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Birthday : 01/11/1977
Place of birth : Pont-l'Abbé (29) - France
Biography : In 2008, the name of Jerome Kerviel became very popular. The world discovered the Société...

French rogue trader Kerviel launches appeal

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06/04/2012 | 01:32pm CET

Ex-trader Jerome Kerviel began his appeal on Monday against a three-year prison sentence for his role in France's biggest rogue trading scandal, arguing he was not responsible for a 4.9 billion euro ($6.1 billion) loss at banking group Societe Generale (>> SOCIETE GENERALE).

Ex-trader Jerome Kerviel began his appeal on Monday against a three-year prison sentence for his role in France's biggest rogue trading scandal, arguing he was not responsible for a 4.9 billion euro ($6.1 billion) loss at banking group Societe Generale (>> SOCIETE GENERALE).

Wearing an open-necked white shirt for his court appearance and showing little emotion, Kerviel hit back at SocGen over the 2010 conviction that held him responsible for massive, risky bets uncovered in 2008.

The 35-year-old trader claims his superiors knew what he was doing. SocGen, for its part, denies any part in the trades.

"I am not responsible for this loss ... I always behaved according to rules set by my superiors," Kerviel said in court in Paris.

At stake for SocGen is whether magistrates will once again exonerate the bank of any responsibility for Kerviel's massive trading positions, which dealt a big blow to its reputation and forced it to raise capital.

Kerviel portrayed SocGen as having imposed little oversight on its traders, saying he was never told what his official remit was and that his desk regularly flouted its 125 million euro limit.

"My mandate was to make money for the bank," he told the court.

SocGen's representative in court, however, said his roles in market-making and arbitrage were clearly defined and that individual traders were responsible for staying within their limits.

Armed with new counsel David Koubbi - known for defending high-profile celebrity clients such as actress Isabelle Adjani - Kerviel has already gone on the offensive ahead of his month-long appeal, filing two lawsuits accusing SocGen of obtaining a verdict under false pretences and of tampering with evidence.

RISKY TRADING

The fresh allegations, which SocGen has denied and has responded to with countersuits for defamation, seek to shift the focus back on to the bank by accusing it of concealing information - such as its tax write-off on Kerviel-related losses - and of responsibility for alleged "blanks" on tapes used as evidence.

Kerviel was not questioned on these allegations during the appeal's opening session.

The reappearance of Kerviel is the latest reminder of the potential costs to banks of risky trading activity, coming after JPMorgan (>> JPMorgan Chase & Co.) recently announced a $2 billion trading loss. Such events have encouraged regulators on both sides of the Atlantic to cast a sharp eye on bank practices.

The other shadow looming over the sector is political. With France's new Socialist government threatening to separate banks' risky activities from their retail operations, French banks have been insisting they do not do overly risky proprietary trading.

At stake for SocGen in particular is whether magistrates will once again exonerate the bank from any responsibility for Kerviel's massive trading positions, which dealt a blow to its reputation and forced it to raise capital.

The Kerviel appeal may end up strengthening the view that regardless of whether trades are for clients or for the banks themselves, there needs to be tougher regulation and more protection for consumers, analyst Christophe Nijdam at equity research firm Alphavalue said.

"This case offers more grist for the new president's mill," he said. "If it's not possible to protect a bank from this kind of trading fraud, it becomes even more urgent to separate this activity from retail banking."

(Editing by David Holmes)

By Lionel Laurent

Stocks treated in this article : JPMorgan Chase & Co., SOCIETE GENERALE
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Latest news about Jérôme Kerviel 
11/03 JÉRÔME KERVIEL : French tax body to decide on Socgen Kerviel affair 'within days'
09/23DJJÉRÔME KERVIEL : Court Orders Rogue Trader Kerviel to Pay SocGen EUR1 Million in Damages
2014DJJÉRÔME KERVIEL : French Court Grants Parole to Former Soc Gen Trader Kerviel- Lawyer
2014 JÉRÔME KERVIEL : Convicted rogue trader Kerviel arrested in southern France
2014 JÉRÔME KERVIEL : Ex-trader Kerviel appeals to French president from Italian border
2013 JÉRÔME KERVIEL : French rogue trader Kerviel accuses SocGen of fraud
2013 JÉRÔME KERVIEL : Ex-trader Kerviel rebuffed by Paris employment tribunal
2012 JÉRÔME KERVIEL : Friend of UBS "rogue trader" saw Kerviel parallels
2012 JÉRÔME KERVIEL : Kerviel faces judge in final rogue-trading verdict
2012 JÉRÔME KERVIEL : Prison looks likely for France's rogue trader Kerviel
2012 JÉRÔME KERVIEL : French rogue trader Kerviel launches appeal
1  2  3  4  5  6  7  8  9  10Next

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