Societe Generale trader Kerviel jailed for three years
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Societe Generale trader Kerviel jailed for three years

Paris : France | Oct 05, 2010 at 3:37 AM PDT
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SocGen : L'avocat de Kerviel

Former Societe Generale trader Jerome Kerviel will serve three years in jail with a further two years suspended after being convicted by a Paris court.

Kerviel was told he must repay the damages of almost 5bn euros ($7bn; £4bn) 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 he would appeal the conviction.

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.

'Catastrophe'

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.

'Timing'

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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The headquarters of French banking giant Societe Generale in La Defense, outside Paris
The headquarters of French banking giant Societe Generale in La Defense, outside Paris
Aun Muhammad is based in Lahore, Punjab, Pakistan, and is an Anchor on Allvoices.
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