A court yesterday sentenced French rogue trader Jerome Kerviel to three years in jail plus two years suspended for a massive fraud scandal that cost Societe Generale bank almost 5 billion euros (US$6.85 billion).
The main Paris criminal court also ordered Kerviel to pay his former employer damages of 4.9 billion euros — the amount it said it lost through his risky covert stock trades.
The court found Kerviel guilty of breach of trust, forgery and entering false data into computers in the affair, in which his bosses at Societe Generale, one of Europe’s biggest banks, said that he carried out huge and risky stock trades without their knowledge.
Kerviel’s lawyer had called for the 33-year-old to be acquitted, blaming the bank for the 2008 rogue trading scandal that almost destroyed it and claiming that the trader’s bosses knew what he was up to.
However, presiding judge Dominique Pauthe told the court that defense evidence heard in his trial in June “does not allow us to deduce that Societe Generale was aware of Jerome Kerviel’s fraudulent activities.”
Kerviel “exceeded his mandate by taking speculative positions without the knowledge of the bank, on a gigantic scale,” Pauthe said.
Kerviel dodged a crowd of reporters when he arrived at the court shortly before 10am, slipping into the courtroom through a side-door accompanied by police and his lawyer.
He sat in court, dressed in a dark suit and white shirt, as Pauthe read the judgement.
Kerviel admitted regularly exceeding trading limits and logging false transactions to cover his gambles, but said this was common practice among traders and that his bosses turned a blind eye as long as earnings were high.
At the last trial hearing in June, his lawyer Olivier Metzner asked how a “normal boy” like Kerviel could “end up here,” facing years in jail on charges of breach of trust, forgery and entering false data into computers.
“How do you create [people like Kerviel] if not for financial gain?” he said, referring to the bank.
Kerviel’s former employers and the state prosecutors bringing criminal charges branded him a liar who knowingly misled his bosses and put Societe Generale and its employees in peril.
The trial heard from more than 30 witnesses but shed little light on what motivated Kerviel, who said simply that he tried to do his job in the interests of the bank.
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