said Mr Veil, the bank’s lawyer.
More than half a dozen books have been written about Mr Kerviel, including a memoir he published last month and a comic book that reflected the popular portrayal of the former trader as a young outsider from a small Breton town who stood aloof from the Paris elite.
The trial is expected to last three weeks.