Legal News

Ex-French trader must pay $6.7 billion for fraud

By (Breaking Legal News)

Ex-trader Jerome Kerviel was convicted on all counts Tuesday in history's biggest rogue trading scandal, sentenced to three years in jail and ordered to pay his former employer a mind-numbing euro4.9 billion ($6.7 billion) in damages.

The ruling marked a huge victory for Societe Generale SA, one of France's most blue-blooded banks, which has worked to clean up its image and put in place tougher risk controls since the scandal broke in 2008.

The 33-year-old former futures index trader stood expressionless as the court convicted him and pronounced a five-year sentence with two years suspended. Kerviel was found guilty on charges of forgery, breach of trust and unauthorized computer use for covering up bets worth nearly euro50 billion between late 2007 and early 2008.

In the most stunning blow, the court ordered Kerviel to pay the bank back the euro4.9 billion that it lost unwinding his complex positions in January 2008 -- a punishment he would almost certainly be unable to pay. He was also banned for life from working in the financial industry.

Full post as published by Breaking Legal News on October 05, 2010 (boomark / email).