Top French bank goes after rogue trader for billions lost

GMT 14:30 2016 Wednesday ,20 January

Arab Today, arab today Top French bank goes after rogue trader for billions lost

French rogue trader Jerome Kerviel was jailed after a series of unauthorised trades cost Societe
Versailles - AFP

French banking giant Societe Generale launched a court bid on Wednesday to recover 4.9 billion euros ($5.5 billion) gambled away by rogue trader Jerome Kerviel through unauthorised trades in 2008.

The French appeals court in Versailles, near Paris, said it would decide on January 29 whether to delay the proceedings pending the outcome of a separate bid by Kerviel, 39, for a retrial of the criminal fraud case that saw him sentenced to three years in jail.

At issue is the degree of responsibility that France's third largest bank bore in the affair, which could have bankrupted Societe Generale had Kerviel's trades not been discovered and unwound in time.

His lawyer David Koubbi asked for a delay until after the Paris court's ruling, set for March 21. 

The retrial bid was bolstered by a bombshell revelation on Sunday that a former deputy prosecutor in the case had said it was "obvious" that Societe Generale was aware of Kerviel's shady dealings. 

A top detective in the case secretly recorded the Paris deputy prosecutor, Chantal de Leiris, saying in a June 2015 conversation: "When the subject comes up, anyone even a little bit involved in finance laughs, knowing very well that Societe Generale knew... it's obvious, obvious."

Branded a crook by his ex-employer and a scapegoat by his defenders, Kerviel says his bosses turned a blind eye to his malfeasance as long as the profits kept rolling in.

Societe Generale on Monday rejected what it called "pseudo-revelations" and a "new media manipulation" in the case.

The bank's lawyer Jean Veil dismissed as "nonsense" the idea that the bank knew of the rogue trading.

It is "implausible that those directly above Jerome Kerviel or the people who worked with him every day knew but didn't say anything," Veil told AFP. 

He said Kerviel's colleagues would have no interest in covering up his risky manoeuvres for fear of jeopardising their bonuses, which depended on the performance of the team.

Kerviel's conviction in 2010 of breach of trust, forgery and entering false data was upheld on appeal.

He was also ordered to repay to Societe Generale the 4.9 billion euros he lost -- although an appeals court overturned the order, arguing that the bank's internal oversight mechanisms had failed.

Kerviel left prison in September 2014 after spending less than five months behind bars.

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