Former Societe Generale trader heads for trial

08:29, June 09, 2010      

Email | Print | Subscribe | Comments | Forum 

Trial was to begin Tuesday for a former trader accused of brining losses of 5 billion euros (5.95 billion U.S. dollars) to the French bank Societe Generale SA (SG).

About 50 witnesses were expected to be called in the three-week trial of Jerome Kerviel, who is charged with forgery, breach of trust and unauthorized computer use. Kerviel faces five years in prison as well as a fine of 375,000 euros (448,000 dollars), if convicted.

In addition, his former employer Societe Generale would demand a sum of 4.9 billion euros (5.83 billion dollars) in compensation for damages, SG lawyer Jean Veil told the Sunday paper Le Journal du Dimanche.

The lawyer admitted, however, that it was neither possible nor realistic to expect that Kerviel, who was paid about 100,000 euros (119,000 dollars) a year, could repay the money.

Several bank executives resigned in the aftermath of the scandal, including longtime Chairman Daniel Bouton. Kerviel's superiors and his assistant trader were questioned in the criminal investigation, but none faces charges.

The Kerviel affair was considered the largest fraud case in banking history before the world plunged into the scandal-full 2008 financial crisis.

MR. AVERAGE OR MR. ROGUE?

On Jan. 24, 2008, Societe General, one of French top three banks, unexpectedly announced a loss of 7.2 billion euros (8.57 billion dollars)in an unauthorized trading operation.

Kerviel, a then 31-year-old low-level trader, emerged as the single responsible person for "the biggest fraud" by one trader after British trader Nick Leeson put Barings into bankruptcy in 1995.

As a man who endangered the biggest European bank and made the whole financial market panic before hit by the sweeping global financial disaster, Kerviel does not carry a high profile that a Golden Boy usually has, nor has a long list of glorious history like Bernard Madoff.

Kerviel, described by French media as Mr. Average, was neither a Grand Ecole graduate nor a brilliant student or employee that his professors, bosses, colleagues would ever have trouble to forget.

The son of a teacher father and a hairdresser mother, the accused rogue trader was born and grew up in Pont-l'Abbe, a small town with 8,000 inhabitants on Brittany's fog-enveloped coast.

He completed his undergraduate studies in Nantes and then attended the University of Lyon for graduate school.

Trained for the middle and back-office functions of processing and monitoring trades, Kerviel got his professional start with a paid internship at Banque Nationale de Paris.

He joined SG in 2000 by working in the Middle Office, which monitors the traders' transactions, a job described as "secretary." He entered the trading floor as an assistant trader only two years later and became a trader in 2004.

At the moment SG unwound his opening trading position, however, Kerviel was reportedly operating an unauthorized position of 50 billions euros (59.5 billion dollars), roughly 25 percent more than the banks' market value.

Kerviel turned himself in to police on Jan. 26, two days after the bank revealed the loss. He has admitted that he gambled on his position by putting bigger and bigger bets with fictitious transactions, from 10 million, gradually, to 49 billion euros (58.3 billion dollars).

Later SG reports show Kerviel bypassed its control system to start building up unauthorized trading positions in 2005 and 2006 for "small amounts."


【1】 【2】

(Editor:黄蓓蓓)

  • Do you have anything to say?

双语词典
dictionary

  
Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • Giant red lantern lights up in Tiananmen Square to celebrate the coming National Day on Oct. 1. (Xinhua/Li Xin)
  • A ceremony is held in Taipei, southeast China's Taiwan, on Sept. 28, 2011, to commemorate the 2,562nd birthday of Confucius (551-479 BC), a Chinese thinker, educationist and philosopher. (Xinhua/Wu Ching-teng)
  • The world's first Boeing 787 Dreamliner for delivery arrives at Haneda airport in Tokyo, capital of Japan, on Sept. 28, 2011. The Boeing 787 Dreamliner, whose buyer is All Nippon Airways (ANA), will implement a flight of ANA on Oct. 26 from Tokyo's Narita Airport to Hong Kong in south China. (Xinhua/Ji Chunpeng)
  • A Libyan National Transitional Council (NTC) fighter shows what is believed to be human jawbone found inside a mass grave near Abu Salim prison in Tripoli, Libya, Spet. 27, 2011. The NTC on Sunday said they had found a mass grave containing the bodies of 1,270 people killed by Gaddafi's security forces in a 1996 massacre at Abu Salim prison in southern Tripoli. (Xinhua/Li Muzi)
  • Rescue workers and local residents search for survivors after a building collapsed in old Delhi, India, Sept. 27, 2011. At least 10 people were killed and 35 injured when an old three-storey building collapsed. More than a dozen people are still feared trapped under the debris, police said. (Xinhua/Partha Sarkar)
  • A visitor has flying experience in the windmill castle of Jinshitan National Holiday resort in Dalian, northeast China's Liaoning Province, Sept. 27, 2011. The castle is a 23-meter-high building with 21 meters in diameter. The castle uses wind tunnel to make objects floating in the air. It is the first indoor stadium in China, which enables people to have flying experience. (Xinhua/Zhang Chunlei)
Hot Forum Discussion