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Bank Was Warned About Rogue Trader

Prosecutor says Kerviel was after a big bonus with mammoth trades

By Rob Quinn,  Newser Staff

Posted Jan 29, 2008 3:19 AM CST
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(Newser) – The Eurex stock exchange alerted Société Générale to positions held by Jérôme Kerviel months before the bank discovered his staggering $7 billion fraud, the Independent reports. Kerviel produced fake documents to justify his actions to the bank and was motivated by a drive to impress his bosses with lucrative trades and earn a large bonus, according to the lead prosecutor in the case.

The prosecutor implied that the bank had turned a blind eye to unauthorized trades. Kerviel is now free on bail, although prosecutors, fearing he could turn suicidal when the reality of his situation finally sinks in, had recommended that he be kept in protective custody. Kerviel's lawyers say the refusal of Paris judges to grant all the prosecution's demands indicates they share doubts that Kerviel was a lone villain.

Christian Charriere-Bournazel, left, with at his side Elisabeth Meyer, right, the lawyers of Jerome Kerviel, addresses reporters in front of the financial branch of the Paris Court house in Paris Monday Jan. 28, 2008. Jerome Kerviel, is appearing there before a judge who will weigh whether to press preliminary charges...
Christian Charriere-Bournazel, left, with at his side Elisabeth Meyer, right, the lawyers of Jerome Kerviel, addresses reporters in front of the financial branch of the Paris Court house in Paris Monday...   (Associated Press)
View of the Financial Police headquarters, Sunday, Jan. 27, 2008 in Paris. The head of the financial section of the Paris prosecutor's office, Jean-Michel Aldebert, said Sunday the questioning of Jerome Kerviel, a trader implicated in a massive bank fraud case was proving extremely fruitful. (AP Photo/Thibault Camus)
View of the Financial Police headquarters, Sunday, Jan. 27, 2008 in Paris. The head of the financial section of the Paris prosecutor's office, Jean-Michel Aldebert, said Sunday the questioning of Jerome...   (Associated Press)
Photographers take pictures of the occupants of a police car, part of the convoy carrying Jerome Kerviel, who was appearing before a judge who will weigh whether to press preliminary charges, in Paris, Monday Jan. 28, 2008. A Paris prosecutor asked for preliminary charges of forgery, breach of trust and...
Photographers take pictures of the occupants of a police car, part of the convoy carrying Jerome Kerviel, who was appearing before a judge who will weigh whether to press preliminary charges, in Paris,...   (Associated Press)
This internal security file photo photo taken from French bank Societe Generale's Web site shows a man identified on the site as Jerome Kerviel. Societe Generale said Thursday Jan. 24, 2007 it has uncovered a 4.9 billion euro ($7.14 billion) fraud _ one of history's biggest _ by...
This internal security file photo photo taken from French bank Societe Generale's Web site shows a man identified on the site as Jerome Kerviel. Societe Generale said Thursday Jan. 24, 2007 it has uncovered...   (Associated Press)
French lawyer Elisabeth Meyer, defense lawyer of French trader Jerome Kerviel, addresses reporters outside the Paris financial court, Monday, Jan. 28, 2008. Investigating judges filed preliminary charges Monday against a trader accused of causing billions of euros (dollars) of losses for France's second-largest bank, and he was released from custody...
French lawyer Elisabeth Meyer, defense lawyer of French trader Jerome Kerviel, addresses reporters outside the Paris financial court, Monday, Jan. 28, 2008. Investigating judges filed preliminary charges...   (Associated Press)
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French PM says bank should share the blame
Bloomberg

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Telegraph (UK)

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fraud • France • banking • bank fraud • Jérôme Kerviel • Société Générale

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