French trader Kerviel says bosses turned blind eye to reckless trading

Former trader Jérôme Kerviel testified Tuesday that he was "encouraged" by his bosses to take risks, on the first day of his trial over the multi-billion-euro scandal at French bank Société Générale.

Reuters

Kerviel is accused of gambling away 4.9 billion euros and of hiding these actions from his employers.

Kerviel is denying that he is to blame for reckless trading, insisting his bosses knew the risks he took and backed him.

"The daily encouragement from my superiors did not stop me. Rather they encouraged me to continue," responded Kerviel to questioning from presiding judge Dominique Pauthe.

Kerviel identified himself as "single, computer consultant" earning 2,300 euros per month.

At the close of the first day of the hearing, Pauthe described the trader as being “balanced” with “average to above-average” intelligence.

Kerviel later spoke of stressful long working days.

"Every day I would arrive at 7am. Lunch would be a sandwich at my desk," he said.

Société Générale revealed in January 2008 that it had been forced to unwind 50 billion euros of unauthorised deals it says Kerviel made.

In a memoir published last month, Kerviel wrote that traders habitually hid the size of their bets and bosses turned a blind eye to possible breaches of trading limits as long as earnings were high.

His lawyer Olivier Metzner showed the court a projection of the seating plan in Kerviel's open-plan office to illustrate the point and said that bosses could also view his trades via the computer system at any time.

About 40 witnesses will be called to the stand over the coming weeks including Eric Cordelle, who was Kerviel's immediate superior at the time. He is due to testify on June 21.

Kerviel spent 38 days in custody after his arrest in 2008 and has since started a job at a small IT company in a suburb of Paris.

Trial hearings are set to end on 25 June and the court is expected to take several weeks to deliberate before delivering a verdict.