French rogue trader Jerome Kerviel jailed for three years and ordered to PAY BACK £4.1bn
He racked up some of the biggest losses in banking history.
And yesterday rogue trader Jerome Kerviel was made to pay for his actions – literally.
The 35-year-old Frenchman, whose fraud at Societe Generale almost broke the bank, was sentenced to three years in jail.
He was also ordered to repay the £4.3billion the bank lost – a sum that would take him more than 16,000 years to earn on his current £2,000-a-month salary.
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Jerome Kerviel is escorted by a gendarme at the Palais de Justice in Paris. In court he was given a five-year prison sentence for causing the financial collapse which cost his bank £4.1billion
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Kerviel accompanied by his lawyer Olivier Metzner. The junior trader has always portrayed himself as a scapegoat for a corrupt and out-of-control banking system rightly exposed for its greed
The scandal emerged in early 2008, but the stockbroker’s fraud had begun years earlier.
He started creating fictitious stock market trades in late 2006, stepping up their number like a ‘mutating virus’, according to his former chief executive Daniel Bouton.
Officials say Kerviel would ‘close’ his trades in three days, before timed computer controls triggered warnings within the bank’s system.
In January 2008, his fraud was revealed and it emerged that at one point Kerviel was making unauthorised trades totalling as much as £43.5billion – more than SocGen’s entire worth.
The bank lost £4.3billion unwinding his complex positions – the largest-ever alleged fraud by a single trader.
Yesterday, a Paris court sentenced him to three years in prison, with two more years suspended.
Outside, defence lawyer Olivier Metzner called the financial penalty ‘unbelievable’.
‘I have the feeling Jerome Kerviel is paying for an entire system,’ he added.
During his trial, Kerviel admitted ‘going a bit too far’ with his high-risk trading but insisted he was a scapegoat for bigger problems at the bank.
However, Societe Generale’s lawyer Jean Veil said the bank had no idea Kerviel was running up such big losses, and the trader was solely to blame.
He said: ‘The losses he generated were the financial equivalent of the sudden disappearance of five nuclear power stations.
‘It is clear he will never be able to repay that amount, but we are asking for it so that it is totally clear how much money he lost.’
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Financial collapse: Kerviel caused Societe Generale £4.1billion in losses
At the time the losses occurred, the European stock market suffered heavy losses of about 6 per cent and began to fall more sharply in the following days.
Within a few days there was an emergency cut in the federal funds rate by the U.S. Federal Reserve as Societe Generale tried to close positions built up by Kerviel.
This led to speculation that stock market turbulence caused the Federal Reserve Board to cut the rate.
And although the Reserve later denied it knew of the bank’s situation when it made its decision, SocGen’s investment banking chief admitted three days of ****** selling played a role in the market’s overall decline.
Kerviel, who likened ******** millions on the stock market to ‘playing a video game’, has said: ‘The huge numbers I was trading with stopped meaning anything.’
The Frenchman was convicted of breach of trust, computer ***** and falsifying documents, but was allowed to walk free after sentencing while he launches his appeal.
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Ex-SocGen CEO Daniel Bouton called Kerviel a 'financial terrorist'
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