Trader to appeal against conviction

A FORMER Société Générale trader has been sentenced to five years in prison and ordered to repay the €4.9bn he lost the bank in unauthorised deals.

The Paris tribunal correctionnel today found Jérôme Kerviel guilty of abuse of trust, forgery and illegally modifying bank computer databases.

The court ruled that Kerviel "deliberately acted beyond his mandate" by taking positions that exposed the bank to excessive risk and forging documents to cover up his work.

The judge said Société Générale was not aware of Kerviel's fraudulent activity.

He agreed with prosecutors' calls for a five-year prison sentence, of which two years are suspended.

The trader has also been ordered to pay €4.9bn in damages and interest to the bank, which registered as a civil claimant in the case.

Kerviel's lawyer, Olivier Metzner, said he would appeal against the conviction. He said the trader "had not made a cent" from the transactions.

Kerviel handed himself into police in January 2008 after the French banking giant revealed the losses.

Kerviel's former managers said in court that the trader had forged documents to bypass the bank's internal controls and made the deals without their knowledge or approval.

They said his was an isolated case.

The trader's lawyer had argued that managers knew about the trader's dealings, but failed to exert proper control and kept quiet as long as he was making good returns.

France's banking regulator fined Société Générale €4m in 2008 and issued a formal warning to the bank for "grave deficiencies" in its internal controls that "made possible the development of the fraud and its serious financial consequences".

In a book published earlier this year, Kerviel admits having lost any sense of reality, swept away by the madness of the trading floor.

The judge today criticised Kerviel for the "communications campaign" he staged around the book launch, and said he had tried to twist public opinion and present himself as the victim in the case.

Kerviel currently works as an IT consultant in Paris, earning about €2,300 a month.

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