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Jailed Trader Ordered To Pay Back Billions
1:34pm Tuesday October 05, 2010
Hazel Baker
A rogue trader who almost brought down French bank Societe Generale has been jailed and ordered to pay back 4.9bn euros (£4.25bn).
Grave faced: Jerome Kerviel arrives at the central Paris court to hear his fate
Jerome Kerviel was found guilty of breach of trust, forgery and entering false computer data in the massive fraud scandal. The 33-year-old showed no emotion as a Paris court sentenced him to five years in jail, with two years suspended. His lawyer said he would appeal the decision.
Societe Generale claimed the former index futures trader covered up bets of nearly 50bn euros - more than the bank's total market value - between late 2007 and early 2008. It said his trading, which he balanced with fictitious transactions, cost it nearly 5bn euros - a sum Kerviel has now been told to return to the bank.
Bringing down the bank: Societe Generale said it was brought close to collapse
Throughout his trial in June, Kerviel argued that the bank tolerated his massive risk-taking as long as it made money. However, Societe Generale lawyer Jean Veil said the bank had no idea Kerviel was running up such massive losses, and the trader was solely to blame. He had told the court: "The losses he generated were the financial equivalent of the sudden disappearance of five nuclear power stations.
"We are asking the court to order that he repay the entire sum." French media estimated it would take him 120,000 years to repay the money on his current salary. The former trader's lawyer Olivier Metzner said his client had not benefitted financially from the fraud and was "paying for an entire system". "I hope you all will donate a euro to Jerome Kerviel," he told TV cameras and reporters.
Employed by Societe Generale since 2000, Kerviel worked his way up from a supporting role in an office that monitored trades to a job on the futures desk. There, he invested the bank's money by hedging on European equity market indices. He was arrested in January 2008 and held for six weeks in Paris' notorious La Sante prison. Since being fired from Societe Generale, Kerviel has worked as a computer consultant.
