French rogue trader appeals

PARIS: Rogue trader Jerome Kerviel argued at the start of his appeal hearing that his ex-employer Societe Generale bank knew he was making the risky gambles that eventually cost it 5 billion euros.

“I am not responsible for this loss and the acts I am accused of. I always acted with the knowledge of my hierarchy,” he told the judge when asked why he was appealing his 2010 conviction.

The 35-year-old Frenchman was originally sentenced to five years in jail with two years suspended for breach of trust, forgery and entering false data into computers during the 2008 covert stock market deals.

The original verdict also required him to pay back the staggering 4.9 billion euros which his market gambles cost Societe Generale and which nearly ruined the bank.

Critics of that ruling said it made him a scapegoat for a banking system based on pure greed.

Kerviel, who wore a dark-blue suit and white shirt for his Paris court appearance yesterday, had consistently argued that his superiors knew what he was doing and turned a blind eye as long as he was making them a profit.

Rejecting charges that he acted alone, he had insisted the firm knew all about his US$50bil in trading positions, and even encouraged him to take risks.

Kerviel, who told the court he was currently unemployed and had no source of income, had admitted regularly exceeding trading limits and logging false transactions to cover his gambles, but said this was common practice.

Societe Generale management had argued it knew nothing of what

Jerome Kerviel says he acted with bosses’ knowledge

Kerviel was up to.

Two months ago, Kerviel changed his lawyer, hiring David Koubbi, who has launched two countersuits against Societe Generale.

One accused the bank of manipulating secret recordings to make it appear that the trader’s superiors were unaware of his activities.

The other said that while Kerviel was ordered to repay the 4.9 billion euros he lost, the firm has already been repaid a third of that sum in the form of a tax write-off.

Societe Generale, which said in 2010 that it would spare Kerviel paying the full compensation, has hit back with two suits for malicious falsehood.

Since the Kerviel case exploded, banks have insisted that internal safeguards have been reinforced to prevent a repeat.

Societe Generale was fined four million euros at the time by the French banking commission for failing in its internal checks.

If his appeal fails, Kerviel faces up to five years in prison and a fine of 375,000 euros.

The appeal is set to last until June 28. — AFP