Accessibility links

Societe Generale Rogue Trader Faces First Charges


Prosecutors filed preliminary charges Monday against a French trader accused of causing multi-billion dollars losses to France's second largest bank in allegedly illicit speculation. From Paris, Lisa Bryant has more on one the world's biggest trading scandal to date.

According to his lawyer, 31-year-old rogue trader Jerome Kerviel was charged Monday with breach of trust and unauthorized computer activity for illicit trades in financial derivatives that have cost French bank Societe Generale a reported $7 billion in losses. But so far, investigating judges have not charged Kerviel on two other counts demanded by the prosecutor in the case: attempted fraud and forgery.

Kerviel was released Monday after spending much of the weekend in detention while he was being quizzed about his alleged activities. At a midday press conference, prosecutor Jean-Claude Marin said Kerviel claimed he had not acted for his personal enrichment.

Marin said Kerviel had admitted to having taken a certain number of acts to hide speculation on the market. He said the trader said he began his activities at the end of 2005.

Prosecutor Marin also said exchange officials had warned Societe Generale, France's second largest bank, of the trader deals late last year, raising questions about the bank's claims that it only found out about Kerviel's activities 10 days ago.

The latest developments add more mystery to the banking scandal, and place additional pressure on Societe Generale's top executives. An offer to resign by the bank's chairman, Daniel Bouton, has been rejected for the moment. But French President Nicolas Sarkozy said Monday that its top managers would have to accept responsibility for the scandal.

Colleagues of Kerviel describe the trader as an unassuming man, and his lawyers claim the trader is being made a scapegoat by the bank.

XS
SM
MD
LG