Societe Generale rogue trader Kerviel loses appeal

Jerome Kerviel Kerviel has always maintained the bank knew of his trading positions

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Former Societe Generale trader Jerome Kerviel has lost his appeal in Paris against a three-year prison sentence, with an additional two years suspended, for forgery and breach of trust.

The ex-trader lost the bank almost 5bn euros ($6.5bn; £4bn) in 2008, and was convicted in 2010.

Kerviel, who was also convicted of unauthorised computer use, has always said his bosses knew what he was doing.

He will also have to pay back the losses incurred by the bank.

However, Societe Generale has said it will not demand full repayment.

"The appeals court... upholds the ruling," the judge told Kerviel, adding that he would not go to jail immediately.

"Jerome Kerviel was the sole creator, inventor and user of a fraudulent system that caused these damages to Societe Generale," the court's written ruling said.

'Lamentable injustice'


Jerome Kerviel is a cult figure here in France.

Many have painted him as an anti-establishment hero who managed to make a mockery of the global banking system just as the financial crisis was starting to unfold in 2008.

After he was arrested, Facebook fan sites were set up and some women even got T-shirts printed saying 'I am Jerome Kerviel's girlfriend'.

But for others he has always been viewed as a reckless trader who refused to take responsibility for his actions. He has written a book about his experiences and has made occasional television appearances defending his line.

But any money he has made from his story will barely make a dent in the 5bn euro debt he has been asked to pay back to Societe General. As one journalist here put it: "To raise the total, on his current salary after tax would take 333 thousand years".

The bank has said it will be "realistic" about what it actually asks for. But it is Jerome Kerviel's prison sentence that will perhaps send the strongest message to other banks and traders around the world.

The trader's lawyer said his client might consider a second appeal against the original sentence.

"We defended Jerome Kerviel vigorously and I confirm that despite all the evidence put forward by the defence, it was not enough to dissuade [the court] against the original verdict," said David Koubbi.

"Our aim was to defend Mr Kerviel against a lamentable injustice. I admit we have failed.

"We will continue to support Mr Kerviel in his fight and we will now decide with him if we can take this further with the court of cassation."

Societe Generale's lawyer said the bank would take into account Kerviel's income and assets when deciding how much it wanted its ex-employee to pay back.

Jean Veil said it would be "indecent" if Kerviel kept money made from his actions at the bank, for example from any book or film rights.

Despite his claims that his superiors knew all about his actions, Kerviel's former bosses and colleagues lined up to testify against him during the trial in 2010. The judge at the time ruled that the trader "knowingly went beyond his remit".

Kerviel has been banned from trading for life, while Societe Generale was also fined 4m euros by French regulators for failures in its risk control systems following the scandal.

Another high-profile case of rogue trading is that of Kweku Adoboli, a former trader with Swiss bank UBS.

He is on trial for false accounting and fraud, which the prosecution maintains led to £1.4bn of losses at the bank. Mr Adoboli claims his managers supported his risk-taking.

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