Kerviel: ordinary man convicted of huge bank fraud - Capital Business
Connect with us

Hi, what are you looking for?


Kerviel: ordinary man convicted of huge bank fraud

PARIS, Oct 5 – French trader Jerome Kerviel, jailed for three years Tuesday for juggling billions of euros in rogue deals and humiliating a huge bank, casts himself as a simple soul caught up in an orgy of greed.

The 33-year-old was convicted Tuesday of forgery and breach of trust for gambling away nearly five billion euros (more than seven billion dollars) in risky deals as a star trader at Societe Generale, one of Europe\’s biggest banks.

Branded a crook by his ex-employer and a mere scapegoat by others, Kerviel insisted his bosses knew what he was doing and turned a blind eye to possible breaches of rules as long as he kept the profits rolling in.

In a memoir published before his trial, he said he was dragged into a "big banking orgy."

Even as he racked up billions for the bank in its skyscraper in Paris\’s La Defense business district, Kerviel lived modestly in a small suburban flat and took the train to Brittany in the holidays to visit his widowed mother.

"I am an ordinary person. I am not crazy," he said during investigations into the scandal after Societe Generale was forced to carry out emergency transactions worth 50 billion euros to balance its books after his risky deals.

"I didn\’t earn millions (in salary) and I didn\’t drive a Porsche," said Kerviel, who was paid 50,000 euros a year plus tens of thousands more in bonuses when the scandal erupted in January 2008.

"Have you seen my apartment? Forty-five square metres (485 square feet), no masters\’ paintings. Ikea furniture," the sign of a simple lifestyle, he added.

Some commentators have interpreted his big risk-taking as motivated by the desire to prove himself, a young man from a modest background, among the ranks of high-flying traders from elite schools.

Advertisement. Scroll to continue reading.

Societe Generale says he worked out how to circumvent complex risk-control mechanisms and its lawyer Jean Veil accused him of "duplicity" in reassuring his employers that all was well.

The presiding judge at his trial, Dominique Pauthe, appeared baffled as he tried to comprehend what drove Kerviel, but the trader shed little light on his motivations during hours of testimony.

"There is no Kerviel mystery," the trader said, insisting he just tried to do his job "in the interests of the bank".

His lawyer Olivier Metzner said the bank was to blame since Kerviel was "a being that it created."

Kerviel had sought acquittal on the charges of breach of trust, falsifying and using fake documents and entering false data into company computers, for which he was sentenced to three years in jail plus two years suspended and was ordered to pay 4.9 billion dollars\’ damages to his former employer.

The fine is far beyond his means. He told the court that he has been earning 2,300 euros a month as a computer consultant.

Kerviel was born in the small town of Pont l\’Abbe, Brittany, to a father who taught metalwork and a mother who was a hairdresser.

He once ran for municipal office as a candidate from President Nicolas Sarkozy\’s UMP party but was not elected. He told the newspaper Liberation that as a child he wanted to be a vet.

Instead, Kerviel trained in economics and finance at universities in nearby Quimper and in Nantes and Lyon, where his teachers said he graduated with solid but not exceptional grades.

Advertisement. Scroll to continue reading.

He joined Societe General in 2000 where he was promoted to the "front office" five years later to trade futures on European share indices — effectively betting on the direction of the stock market.

Colleagues at the time described him as a quiet loner. Journalists have likened the fresh-faced ex-trader to the film star Tom Cruise.

In an interview with Liberation, he said he liked the music of R and B singer Alicia Keys and was a big film fan, admitting that he cried at the end of the 3D fantasy "Avatar."

Kerviel spent 38 days in custody after his arrest in 2008 and later took up a job at a small IT company in a suburb of Paris. He appeared for interviews smoking heavily and at his trial in June with bags under his eyes.

He said ahead of his trial that he hoped it would teach people the lessons of the global financial crisis.

"Respect for work, solidarity, honesty — I grew up with these notions," he told Liberation. "But when I became a trader, I lost part of these morals."


More on Capital Business