Monday, 11 February 2008

Jerome Kerviel guilty or not guilty

Jerome Kerviel, the 31-year-old French trader who caused a 4.9 billion euro loss for Societe Generale, was taken into custody on Friday following a request to have the trader placed in detention. According to the state prosecutor’s office, Kerviel should be held in custody “to avoid any consultation with possible accomplices or conspirators.”A second broker, who has not been named, was questioned on Thursday and faced judges on Saturday. He was later released but has been made an assisted witness to the case. The broker worked for Fimat, a subsidiary of Societe Generale, and is alleged to have known about Kerviel’s trades. “What is known at the moment,” said Jean Viel, a lawyer for Societe Generale, “is that the two traders were friends, in communication.” Police found dozens of instant messaging conversations between the two traders on Kerviel’s computer. Earlier in the week, Kerviel gave his first interview since the Societe Generale losses were made public on 24th January. Speaking to AFP at his lawyer’s office in Paris, Kerviel admitted to getting “a bit carried away” and falsifying e-mails, but refused to be considered solely responsible. “I accept my share of responsibility,” he said, “but I will not be made a scapegoat for Societe Generale.”France’s finance minister Christine Lagarde delivered an 11-page report to the French government on Monday, urging banks to invest more in “efficient internal control systems” to reinforce the security of market operations and reduce the risk of fraud. Lagarde also suggested that fines should be increased for the breach of state banking commission regulations. Societe Generale declared in a statement that new measures have been, or soon will be, implemented to “detect and prevent” the “controls that were successfully evaded by this fraud”.



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