[Nothing is going to stop the Bank of St. Germain from opening! T]
October 5, 2010
The BBC’s Christian Fraser expects the bosses at Societe Generale will be pleased with the outcome.
Former Societe Generale trader Jerome Kerviel is facing three years in jail after being convicted by a Paris court.
Kerviel was told he must also repay the damages of 4.9bn euros ($7bn; £4bn) which the bank said it lost through his risky trades.
He was found guilty of forgery, unauthorised computer use and breach of trust.
Kerviel’s lawyer said they would appeal the conviction. The former trader will remain free until the appeal is heard.
The total sentence given was five years in prison, with two years suspended.
The trial earlier this year was over charges that he bet 50bn euros of SocGen’s money without the bank’s knowledge.
“Kerviel knowingly went beyond his remit as a trader,” presiding judge Dominique Pauthe told the court.
Kerviel’s defence was the bank knew about the risk-taking and was content while he was making profit, with lawyer Olivier Metzner saying his client was “disgusted” about the ruling.
The court had judged that the bank “was responsible for nothing, not responsible for the creature that it had created”, he added.
The trial saw Kerviel’s former bosses and colleagues line up to testify against him.
SocGen’s lawyer, Jean Veil, accused Kerviel of “duplicity” for reassuring his bosses that nothing was wrong while racking up the huge losses.
And the bank’s president and chief executive at the time of the losses, Daniel Bouton, called the trading scandal a “catastrophe”.
But Kerviel’s lawyers argued that the failure was more than incompetence, and that there was a culture of rule breaking at SocGen where management deliberately turned a blind eye in the hunt for profit.
The bank was fined 4m euros by French regulators for failures in those systems following the scandal.
The Kerviel affair has dealt a blow to reputation of one of France’s most prestigious financial institutions, said BBC business reporter Mark Gregory, but added that in some respects the fall-out had been less than might be expected.
Our correspondent says this was due to the timing.
Jerome Kerviel’s dealings are now often seen as footnote to the much larger global financial panic that followed the collapse of the US investment bank Lehman Brothers a few months later, he says.
The few billion dollars lost by SocGen pale besides the hundreds of billions of dollars thrown away through risky dealings in America’s sub-prime mortgage market, our correspondent adds.
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