French rogue trader Jerome Kerviel blames Societe Generale bank at appeal launch
French rogue trader Jérôme Kerviel appeared in court at the launch of his appeal on Monday, arguing that he was a scapegoat and that Société Générale should be held responsible responsibility for gambles in which he lost the bank billions of euros.
"I am not responsible for this loss," he said at the start of his appeal hearing against a 2010 conviction with a three-year jail sentence and court order to repay the 4.9 billion euros he cost his former employer.
He told the judge he had always acted with the knowledge of his hierarchy.
Kerviel was for many a symbol of the excesses of the global financial system, which he has described as a "big banking orgy", and he even became a cult hero in France, for his actions which exposed the world of high finance.
The 35-year-old, who is from a small village in Brittany, did not profit personally from his unauthorised 50 billion euros of uncovered bets on futures markets, which almost ruined the bank.
He has not served any jail time since his October 2010 conviction for breach of trust, forgery and entering false data into computers during the covert stock market deals.
Kerviel, who faces up to five years in prison if the court upholds the conviction, has consistently argued that his superiors knew what he was doing and turned a blind eye as long as he was making them a profit.
His lawyers have promised they will prove at the appeal hearing that Société Générale knew that Kerviel was going far beyond his mandate with risky bets and that the bank could therefore not claim to be an innocent victim.
French regulators fined the bank four million euros for failures in its internal risk management systems following the Kerviel scandal.
Kerviel, who told the court he was currently unemployed and had no source of income, has admitted regularly exceeding trading limits and logging false transactions to cover his gambles, but says this was common practice.
Societe Générale management has argued it knew nothing of Kerviel’s high risk activities. The former head of the bank, Daniel Bouton, is to appear at the appeal hearing on June 21.
Two months ago, Kerviel changed his lawyer, hiring David Koubbi, who has launched two countersuits against the bank.
One accuses the bank of manipulating secret recordings to make it appear that the trader's superiors were unaware of his activities.
The other suit covers the issue of repayment – Kerviel’s lawyer says while he was ordered to repay the money he lost, the firm has already been repaid a third of the sum in the form of a tax write-off.
Société Générale, which said in 2010 that it would spare Kerviel reimbursement of the full amount, has now hit back with two suits for malicious falsehood.
In the wake of the Kerviel case, banks now declare that internal safeguards have been reinforced to prevent a repeat, but there have been new trading scandals
In 2011 a London-based trader was charged with fraud after losing Swiss bank UBS 2.25 billion dollars, while US bank JPMorgan is recovering from more than 2 billion dollars in derivatives trading losses.
Those losses were blamed on another French trader, Bruno Michel Iksil, nicknamed the "London Whale" and "Voldemort", after Harry Potter's evil nemesis.