Jerome Kerviel was sentenced to five years in prison over a series of risky trades which nearly bankrupted Societe Generale in 2008 © AFP/File / Kenzo Tribouillard
Versailles, France, Sep 23 – French “rogue trader” Jerome Kerviel will learn Friday whether he must pay Societe Generale 4.9 billion euros ($5.5 billion), the sum he lost the bank in a series of disastrous trades.
The appeals court in Versailles, outside Paris, could order 39-year-old Kerviel to cover the entire sum, part of it, or not a single euro.
But if it rules that Kerviel does not have to pay anything, it will be a humiliating defeat for Societe Generale.
Even worse for the bank, the court could also order it to repay 2.2 billion euros in compensation it received from the French state over the case.
If the ruling goes the other way, it will be largely symbolic, as Kerviel could never afford to cover even a fraction of the liability.
Speaking to French radio on Friday, Kerviel said: “There’s not even the slightest finding or a shred of evidence proving that they lost 4.9 billion euros. My superiors and the bank knew what I was doing, so I owe them nothing.”
He said he had promised his mother that he would “restore honour to the family name that was stolen… more than eight years ago”.
List of notorious rogue traders © Graphics/AFP
Kerviel was convicted of breach of trust, forgery and entering false data for the trades which nearly bankrupted Societe Generale in 2008.
He was sentenced to five years in prison, two of which were suspended, but has always maintained that his bosses had turned a blind eye as long as the profits kept rolling in.
In total he actually spent only 150 days in prison.
In a civil case, Kerviel was first ordered to pay for the entirety of the enormous losses but that was quashed on appeal, with judges ruling that the bank’s internal oversight mechanisms had failed.
The verdict set for Friday at 1130 GMT follows hearings at the Versailles appeal court in June in which lawyers for Societe Generale made a fresh attempt to claw back the cash.
– Scapegoat or villain? –
The bank said it had “always recognised the weaknesses and faults in its system of checks”, but that Kerviel was responsible for the trades.
In June, Kerviel finally had something to celebrate when a Paris labour tribunal ordered Societe Generale to pay him 450,000 euros in damages, saying he had been fired “without genuine or serious cause”. The bank has appealed.
Kerviel, the son of a village blacksmith from the far west of rural Brittany, divides opinion in France.
Jerome Kerviel’s unauthorised trades cost Societe Generale 4.9 billion euros ($5.5 billion) © AFP/File / Loic Venance
Many believe he is a scapegoat while others think he should pay the price for his actions.
He has never denied taking risks — at one point staking 50 billion euros of the bank’s money — but maintains that his bosses were just as much at fault as he was.
Although he was paid a relatively modest salary, Kerviel is alleged to have made Societe Generale 1.9 billion euros before the financial crisis accelerated his losses.
Since his release from prison, Kerviel has reinvented himself as a computer security consultant and a trenchant critic of “casino capitalism”, even meeting Pope Francis after making a pilgrimage to Rome to protest against the “tyranny of the markets”.
